Whistl, the postal service formerly known as TNT Post has suspended deliveries with possible redundancies for 2000 delivery workers. Deliveries will still take place, but Whistl will revert to using Royal Mail for the last mile delivery to the letterbox.
The cut backs are as a result of LDC (a division of Lloyds bank) pulling out of an investment in Whistl. Whilst the company will continue to operate, lack of funds mean end to end delivery services are no longer viable.
Whistl has been criticised by Royal Mail for cherry picking services in cities such as London, Manchester and Liverpool whilst leaving the national postal service required to maintain the Universal Service to the whole country including the less profitable rural areas.
There are two ways to view Whistl suspending deliveries, apart from the human cost to the employees who are likely to lose their jobs. Firstly it puts Royal Mail in a stronger position to ensure the Universal delivery will remain in place. However on the other hand less competition in postal services and consolidation of the courier market may give Royal Mail the ability to edge prices up which won’t be welcome news to sellers.
Whistl are unlikely to go bust, they still own a 14.7% stake in TNT Express and it was announced earlier this year that TNT Express is to be sold to Fed Ex for some €4.4 billion so an influx of capital is on the cards at some point in 2016.
Following the announcement from LDC that it would not proceed with the proposed investment to fund further rollout of E2E, we have now commenced an extensive review of the viability and potential for the rollout of an E2E postal delivery service in the UK.
To stem the losses from the operations we have taken the difficult decision to suspend the current E2E service during the review process and all mail will now be delivered through our long-standing downstream access service until we have concluded the review.
As part of this extensive review, we will begin consultations with the relevant employees who are affected by the suspension of the E2E service, and with their union representatives, with a view to identifying and exploring viable proposals to secure the continuation of this service.
Well that didn’t last long…..
If they have a 14.7% stake in TNT Express and it to be sold to Fed Ex for some €4.4 billion, why did they need LDC to inest?.
Royal mail may get a good deal on state of the art sorting machines though……
Sad news – UK desperately needs some competition in this space – anything to break up this overpriced / shoddy service RM monopoly.
Just to clarify, Whistl is still going. It is their E2E end to end final mile delivery offices that are closing. They are closing their private final mile offices and contracting final mile delivery back to Royal Mail via downstream access agreements.
Whistl “end to end” was a disaster, partially because there was no return to sender mechanism. This was a major problem.
Royal Mail manage this database, and it’s not open to competitors.
Some points to note for end to end:
1) Whistl end to end cherry picked postcodes with high density housing such as flats and terraced housing. Something was going to give eventually.
2) End to end never did bother with e-commerce large letters / packets. It’s cheaper to give to Royal Mail !
3) Holding back mail until a round has enough volume to warrant delivery. Waiting 7+ days for mail is unacceptable.
4) Trust, Whistl employed some questionable characters via back to work schemes and on zero hour contracts.
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