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Lessons learned from Whistl’s troubles

Lessons learned from Whistl’s troubles

Last week, a private mail delivery company in the UK called Whistl announced it was suspending delivery operations, on the heels of its loss of a private equity investor’s funding. A news story about the situation, including comments by UK Communications Workers’ Union Dave Ward, is linked here.

Whistl (formerly called TNT Post) was established as a joint venture of Dutch postal operator PostNL and a private equity company called LDC (part of Lloyd’s Banking Group).

In 2012, Whistl became the first private company in the UK to introduce large-scale end-to-end delivery of mail—the pickup, processing and delivery of mail. The company began delivering bulk mail in the major UK cities of London, Manchester and Liverpool, and said its goal was to have 42 percent of UK addresses covered by its end-to-end services by 2019.

Last month, LDC pulled out of the joint venture.

At first Whistl said that it would continue to do business, but last week the company announced it was suspending its operations. Now, 2,000 Whistl workers are at risk of losing their jobs.

Whistl’s difficulties follow the recent collapse of a private parcel delivery company in the UK called City Link.

City Link, which had more than 2,700 workers, ran into trouble right around the busy holiday season.

In 2008, the European Union’s Third Postal Directive law paved the way for private companies to compete with Europe’s national postal carriers. This law had the effect of opening up one third of European letter volume to full end-to-end competition.

The postal services section of the European Commission website gives an overview of this law. 

Many of the new private delivery companies rely on contracted delivery employees, or employees on so-called “zero hours” contracts, establishing a model of temporary, irregular employment in the postal sector. The companies also have been accused of “cherry picking”— that is, focusing only on the most profitable delivery areas, to the detriment of nationwide universal service provision.

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