Will Amazon deal save or doom UK's Royal Mail?

[TrueBlueTerrier]

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In a deal that could have long-term consequences for the future of express delivery in the UK, recently privatized postal carrier Royal Mail entered into a partnership with its largest competitor, Amazon, to join its new “click-and-collect” parcel service, called Local Collect.

Under the agreement, Amazon will gain access to the 10,500 post offices Royal Mail operates across the country, providing convenient, secure distribution points at which customers can pick up packages ordered online. The Local Collect service will be similar to UK-based CollectPlus, which delivers parcels to a network of convenience stores, newsstands, supermarkets, and gas stations.

The Royal Mail agreement will make it easier for Amazon to grow faster in the UK without incurring the added costs of last-mile delivery to customers’ doorsteps. And for Royal Mail, the benefits are… well, unclear at the moment. In November, Royal Mail reported that Amazon’s own parcel delivery network would reduce its annual growth rate from 4 to 5 percent annually to just 1 to 2 percent. While its share price was still trading above its IPO price from October 2013, Royal Mail saw its operating profit plunge 21 percent in the six months ending Sept. 28.

Amazon’s more rapid growth in Great Britain will most likely come at the continued expense of Royal Mail, which currently has less-convenient hours, is mandated to keep costs down and lags behind other click-and-collect services in IT and logistics services.

However, Martin George, chief commercial officer of the UK’s Post Office, said the Amazon agreement meshes well with its plan to modernize state-owned postal locations around the country. Today, about 2,000 post offices are now open on Sundays, while other postal stores are open an additional 85,000 hours each week, nationwide. -

[borders]

" And for Royal Mail, the benefits are… well, unclear at the moment ".
another leg up for one of our competitors ? , how far up the flag pole is the white flag now ? I think RM will be , in the not too distance future , be a pale shadow of its former self. Amazon is massive and will kick everybody's arse in time and RM just wants to be friends and hopes Amazon will toss them a few crumbs every now and then !

[wabbithunta]

Maybe their "rapid growth" is down to the government ignoring the tax they owe and also they'll poo their pants if Amazon upped sticks and left, and as a result they're now becoming the equivalent of the schoolyard bully that beats the crap out of people if he doesn't get his way.

[El-Bandito]

Thought that the deal was with the Post Office? Click and collect from local post offices? Nothing to do with the RMG.

[resperin]

Thought that the deal was with the Post Office? Click and collect from local post offices? Nothing to do with the RMG.

Parcels get delivered to the post office via Royal Mail for the click & collect.