Mail Order Business - How To Cope With A Postal Strike
The United Kingdom garnered rather a bad name in international commerce during the 1970s due to a continuing serious of major strikes. This culminated in the country working a three day week, a television curfew from 10pm each evening, and a power cut every night from 10:30pm to save the ever diminishing coal stocks due to a minors strike. The country was literally brought to its knees.
Strong Unions often claim the high moral ground, with an ethos that corporations under a free market will always seek to minimise working conditions and pay for its workers. Their epitomise a view that without the Union Victorian working conditions will resume, with young boys being sent up chimneys, and workers being paid tuppence a day - or even less! However, this is only part of the story. A company needs to be successful and efficient to make sufficient profits to pay its workers. Without the successful company, there will be no jobs or conditions to dispute over. The United Kingdom saw such a phenomenon with a vociferous strike at a car company called British Leyland. The industrial action was most complete and had the desired effect of bringing the company to task - the problem was British Leyland went bust as a result. Not much of a victory for the union, nor the workers on strike, if you manage to kill off the Golden Goose. The few percent of wages under dispute, pales in to total insignificance compared with a total loss.
The consequent problem was that the United Kingdom's reputation for industrial action directly effected further investment - particularly pertinent in an ever increasing international market. This resulted in tougher laws to regulate unions, including mandatory secret ballots, and strict limits to the striking scope. It is generally recognised that a Company needs to be efficient, to employ and pay its workers. Ever increasing efficiency is really in the interest of the wider workforce, provided the spoils are fairly shared, of course. Industrial action nowadays is comparatively rare for United Kingdom companies in the free market private sector. Though Royal Mail is in fact a private company, it in effect shares much of the traits of an inefficient public sector organisation as it remains wholly owned by the government.
The taxpayer funded public sector is a different matter. When a public sector worker considers his position, and those of his friends and colleagues; there is precious little incentive for a government agency to be efficient. This could result in job cuts, with the realisation that a significant proportion of the people employed do not really achieve much in the way of meaningful work. An inefficient public sector is self serving; capitalism and profit seeking may be dirty words in some quarters - but certainly provide a strong incentive for the owners of a company to maximise efficiency and hence profit. In the United Kingdom for the year 2006 official statistics show that over 95 of the norm for this time of year. The immediate objective was to find an alternative carrier. In fact we discovered that our existing courier Citylink were most helpful and provided Datalite with a special deal for smaller items. This meant Datalite were still able to continue to despatch personalised gift products, albeit at a higher delivery charge for own mail order customers. One plus was that finding a solution put the company in an advantageous competion position amongst competing mail order suppliers. However this was more than offset, by a general reduction in demand for mail order products by the general public due to the affects of the Royal Mail strike action. As a rough estimate Datalite saw a 75% reduction in orders, directly attributable to the strike.
The third observation and tip, is to keep the customer fully informed. For our internet customers, each despatch E-Mail was accompanied with a latest information on strike E-Mail. This reassured the customer that there item was on its way, but gave up to date information on the reality of the strike.
The fourth lesson learnt was to negotiate with existing suppliers. By way of example Datalite Uk Ltd's postage franking machine is supplied by a company called Pitney Bowes. The postage strike was not their fault, but gave us due credit for the reduction in use due to the postage strike.
The final lesson, is to learn from the experience. By way of example, if you get all your supplies from one supplier, question what happens if that company has a crisis (a strike is a crisis) or worst still goes bust? As often cited in the military, ensure a back up plan is in place. This is particularly pertinent for mail order companies; the strike has illustrated that solely relying on the Royal Mail is bad for business.
Incidentally as this article was written, Datalite's own costs due to the Royal Mail strike action were significant, loss of sales amounted to thousands of pounds, postage franks were wasted due to unavailability of service, hire costs of postage franking facility ended up a waste of money (partially offset by Pitney Bowes most helpful assistance). Datalite was able survive thanks to adopting the strategies above. The company was therefore most surprised to find a card from the Royal Mail, Revenue Protection based in Portsmouth for the amount of four pence (i.e. £0.04 or 8 cents in USA money) for which they have billed the company 84 pence (including an 'administrative fee'). Royal Mail have cost the company (and many others) many thousands of pounds, directly due to their strike action (some of which broke United Kingdom laws) and had the cheek to bill for four pence plus an administrative fee.
In summary the United Kingdom's Royal Mail strike had the potential to be devastating to numerous small (and not so small) businesses. However, Datalite gained useful future business information, and has added courier next day delivery as a further option for customers of smaller items. The real loser out of these strikes in our considered view is Royal Mail, they have lost much goodwill and indeed custom, much of which will never be retrieved. What a way to run a business!
Further information on Datalite UK Limited can be found by visiting website http://www.datalite.org
About The Author
John D Henry BA BSc is Managing Director of DATALITE UK LTD
Datalite UK Ltd is a company based on the Isle of Wight supplying personalised gifts and picture frames.
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