Notes to The Times article on Royal Mail

Notes to the statistics box in the centre of this article from The Times: http://twitpic.com/dzy5z2
also here: http://image-store.slidesharecdn.com/7dd9feb0-b8ba-11e3-ba72-22000a98b2af-large.jpeg

Article title: "Royal Mail facing backlash over 'lost £1bn' from sell-off"

Statistics box:
+---------------------------------------------------------+
| Cash and carry                                          |
+---------------------------------------------------------+
| Comparable UK parcels                                   |
| Service *   Weight   Royal Mail      Rival      Saving  |
|                        price         price              |
| 2-3 day       2kg      £9.10      Hermes  £3.78   59%   |
| Next day      5kg     £16.95    CityLink £10.79   36%   |
| Next day     20kg     £34.50    CityLink £10.79   69%   |
+---------------------------------------------------------+

============================================================

Prices from Royal Mail's Price Finder
http://www.royalmail.com/price-finder

Small parcels: 45cm x 35cm x 8cm
           or: 35cm x 25cm x 16cm
           or: roll/cylinder up to 45cm long x 8cm diameter
and weight up to 2kg max
RM 1st cl small pcls        £5.45  next day
RM 1st cl small pcls sig    £6.55  next day
RM 2nd cl small pcls        £3.80  3-days
RM 2nd cl small pcls sig    £4.90  3-days

Medium parcels: 61cm x 46cm x 46cm
and weight up to 20kg max
RM 1st cl mdm pcls          £8.90  next day
RM 1st cl mdm pcls sig     £10.00  next day
RM 2nd cl mdm pcls          £8.00  3-days
RM 2nd cl mdm pcls sig      £9.10  3-days

Large parcels: 150cm max dim, combined length + width + depth <= 300cm
and weight up to 30kg max
No Royal Mail services available.

Large parcels: 250cm max dim, combined length + width + depth <= 500cm
and weight up to 30kg max
Parcelforce express48       £9.99

RM Special Delivery ignored - small parcel costs start at £11.00.

Delivery within 2-3 days
Parcel value less than £20 chosen ("don't know" does the same)

----------------------------------------

Hermes (http://www.myhermes.co.uk) has these restrictions:
"Parcel is less than 15kg, less than 120cm in length and a maximum combined length and circumference of 225cm."

With weight of 1-2kg you get the £3.78 deal offered.  But you have to add £1.00 for Hermes to get a signature.  So the true Hermes price is £4.78.  Push the weight to the maximum, 10-15kg and you're quoted a price of £9.78.

----------------------------------------

So on a parcel weighing over 10kg, Royal Mail medium parcels beats Hermes by 68p.  Parcelforce betters Hermes for size/volume and maximum weight allowed for 20p more.

The comparable RM service to Hermes for a 2kg parcel is the "RM 2nd cl small pcls sig" service at £4.90, for which Hermes - with signature - beats them by only 12p and not the '59% saving', £5.32 difference as claimed in The Times.

============================================================
Text of full article:
---------------------

Royal Mail facing backlash
over 'lost £1bn' from sell-off

+---------------------------------------------------------+
| Cash and carry                                          |
+---------------------------------------------------------+
| Comparable UK parcels                                   |
| Service *   Weight   Royal Mail      Rival      Saving  |
|                        price         price              |
| 2-3 day       2kg      £9.10      Hermes  £3.78   59%   |
| Next day      5kg     £16.95    CityLink £10.79   36%   |
| Next day     20kg     £34.50    CityLink £10.79   69%   |
+---------------------------------------------------------+

----------
Robert Lea Industrial Editor

Ministers, investment bankers and
senior civil servants are bracing them-
selves for recriminations this week
when the Government's auditors give
their verdict on the flotation of Royal
Mail, which appears to have lost tax-
payers in excess of £1 billion.
  In what is likely to be a trying week
for the privatised postal network, Royal
Mail has pushed through stamp price
and parcel charge rises today that its
competitors say will show that the
former monopoly is trying to profit
from its market dominance.
  The National Audit Office will pub-
lish this week its findings on last
autumn's £3.3 billion sell-off by the
Government. If the NAO follows the
example of the House of Commons
Select Committee on Business, which
conducted its own inquiry into the priv-
atisation, the verdict will be damning.
  Vince Cable, the Business Secretary,
and Michael Fallon, the minister in
charge of postal affairs, have been
charged with selling Royal Mail too
cheaply - raising £2 billion from the


sale of shares in a transaction that
gifted postal workers 10 per cent of the
company and in which the Treasury
retains 30 per cent.
  The have been criticised for relying
on Lazards and Goldman Sachs, their
advisers, especially as subsequent evi-
dence found that 21 banks in the City on
average valued the business at between
£3.9 billion and £4.8 billion, with one
institution saying it would be worth as
much as £8.6 billion.
  At Friday's close, Royal Mail was
worth £5.65 billion on the stock market,
giving the free float of shares a value of
£3.4 billion. That means the City and
other investors have made a £1.4 billion,


or 70 per cent, profit. Private investors
who subscribed for £750-worth of
shares, and who kept them, are sitting
on a £525 profit.
  At a hearing before MPs, Mark
Russell, the civil servant in charge of
the sell-off as chief executive of the
Government's Shareholder Executive,
said that he was satisfied with the
advice he had been given. Adrian
Bailey, the Business Committee chair-
man retorted: "You are demonstrating
a degree of gullibility which I would
have thought is incompatible with the
role you perform."
  Royal Mail price rises that came
into effect today have also attracted


criticism. MyParcelDelivery, a price
comparison website, said that many
small businesses could be hundreds of
pounds a year out of pocket if they did
not shop around.
  Hermes and its Parcel2Go division
said that it would drop its prices at the
lower end of the market and predicted
that others would follow, "The 1kg
parcel has been Royal Mail's bread and
butter, but the [Royal Mail] price in-
crease highlights that these days may
be at an end," James Greenbury, a
director, said.
  The price of first-class stamp goes
up by 3 per cent to 62p, while the
second-class rate is raised by 6 per cent
to 53p.
  "Consumers and businesses can
expect price increases above inflation
as long as Royal Mail has market power
in letters and small packages," Dimitris
Hiotis, a pricing specialist at Simon-
Kucher & Partners, a consulting firm,
said. "The larger price increase on
second-class stamps indicates consum-
ers and businessess have switched to
second-class and Royal Mail wants to
limit this switching down."