TNT Post and Royal Mail: end-to-end competition in postal services

TNT Post are in direct competition with Royal Mail in parts of London, Liverpool and Manchester – they now provide a full ‘end-to-end’ service in these areas, delivering business post directly to the addresses of customers. TNT Post’s end-to-end business has expanded rapidly since they started trials for the service in West London in April 2012 and they are said to be aiming to cover 42% of addresses by 2017.

Royal Mail believe that this competition is a threat to the universal service they provide, suggesting that TNT Post ‘cherry pick’ certain routes and noting that – unlike Royal Mail – TNT Post do not have to pay the costs of providing a service six days a week to all addresses across the UK.

This note explores end-to-end competition in postal services, TNT Post’s expansion, Royal Mail’s concerns, possible responses and the position taken by Ofcom, the regulator, so far.