RMG/CWU BUSINESS RECOVERY, TRANSFORMATION AND GROWTH AGREEMENT:Establishing an optimised single parcel network for larger parcels

[POSTMAN]

5. Establishing an optimised single parcel network for larger parcels

Royal Mail needs to improve its competitiveness in delivery of larger parcel formats, which is
the fastest growing segment in the parcels market.

Historically Royal Mail has operated two networks (Parcelforce and Royal Mail Core) and
two sets of systems. This means services often cover the ground up to four times a day,
adding cost and inefficiency into the business and increasing our carbon footprint.
Royal Mail and the CWU agree in principle to the creation of a Single Parcel Network as a
strategic ambition. The intent is to utilise the new parcel hubs, the Direct Parcel Routes and
Parcelforce depots as a single, synergised parcels network covering the entirety of the UK.
This network will be better for customers by enabling Royal Mail to be more competitive,
achieve higher quality and offer better services.

Royal Mail and the CWU agree to undertake a strategic review that will inform the best
approach to building this new single large parcel network in the UK to deliver the most
effective balance of cost, coverage, and service. The review will encompass both
commercial and operational levers.
Both parties recognise that implementation of the single parcel network is a long-term project
and that there will need to be interim change in Parcelforce beginning immediately to
stabilise the business and return it to profitability. This comprises of two elements; (1)
immediate action set out in Appendix 3; (2) a rapid review of Parcelforce, also included in
Appendix 3, that will conclude by the end of June 2023. Both parties acknowledge that the
solutions that come out of the Parcelforce rapid review (as set out in Appendix 3) may be
changed or superseded by the outcomes of the parallel Single Parcel Network review in due
course.
In developing an optimised single parcel network, it is anticipated that c85% of all parcels will
continue to be delivered through the Royal Mail Core network consistent with the
commitment made in the Pathway to Change agreement and move towards a twice over the
ground principle where it is economically viable and makes customer sense.

The joint review will fully consider the following options;
• Maximising operational synergies between all parts of Royal Mail and Parcelforce
(including moving to a single network on Sundays as quickly as practicable); Including
consideration of the optimum number and location of the overall integrated depot model
including the 54 Parcelforce sites, with a view to improving drop density on all product
streams and reducing stem and interdrop mileage.
• Re-integrating Parcelforce into Royal Mail over a period of time, with a plan to harmonise
terms & conditions of existing contracted employees.
• Developing a single suite of Parcel product offerings to minimise internal competition.
I.E. RM and PFW not offering identical products.
• Enabling Royal Mail to operate a 24/7 network, with parcel deliveries being undertaken
across the whole day including the AM period.
• The design and pilot of a new hybrid reward mechanism based on a price per item
approach for performance beyond standard, based on the learnings of the trial scheme
agreed in Parcelforce in 2021. Discussions would review the potential for a joint trial for
alternative reward beyond core attendance and to develop a plan to balance workload,
set targetry and reward levels and meet employee aspirations for earnings. The purpose
being to incentivise performance while maintaining earnings levels. Within this, to
improve quality and competitive unit cost, consideration will be given to the replacement
of SA/overtime by pay per parcel delivered in both Dedicated Parcel Routes and current
Parcelforce duties.
• Consideration of the allocation of vehicle types and capabilities across the full SLPN
network. I.E. Spread of Parcelforce type (H&L) duties across a larger number of sites.
• Review of Network capabilities and synergies, with a view to combining or aligning
containerised and loose load networks
• In conjunction with achieving the right balance of cost, coverage, and service, and jointly
developing alternative reward models both Royal Mail and the CWU acknowledge that
depending on the outcome of the review the Single Parcel Network will be based on the
preference of a fully employed model.

5.1 Dedicated Parcel Routes (DPR) in Royal Mail network

5.1.1 The principle of operating DPRs out of c346 RMG Depots has been agreed with
upstream sortation of large format parcel direct to those depots.

5.1.2 There is agreement to integrate existing LAT and DPR routes from c346 Parcels
Depots.

5.1.3 The new parcel delivery jobs will work in the afternoon window to ensure we cover
the ground once with larger and later (LAT) parcels. The parcel delivery jobs will be
available to employees in the depot catchment areas.

5.1.4 Both parties want to encourage take up of work on the DPRs by Royal Mail Core
employees. The priority will be to encourage current employees on existing terms &
conditions to follow the work. It is recognised that to achieve this, an alternative
resourcing approach will need to be developed and agreed that supports the
following two principles:

(1) being attractive to employees; and
(2) delivering a competitive unit cost per parcel.
The parties will explore all options to achieve these objectives, including the following;
- introduction of new innovative productive duty patterns (such as duties that start
later, rotating duties)
- additional earnings opportunities / new reward mechanisms based on the hybrid
pay per parcel model

The above options will be applied in all circumstances including where local revisions have
already deployed DPRs. Both parties are committed to developing the above solutions in a
way that removes the need to use non-Royal Mail Core employees, or alternative
resourcing options, to cover this work.
In the event employees do not volunteer to follow the work, after utilising and developing
all options contained in this agreement, Royal Mail reserves the right to use alternative
resourcing arrangements.

[SpacePhoenix]

• Developing a single suite of Parcel product offerings to minimise internal competition.
I.E. RM and PFW not offering identical products.

Don't know what they plan to do. SDs and Tracked are basically identical products to PF, SDs being more so. It makes me think that one of either PF products as a whole, Tracked or SDs will be axed as a product

[ted_e_bear]

Replacing SA/overtime with pay per parcel, hmm, and what will come next eh ?