Parcels not making up for fall in letters

[RobertT]

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Parcels not making up for fall in letters

Addressed letter volumes (excluding election mailings) down 6%*
Money we earn from total letters down 5%
UK parcel volumes up 3%, driven by continued growth in Royal Mail account parcels
Money we earn from UK parcels up 3% in a competitive trading environment
GLS volumes up 9%, with revenue growth in almost all its markets
For three years in a row, the money we earn from parcels in the UK has not made up for the fall in the money we make from letters.

UK parcels

We have maintained our leading position in UK parcels, delivering more parcels than all our competitors combined.

But there is significant spare capacity in the market and competition is intense. A number of competitors, the lifestyle couriers, have lower cost labour models and can price more cheaply than we can.

We are doing many things to stay ahead of the competition. Improvements and initiatives we have launched include:

Around two-thirds of our parcels are now barcoded and one third can be tracked in some way
We can offer any retail account customer a tracked service
We have improved our international services
We strengthened GLS’s network and extended the service offering in Spain
Letters

Business uncertainty and e-substitution have impacted the money we make on marketing and business letters in particular. Letters still account for 56% of our UK revenue.

Exceeded both our First and Second Class mail targets
Winning business, including new contracts to provide postal services for all London boroughs and Scottish public bodies
Improving our mail handling and co-ordinating industry-wide response to tackling scam mail.
Rolling out collaborative projects with the advertising industry to promote value of mail