Inquiry launched into postal sector after Royal Mail warnings about unfair USO competition

Royal Mail believes its universal service obligation might be at risk (Source: Getty Images)
A new inquiry into competition in the postal sector was launched by MPs yesterday, following warnings by Royal Mail that its universal service obligation (USO) might be at risk due to rivals “cherry picking” profitable areas.

The business committee will investigate the impact of competition in mail and parcel delivery services on the USO, which requires Royal Mail to provide a six-days-a-week postal delivery service across the whole of the UK.

A Royal Mail spokesperson said: “We will play our full part in the committee’s inquiry into the key issues for the universal service and the UK.”

Royal Mail has previously suggested that rivals have an unfair advantage due to its USO, a requirement that other postal firms do not have to meet.

Rivals such as Whistl, formerly known as TNT Post, have grown direct delivery services in many profitable urban areas.

A Whistl spokesperson said: “We are happy to take any opportunity to explain the benefits of competition in the UK postal sector.”

Meanwhile, Dutch logistics firm TNT Express, separate from TNT Post since a 2011 split, saw its shares fall 11 per cent yesterday after releasing a profit warn­ing due to weak trading conditions.

TNT Express also said it had put aside €50m (£39m) in relation to an investigation by French competition authorities, which are also looking into other firms, including Royal Mail’s GLS subsidiary.

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