THE FUTURE OF THE UK POSTAL SECTOR

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THE FUTURE OF THE UK POSTAL SECTOR

• A CWU Perspective
• 9th February 2006

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Introduction

• This presentation will cover
• Overview of the CWUs Position
• The Challenges for the Union
• The Competitive Environment
• Our Vision for a Successful Royal Mail
• Our Political Agenda

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Overview of the CWUs Position

• Everybody in the Union must acknowledge a new
  environment
• The Union can only benefit from understanding the
  position of key industry players
• Royal Mail cannot face up to the challenge of
  competition without us
• The CWU is in a powerful position. We can embrace
  and influence change in a way that is acceptable
  to our members
• We continue our political campaigns to oppose
  privatisation, Postcomms approach and ensure a
  level playing field

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Key Challenges for the Union 1

• Dealing with Royal Mail Letters Strategy is our
  biggest challenge yet
• Part of Royal Mails response to competition is
  to transform the whole pipeline, seeking large
  cost savings linked to a programme of extensive
  automation
• The Union accepts that some change will be
  necessary we cant defend genuine
  inefficiencies, we must make Royal Mail pay for
  efficiency
• We must develop our own clear solutions to the
  problems facing the company
• The race to the top, or the race to the bottom

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Key Challenges for the Union - 2

• The liberalisation of the postal market has
  forced some new issues for the CWU to consider
• We should not demonise the competition. Our
  members also have a choice
• In the future do we want to be a Royal Mail trade
  union or a UK postal sector trade union?
• Can we work with other trade unions who already
  represent workers in private postal operators?
• Can we help drive up pay and conditions across
  the postal sector

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Key UK Competitors 1

• At the present time there are a number of key
  competitors in the UK
• Market. These include
• DHL (Part of Deutsche Post World Net)
• TNT Mail (part of same group as Dutch national
  operator TPG)
• UK Mail (part of the Business Post Group)
• DX Network Services Ltd (including DX Mail
  formerly part of the Hays Group)
• In addition, private investment companies (such
  as CVC
• Partners which holds large stakes in the Danish
  and Belgian post
• offices) are actively seeking to acquire shares
  in European state postal
• operators

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Key UK Competitors 2

• DHL and TNT are currently utilising different
• strategies in the UK
• TNTs clear target in the UK is to become a rival
  market leader in key areas. Currently focussing
  on door-to-door items as a way of building
  relationships with business customers. The parent
  company is looking at selling off its logistics
  business to focus on mail services
• TNT is currently attracting attention from German
  investors who are looking to purchase the company
• DHL appears to be playing more of a waiting game.
  However it is continuing to acquire private
  postal companies across Europe

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Key UK Competitors 3

• UK Mail (part of Business Post) is the other
  large UK player. First to reach a downstream
  access agreement with RM. Recently its parcel
  division has experienced financial difficulties
• DX Services is the other notable player.
  Provision of document exchange services to
  professional sector
• In addition there are a growing number of smaller
  licensed postal operators

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Our Vision for a Successful Royal Mail - 1

• The Union will play its part
• Dedicated to delivering a successful
  publicly-owned company
• Need to expand and improve RMs products and
  services in a competitive environment
• Better training and equipment is key to
  delivering a quality service
• But we also need to raise the status and value of
  a postal workers job

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Our Vision for a Successful Royal Mail - 2

• Raising the value and status of a postal workers
  
• job
• Higher basic pay the UK national average
• A better work-life balance
• Maximise job security and full time employment
  while improving opportunities for part-time
  workers
• Safeguard our members pensions

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Our Political Agenda

• Successful campaign against privatisation
• Want a review of the Postal Services Act, the
  Impact of Liberalisation and the role of Postcomm
• Extend the nil dividend
• Campaigning for additional investment from the
  shareholder
• Want a level playing field for Royal Mail
• Want protection for customers and industry
  cant allow unregulated widespread entry from
  small operators

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Summary

• There will be change
• The CWU can effectively represent our members in
  a competitive environment
• We can grow the Union
• We are willing to work with Royal Mail to raise
  the value and status of a postal workers job and
  shape a successful future