Revamp of Royal Mail to cause 'chaos at Christmas'

Managers at Royal Mail are warning that the postal service could descend into chaos over Christmas, as the state-owned company gets to grips with its radical overhaul.

Managers at Royal Mail are warning that the postal service could descend into chaos over Christmas, as the state-owned company gets to grips with its radical overhaul.

A series of changes have been introduced at Royal Mail over the past year as management, led by chairman Allan Leighton and chief executive Adam Crozier, strive to turn the ailing service around.

The most controversial change has been the removal of second deliveries in favour of just one a day. Other measures include cutting back on overtime, reducing night-time postal sorting and axing casual staff.

But insiders are concerned that the changes could lead to upheaval during the hectic festive season. Traditionally, the Royal Mail has relied on strong demand for overtime to help fill the breach during Christmas.

But one insider said: "The staff are just not interested in overtime because they are working harder. Now is already starting to be a busy time for us and we're struggling. Everyone is worried it's going to be chaos for Christmas.

"I don't think the public realise just how much disruption there could be at Christmas."

A poor service over the festive period would be a massive blow to Royal Mail, which has already been heavily criticised for the disruption caused by the switch to single deliveries.

But Royal Mail's troubles could extend well beyond Christmas. Industry regulator, Postcomm is considering plans to introduce full competition in the postal market much sooner than originally planned.

Under the current timetable rubber-stamped by ministers, the state-owned mail company would be shielded from full competition from private firms in its main letters business until April 2007.

Over the last few years the postal market has been partially opened up. But the regulator is becoming increasingly frustrated at the slow pace of new competition and is now considering bringing forward the timetable.

In Poscomm's annual report, published last week, chief executive Martin Stanley says: "We are examining the possibility that we might open the whole market much earlier than our original date of April 2007." He argues that this may be necessary because so far only a handful of companies are trying to compete with Royal Mail in the business post market.

Mr Stanley argues that the lack of competition is keeping a lid on service improvements and he attacks Royal Mail for some "abysmal failures" in service over the past year.

The move is not likely to go down well at Royal Mail. Privately the company has complained that Britain is freeing up the postal market faster than any other European country, and going way beyond what is required under EU law.

However, a Royal Mail spokesman said: "We welcome competition. If competition were to accelerate, the important thing is how it is introduced. And the fact that Postcomm is looking at bringing forward the date for full competition underlines how essential the changes to Royal Mail's network are to make it more efficient."

He added that the company was also currently planning how to best run the Christmas schedule but remained confident that it would be a success. "Christmas is something that happens every year and we will be planning for it in the normal way."

However, another senior insider conceded that, with the prospect of increased competition as early as next year, Royal Mail had no choice but to provide a strong festive service.

The source said it was "absolutely critical", adding: "We need to be sure it's going to be the best Christmas we've ever had."