SMEs in danger of postal strikes

FSB warns smaller companies could go under if invoice payments are delayed through further industrial action

VARs are feeling the bite of the postal strike as the Federation of Small Businesses (FSB) warns further strikes could force small companies out of business.

The strike in October is believed to have cost the London economy alone more than £300m after several thousand postal workers took part in the dispute, causing a backlog of 12 million letters and parcels in UK sorting offices.

Simon Briault, representative for the FSB, said: “It is not just about sending a few letters or parcels, it is about the whole economy. Research conducted by the FSB found that 94 per cent of SMEs use Royal Mail exclusively and 89 per cent of them use the company every day.

“SMEs do not really have an alternative to Royal Mail. Due to privatisation, alternative services have cherry picked the larger organisations, for example government bodies, and do not see SMEs as a business opportunity,” added Briault.

He continued, saying that SMEs are under severe pressure and the strike could cause businesses to close due to financial difficulties: “The FSB is trying to raise awareness of the issue and attempting to get Royal Mail to realise the position SMEs now occupy within the economy and the market. If SMEs are not receiving the cheques they need to stay buoyant, then they have to borrow money from banks and pay interest rates.”

Mike Gammie, IT services development manager at online VAR Misco, said: “Many businesses post us cheques - if we do not receive them then we cannot bank them.
“Royal Mail has not done itself any favours. Misco was looking at alternatives to Royal Mail before the strike and we are now opting for these,” added Gammie.

Lee Bevan, managing director of education reseller Leapfrog Computers, said: “People are using the postal strike as an excuse to drag out their payments by claiming it is in the post.”

Bevan added: “We also use parcel force, so we have had trouble with our shipments, making it difficult to meet targets. “Leapfrog has no choice but to
use Royal Mail and you cannot beat the value of it. There are not many firms that will go to remote places in Scotland on a moped for 22p, so it is still an excellent service. You cannot blame Royal Mail for wanting more money either, everyone does.”

Stuart Hayward, commercial director for online VAR Wstore,
said: “It has not really affected Wstore as we normally use a courier service, but it has pushed us further down the route of using electronic invoices.”