is the number of postal items the UK’s Royal Mail Group handles each working day. The company is now slated for possible sell off by the LibCon government but why would anyone want to buy it?

The shocks are in the numbers. The company, a public limited company wholly owned by the British Government, explains that it “collects, processes and delivers around 71 million items to 28 million addresses at some of the lowest prices in Europe.” Why would a business boast about just how constrained its pricing is?

It is currently arguing that it needs to raise its bulk mailing prices because it is missing out on valuable income as canny direct mailers group their junk mail in bigger and bigger quantities so that, combined, they can negotiate deeper discounts for the “final mile” delivery the Royal Mail provides.

Meanwhile The Sunday Times revealed in early November that the company plans to cut its suppliers’ bills across the board by 20%. The Royal Mail refutes this but suppliers are reported to be livid, not least because it is believed that they have been given 30 days to negotiate new contracts.

As subtle as ever then, despite a changing of the guard in Royal Mail management. This is the same business that serially falls out with its 155,000 staff causing postal mayhem for its customers. Another recent display of management’s tact was when it emerged that its former boss Adam Crozier left to run ITV having scooped £2.42 million in pay and rations in his last year at the company.

Communications Workers Union deputy general secretary Dave Ward was quoted in The Guardian as saying, “Adam Crozier’s bonus came after a year in which he oversaw a national postal strike, lost the confidence of his workforce and then left before the job of modernisation and business transformation was complete.”

If Royal Mail management frequently manages to convey itself to the public as crass, the bolshy union representing the workforce seems no better. The language, rhetoric and blether from both sides is redolent of industrial relations speak of half a century ago. Why would an investor want to buy into that can of worms?

Or for that matter have anything to do with the Royal Mail’s pension scheme which guarantees the pensions of its massive workforce and is in deficit to the tune of £8 billion – that’s eight and nine noughts. The Government, it seems may be forced to ring fence staff pensions just to sweeten the Royal Mail for flotation.

While trumpeting its 71 million pieces of mail a day, Royal Mail also reveals that this figure is in fact seriously challenged. It admits, “Competition intensified during the [last] year with over 13million fewer letters a day being handled than just five years ago as people turn increasingly to other forms of communication.”

This is a monument to the fact that Royal Mail comprehensively missed the opportunity that it might have exploited by becoming a major on-line services provider. The lateral thinking jump from paper mail to e-mail is not one of Olympian proportions. They simply missed a QE2 sized boat.  They were and are able to reach every terrestrial address in the land and failed to help their customers establish a cyber one and, in the process, garner a massive advertising opportunity for the future.

Ok, this is easy to say with hindsight. But the worst is yet to come. Many (most?) of Royal Mail’s customers may like their local postman and are comforted by the noise of their letterbox as he/she makes his/her delivery, but a good deal of what he/she brings is in large measure at best an irritation and at worst downright annoying.

Much of what the Royal Mail now delivers is unwanted junk mail, often from financial services providers. I cannot say how dependent it is on revenues from this source but, as the Direct Marketing Association confirms, their members are steadily moving to other lower cost, more sensitively targetable media. This revenue stream is therefore seriously under threat. Royal Mail is making up some of the ground through the delivering on-line shopping but as anyone who has received deliveries from DHL, UPS, City Link et al can see, there is plenty of competition for this business from some very professional operators who have massive international reach and economies of scale.

In total, the numbers that describe the Royal Mail tell a sorry tale. The UK’s fine upstanding Royal Mail claims 370-years of experience but is it a business fit for the twenty first century? Is its sell off being contemplated by the LibCons to stop the very expensive rot? And is it a business that looks like offering investors something worthwhile should it float on a public market? Answers on a postcard to Post Office HQ – but don’t bank on it being delivered, Royal Mail loses or substantially delays over a quarter of a million letters each week…