Royal Mail have shipped 117 million more parcels in the three months from the 30th of March to the 28th of June. That’s the result of a pandemic showing millions of consumers stayed at home and switched to online shopping while the shops were closed.
From a consumer perspective it’s all good news – more online purchases arrived at home but at the same time advertising mail was impacted with low levels of business activity and so there was less junk mail arriving on our doorsteps. One might also consider this a good thing, but delivering millions fewer letters isn’t going to be good for Royal Mail’s finances.
“As the UK starts to come out of lockdown we are not seeing any change as yet in customer behaviour. Our customers are wanting more parcels delivered to their homes and are sending fewer letters. We are working as quickly as we can t o adapt our business to meet our customer needs.”
– Royal Mail
Royal Mail Quarterly Volume Highlights
- Parcel volume up 38% year on year (117 million more parcels)
- Domestic account (excluding Amazon) parcel volume up 64%
- Addressed letters (excluding elections) volume down 33,788 million fewer letters
- Volumes up 22% year on year
The integration of Parcelforce into Royal Mail is continuing with Nick Landon acting as Chief Commercial Officer with oversight of all commercial and service areas for UKPIL and Parcelforce.
The management restructure which will see 2,000 senior leaders and managers made redundant and actions on non people costs in Royal Mail, alongside Group capex reduction initiatives, are all underway.
Royal Mail are also back in talks with the CWU with the aim to develop a mutual interest strategy to build a successful future for customers, employees and the business. Talks will also address the immediate operational and financial challenges facing the business covering five key strands:
- The financial position of the company
- Local revision and change activity
- Operational change and the future strategy of Royal Mail, including Parcelforce
- The potential to better use the company’s unrivalled infrastructure
Royal Mail still expect to be materially loss-making in the 2020-21 financial year with no final dividend for 2019-20 and no dividend expected to be paid for the whole of 2020-21. If GLS continues to perform this might support a dividend in 2021-2022… if the company isn’t forced to sell off the division in the mean time.