DPD seeks to put Royal Mail under further pressure

[POSTMAN]

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One of Royal Mail’s biggest competitors is planning a 22 per cent increase in headcount as it predicts an eretailing-led boom in parcel deliveries.
DPD, the express delivery company, is bolstering full-time UK staff numbers from 9,000 now to 11,000 by 2016 after winning lucrative contracts to deliver parcels for John Lewis and Marks and Spencer.

The move is a shot across the bows of recently privatised Royal Mail, which last week blamed a 21 per cent fall in interim operating profits on the retailing giant Amazon’s move to deliver more of its own packages. The postal service said Amazon’s increasing self-reliance would cut growth in the British parcels market to between 1 and 2 per cent for at least two years.

Dwain McDonald, chief executive of DPD, said: “We absolutely fly in the face of what Royal Mail says. We are testimony to the fact that there is growth in the parcels market if you can get the proposition right.

“People are coming to us because they want guaranteed delivery times and good service and that’s the reason we are taking market share.”
Faster delivery times have become a critical issue for postal operators and retailers.

DPD’s success is mostly attributed to a nationwide seven-day service that uses GPS technology to give customers a one-hour delivery window and lets the company track the driver on route.

It started its Sunday service in July, which can collect from business customers on Saturday – the biggest internet shopping day – for next-day delivery to 98 per cent of the UK population.

DPD is wholly owned by France’s La Poste, the second-largest postal group in Europe, and has been growing its parcel volumes from 485,000 in 2012 to an expected 150m this year.

Royal Mail’s Parcelforce service, which competes directly with DPD, has since June delivered for certain retailers on Sundays – but only notifies recipients up to 90 minutes before arrival time.

In September it started trialling Sunday deliveries within the M25 for other packages but with no definite time slot.

DPD has reinvested profits in building one of the biggest automated parcel sorting hubs in Europe, which will open in Hinckley, east Midlands, next September, raising the company’s processing capacity from 800,000 parcels each day to 1.4m at a cost of £100m.

Royal Mail had placed parcels delivery at the centre of growth plans in its £2bn flotation last year, but revenues in the division fell 1 per cent in the six months to September 28 even though volumes grew 2 per cent.

Analysts expect growth across the parcels sector of 4 to 5 per cent each year. Joel Ray, head of consulting at Transport Intelligence, said DPD has been growing very quickly, largely because of its delivery technology.

“Their profits are at the higher end in the sector and their focus on the premium part of the market allows them to reinvest more in developing their network, particularly in geographical areas with high ecommerce sales,” he added.

[interesting]

We do a lot of marks and Spencer's tracked

[Lounge Lizard]

We do a lot of marks and Spencer's tracked

Soon it'll be we did a lot of Marks and Spencer's tracked

[Chitchat]

Surely we can compete with DPD timed deliveries by assigning someone in each office to solely doing timed deliveries. And bang goes DPDs only selling point!

[raikky]

Surely we can compete with DPD timed deliveries by assigning someone in each office to solely doing timed deliveries. And bang goes DPDs only selling point!

so simple and easy but thats too simple for royal mail. royal mail simply dont want the busness it seems. otherwise they could take it

[Lincox]

As I have said previously, we only have a captain at the helm who knows how to reduce staff numbers. Her ability to increase sales is sadly lacking and her days will be numbered in favour of a more entrepreneurial admiral. If not the ship will sink fast.