Last Thursday, Royal Mail results were reported for their half year and things are looking up for the UK’s national postal carrier. The boost in online shopping and resultant deluge in parcels has seen the company only lose £700,000 a day instead of £1 million a day. Additionally, Royal Mail parcels revenue is now larger than their letters revenue.
Group revenue is up 9.8%, driven by strong parcel growth at both Royal Mail and GLS. The Royal Mail Group reported an operating loss of £20 million, adjusted operating profits of £37 million and strong growth in GLS profit. Before adjustments, Royal Mail made £17 million profit overall but only because star performer GLS delivered a hefty £150 million profit, more than offsetting the loss made by Royal Mail. This represents revenue growth for the first time since privatisation.
The growth in online shopping and parcels during the pandemic, combined with our increased focus on delivering more of what customers want, has led to revenue growth of nearly 10% for the Group in the first half, with Royal Mail revenue up nearly 5%. For the first time, Royal Mail parcels revenue is now larger than letters revenue, representing 60% of total revenue, compared with 47% in the prior period.
GLS delivered strong revenue growth of 21.7%. B2C accounted for 56% of GLS volume in the first half. Adjusted GLS profits were up to £166 million – a rise of 84.4%.
The reduction in letter volumes has had a significant impact on the regulated business which lost £180 million in the first half, and says Royal mail demonstrates the need for change in the Universal Service. Some like Citizens Advice don’t like the sound of this – in all likelihood it would mean the loss of letter deliveries on Saturdays.
“As the consumer advocate for the postal sector, we’re wary about any calls made to change the Universal Service Obligation. The Universal Service Obligation is a vital safety net that keeps post fair and affordable. Any rebalancing needs to reflect this, so it focuses on people’s needs, not just the bottom line.
Even before the pandemic, six in ten people said they’d feel cut off from society if they couldn’t send or receive post. During these uncertain times, post is increasingly becoming a lifeline for many. It’s allowing people not only to stay connected with loved ones, but also to receive vital financial and health-related information.”
– Alistair Cromwell, Acting Chief Executive, Citizens Advice
With letters business slowing and parcels on the rise, the pandemic as obviously been a challenge with the cost of COVID-19 to Royal Mail being in the region of £155 million. With Black Friday just days away, many Tamebay readers are interested in Royal Mail’s delivery performance and specifically for parcels for which performance isn’t publicly reported.
Royal Mail results for one Tamebay reader
One Tamebay reader, after reports of many non-receipts from customers, did an audit of 81 consignments that we sent by Royal Mail 48 on Monday the 9th of November.
Just 12% of parcels were delivered within 3 days, 54% took 7 days and 12% still had not been delivered by Thursday the 19th of November, a full 10 days after despatch.
This may of course not be typical of everyone’s experience but it would suggest that many parcels are taking longer to be delivered than Royal Mail’s stated delivery aim.
7 Responses
very similar to our metrics ,
we understand the difficulties given the current situation,
such as ebay need to alter their delivery estimates to suit
same here, we sell cheap wholesale items so everything goes 2nd class, and the amount of abuse we are currently getting from people +7 days after delivery its nuts,for the 1st time 8 years on ebay full time we have gone to 1st class and gone from same day dispatch to 2 day dispatch, so only costing us more, i really wish we could use another delivery service for such small items are royal mail cost us so much in loss and replacements
I don’t think ebay needs to do anything. It’s Royal Mail that needs to get in to the 21st Century. No other courier has statistics like the one showed. You may get an odd day late and that is about it. Royal Mail needs a big shake up of what is does and it is desperately needing automation and 7 day working, deliveries and collections. We all know that this is not going to happen as the union will put there foot down and stop it from happening or as usual threaten to go on strike. Once upon a time we sent everything through Royal Mail and now we would not touch them with a barge pole as they don’t care about the customers they have.
We’re suffering the same with Royal Mail. Huge delays, especially on parcels sent on a Monday.
Royal Mail using the LIFO model (and pretending that they don’t).
Same patterns of delays here, particularly with Monday post.
In the first lockdown, my longest delayed parcel was one sent to eBay’s GSP warehouse. It took 3 weeks (2nd class) for Royal Mail to deliver it and was scanned in the same day by eBay for its onward journey. Buyer never contacted me to complain! yet I am getting people in the UK open cases within a week taking the “estimated” delivery date as written in stone. Cases should not be allowed to be opened so early as they can be awarded, refunded, then the item arrives!
Clearly Royal Mail have problems, given the situation it is understandable to some extent. However what is not understandable and completely indefensible is why ebay have not altered their delivery times.
It’s not rocket science.