Profits threat to Jersey Post
Wednesday 31st March 2010, 2:57PM BST.
JCRA executive director Charles Webb
JERSEY Post could go from making millions in profit to a loss next year as a result of a decision by the Island’s competition regulator.
The utility business is set to lose the monopoly it enjoys on delivering packages and large letters for the fulfilment industry.
The decision to recommend granting licences to two companies – Citipost DSA and Hub Europe – to compete has been described as ‘partial liberalisation’ of postal business by the executive director of the Jersey Competition Regulatory Authority, Chuck Webb.
Both the companies expressed delight at the decision, which has taken the JCRA over a year to make, but Jersey Post is likely to fight it.
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I would say that Jersey Post have been abusing its monopoly for many years – diversifying into none postal markets and reaping the benefits of the fulfilment business to pay off its pension debts. Now it worries about the spectre of competition – something it is very happy to do in other markets – often in conflict with its own shareholders.
There is no doubt that competition will lead to cheaper prices for Jersey business… let’s hope that it is not too late and that these businesses might be able to grow and provide new opportunity and employment.
This is Jersey Post scare mongering – they talk of the 16% drop in letter post but do not mention the 10 million item increase in parcel traffic.
Good luck to Citypost DSA and Hubeurope…. Jersey Post – maybe competition will make you concentrate on your core business and not try to launch mobile phones and services that take retail money off the Island.
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This is just the same as Jersey telecom with letting in competitors
On one hand we all want competition to drive down prices, but these Jersey companies pay a huge tax to the island
Bring in competition means lower prices for us, but then ensures that jersey companies make no money, hence do not pay the level of tax to the states
Where is the sense
We live on an island, we do not have the numebrs of people to make competition against a small Jersey company by a multi National cost effective
So short sighted !
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we would all like a monopoly given the chance!!
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I wonder if they’ll learn anything from Jersey Telecoms,who hung on to prices so long others were let in and they are now a seriously diminished company….?
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Jersey Post were happy to get their Mobile Phone Operator licence despite an already crowded mobile market. Are they “Throwing stones in glass houses ?” Having said that if the 2 companies providing alternative postal services are not even going to pay tax in Jersey, then maybe we should be reviewing whether the States funding the JCRA is actually just adding to the outrageous “Blackhole” already created by our inept Politicians not controlling spending !
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Well it looks like jersey post could be a thing of the past il have 2 plant a reef outside there ofice door. These companys will be taking all play.com work, flying flowers and a couple of other big companys. The money that they will get will be taken out of the island !!! So vic you say good luck to them, whats going to happen to the staff that work at jersey post ? when the company say sorry folks but most of you now don’t have a job, who is going to pay there social money as i would think about 10 – 15 million pounds will be taken out of our island through these companys.
Are you going to pay there social ???? i delt you will.
So lets start trying to save jobs in the island and keep the money in the island.
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Jersey has about 90,000 people and about 30,000 homes. Competition is good, but we have to be realistic. How can 3 companies get an adequate return on their investment with such a small available market. The government saw fit to close down the businesses that were operating in Jersey providing VAT free products to England etc… So how will these 2 new companies be able to generate sufficient income from the local population. It will mean a degradation in services, loss of posties and eventually, after the initial euphortia has settled down, an increase in prices. We have not yet seen real competition with Jersey Telecom, our broadband is slow, expensive and unreliable – so it is difficult to compare JT with the PO. And what about the profit the government is going to forfit – increasing the black hole is not a good idea. Local knowledge by the JCRA director would be a good thing, rather than mindlessly following the path set by the UK.
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I am afraid the regulators decision is correct and inevitable.The cost of postage is totally prohibitive and the market has to open up.Jersey Post is poorly managed and the current costs to the consumer and local businesses has driven an enormous amount of business off island.This decision in time will only be good for the island.The current bleating by Post office management would be better focussed on providing a better service and concentrating on core business.There appears to be an enormous amount of hypocrosy
concerning public statements coming out of Post Office HQ
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just to let you know PS that these two companys will not be touching any mail, they will only be taking the fulfilment work whih brings in multi millions to the island.
I think the man in charge of the JCRA is from canada so what does he know about our island !!
Im trying to find out about hub europe only there web site is only one page with nothing on it !! and they have been given licence.
This island is going down the drain the ministers are allowing outside companys to take our money of this island. Its no wonder that we have a massive black hole !!!!!
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Let’s be very careful here. We, alike the majority of Britain, are fortunate to get door to door delivery. Compare this to some parts of the world, for example the Caribbean islands, where the post is left for collection at a local “centre” that maybe 2 or 3 miles from the addressee. How would that suit the elderly or infirm? The islands service providers surely need a balance of the more profitable and the marginal or loss making business. By letting new and in particular, outside businesses cherry pick the more profitable aspects we may be making a rod for our own backs when in years to come the service provider is unable to make a profit from the business that’s left and comes cap in hand to the States (us) for subsidies. Jersey Post will not be able to run at a loss for long!
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Duke No 9
For your information Duke The man in charge of the JCRA is American !! a Canadian would have more sense
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If the Jersey Post Philatelic Service is anything to go by, no wonder Jersey Post, as a whole, is losing money.
Last autumn I ordered a first day cover from the Philatelic Service, paying by credit card.
It took N I N E emails and a further three phone calls to get the one item I had ordered.
The pitifully lame excuse for Jersey Post’s appalling “service”: “We were stock taking”.
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Well that should finish off Jersey Post then.
I personally would shut the JCRA down and put the money to better use. If they carry on as they are we will be footing the bill via increased taxes to make up the shortfall from JT and Jersey Mail. I can’t believe people over here are so gullible.
reggio I presume this American is a J-Cat then? Indeed how did he get the job, surely we could have found someone from within the EU to fullfill this role?
I will say this to Chuck for the umpteenth time. When are we going to have proper competition on freight and travel routes into and out of Jersey? As I have said before I don’t give a damn about saving a few pounds on a mobile or a land line or on the cost of stamps, BUT I DO MIND SPENDING MORE THAN I SHOULD BE ON BASIC COMMODITIES LIKE FOOD. Hopefully you will take note and look into this very important area.
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Lets not forget that Jersey Post not only competes with JT et al with mobiles!
They also run “ship to me” that allows locals to buy from Argos et al rather than from local shops!
They are therefore happy to compete with those that already have to compete but want no competition where they have a monopoly….Pot and kettle comes to mind!!
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What is it with people on this island that they don’t want a healthy competitive business market?
Companies entering this market will carry out feasibility studies to see if it worth their while. Knowing how poorly run Jersey post is I doubt that any decent mail carrier will take long to see them off.
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Robert #14
Spot on lad – though as ever it’s the fat-cat over £50k salaries who are crying over their spilt milk… notice how Durrell , JT , The Bankers (silent W) ..etc bosses are all doing the same & instead of taking pay cuts or not taking ridiculous bonuses they make redundant the working staff (usually the ones who earn less than £20k…..
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Just as we look back in amusement at concepts like a flat Earth, future generations will look back and wonder what on Earth was going on here.
“…During the early 21st Century the government decided its own post and telecom services were too expensive, it spent a fortune on the JCRA so it would encourage companies to compete against it. All the profits & tax from the operation went offshore because of the nifty new tax structure and the government run operations promptly closed down. These days islanders queue-up each Saturday morning to check their mail in town. Problem solved!…”
There’s no substitute for a well run government-owned post service which, by nature, would be reasonably priced. Instead we’re letting in companies who only want to skim-off the cream.
There’s much talk about Jersey Post taking Telecoms business, and a valid point about Pots and Kettles but let us not forget that the employees don’t make the decisions.
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PS (7) Jersey has about 90,000 people and about 30,000 homes. Competition is good, but we have to be realistic
Yes but the commercial battle ground will be the fulfilment industry which is providing a cross subsidy. My postman has my full support, he is a nice chap, but I increasingly use the internet for both shopping and emails.
We could change GST on all retail sales, including internets sales, bringing commerce within the EU envelope. Maybe not today but it will be forced Jersey, one day. Be realistice.
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My only message to Jersey post is to tell your postmen (women) to stop littering the street with their red elastic bands. They just dump them on the street when they take them off the post. You keep doing this and I will bring a private prosecution.
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#19 Said as Seen
“tell your postmen (women) to stop littering the street with their red elastic bands.”
Oh no, please don’t. These elastic bands are ideal for putting around wads of £20 notes.
There are other things you can put them round, doubled, too!
I would have to buy them if they weren’t there to be picked up. The exercise of bending down is good for my heart.
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I can imagine the chaos now..
3 different sets of stamps, different post boxes (assuming they get planning permission, which they will as Jersey post won’t allow them to share like JT and their phone masts) 3 different post men, delivery times etc..
Welcome to the Asylum folks, please take a seat a member of the council of ministers will be around shortly with the special white coat that does up at the back.
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Well get used to paying more taxes because as JT’s profits dwindle along with the post office Joe Public will be footing the bill via increased GST! Well done suckers you deserve it! Not a clue about things thats for sure.
Who do you think will be profiting from this competition? Its unlikely to be the customer IMHO however someone will end up with a nice wedge in their bank accounts due to this move by the JCRA.
If anyone had any brains they would be demanding the JCRA get more competition on routes into and out of Jersey to push down travel and freight costs. So why isn’t this happening? Who makes money from these things? Would it be these people who don’t want competition I wonder?
How many more will this decision push out of work I wonder and will they be replaced by cheap migrant labour?
If the post want to do a set of stamps they should do a set based on how Jersey has gone down the tubes these last 20 years or so. Maybe a nice picture of our newest iconic build on the waterfront, the insanerator, so cheap they couldn’t afford a chimney for it and are having to use the JEC’s one instead! Nevermind I don’t fish on that side of Jersey so hopefully I won’t be affected by any unforeseen circumstances!
I’ve gone past laughing now as I know that no matter how bad things get over here the states still have the ability to make them even worse due to their inability to think in a logical manner. The funny thing is most of the voting electorate will continue to vote for these characters. All I can say is that they must be very dim!
CLV yes the bands are great it saves me a few pence and you get something for nothing for a change. No doubt this will stop once every last penny has to be accounted for!
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#20 That made me giggle, some of my colleagues have an abundance of them on their desks.
I haven’t had the need to use the more complicated services that Jersey Post can offer but I have been impressed by the job that their postal workers do and how polite and friendly many of the workers are. I remember the UK service being like that once but it stopped over a decade ago.
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