TNT Post hails UK contract wins adding up to 1bn mail pieces

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TNT Post UK has said a number of new mail contracts and contract renewals confirm its status as the “main challenger” of Royal Mail in the UK postal market.

The company may have lost major utility British Gas to Royal Mail recently, but boasted today of winning new contracts and contract renewals representing nearly a billion items of mail each year.

New contracts have been won with clothing retailers Cotton Traders and Matalan, who collectively send more than 35m items each year.

Contracts have been renewed with customers including telecoms giant BT Group, retailer Home Retail Group (parent of retailers Argos and Homebase), over-50s specialist retailer Saga, and the banks Santander and Barclays.

Insurance firm RSA, financial services firm Friends Provident, utility Thames Water, mail order firm Direct Wines and Capita, the UK’s largest business process outsourcing firm, also renewed mail contracts with TNT Post UK.

TNT Post said the contract renewals represent about 950m items each year within the Downstream Access market, in which items are entered into the Royal Mail network for the final stage of delivery.

The company told Post&Parcel that where customers are retailers, the contracts and contract renewals are for mail delivery, rather than mail and parcels. The contracts are all Downstream Access contracts, so were not won because of TNT’s new end-to-end services.

TNT Post UK said it now processes over 3.8bn items of mail each year, and last year saw its postal volumes growing by 5%.

Customer retention rates were “impressive” in 2012, the company said, adding that it aims to maintain and exceed the achievement in 2013.

“Strong client roster”

Nick Wells, the TNT Post UK chief executive, said his company was winning and retaining clients like BT and Home Retail Group by offering “innovative, quality and good value” postal services.

“At TNT Post we pride ourselves on delivering an excellent service to all of our customers, and we are proud to have such a strong client roster that want to stay with TNT Post of switch to our service,” said Wells, who will be speaking at this summer’s Mail and Express Delivery Show in London.

TNT Post, which has been running business mail services since the UK’s mail market liberalised in 2006, claims a 53% share of the UK’s Downstream Access mail market, which itself represents about 44% of the whole UK mail market.

The firm has seven dedicated sorting centres across the UK, with new facilities opening in Leeds and Rugby in 2011, and has recently invested £3m in sorting and processing machinery to improve service efficiency.

Last April the company launched a trial in West London in which business customers are offered a complete end-to-end mail service, including TNT’s own last mile delivery.

Recent figures from TNT Post’s parent company, the Dutch postal service PostNL, said that 600 mail delivery staff are working from five delivery units, delivering to more than 300,000 households through a six-day-a-week service. UK regulator said the service was delivering 345,000 letters per week up to December 2012.

The company said today that its parent was now looking to expand the service. A spokesperson said: “Our parent company PostNL is happy with the performance of end to end (E2E) in the past year, and announced recently that it is committed to rolling it out and seeking funding from investors for the next stage of E2E.”