MRM.COM : Coronavirus : The impact on postal services : We need to look at costs now

[POSTMAN]

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The covid-19 pandemic has had a growing impact on the global economy. In its latest assessment, the Organisation for Economic Co-operation and Development (OECD) has warned that the UK is likely to be the hardest hit by coronavirus among all the major economies.

The OECD has said that Britain’s economy is likely to slump by 11.5 per cent in 2020, just overtaking Germany, France, Spain and Italy. The Bank of England has forecast the UK economy will contract by an historic 30 per cent in the first half of 2020.

Driven by online shopping, UK parcel volumes are up 31 per cent, but UK-addressed letter volumes are down 33 per cent (308 million items). Revenue has fallen 23 per cent. Overall, UK revenue was down £22m in our April trading period alone.

‘The financial contribution from parcels is not the same as letters, which are in steep decline,’ said strategic insight manager, Val Walker. ‘We estimate for every one per cent of letter volume decline, we have to grow parcel volumes by over two per cent just to stand still.’

Marketing mail, which accounts for £1 in every £7 we earn from letters, has fallen considerably. The money we make in parcels is not making up for the falling letter volumes.

‘I appreciate colleagues will feel they are exceptionally busy with parcels, but the underlying impact of letter decline in our network is a significant impact on the business and something we need to continue to review’, said national service delivery director, Ricky McAulay.

‘We need to look at costs now, but importantly coming out of this pandemic, we need to see if we can accelerate our Journey 2024 strategy.’

Find out more in the next edition of Courier – landing at homes soon.

[Woody Guthrie]

How to use a lot of words to tell us we're screwed.
I can't wait for the union's version.

[antthepost]

I thought parcels are the future. If we have to deliver 2 1/2 times as many parcels as letters to make the same profit Royal mail better give us all 7.5ton lorries to deliver with and call us Parcelforce.

[IloveMYredTROLLEY!]

Here's a wild idea, the whole industry should charge more for delivering parcels while they are in demand.

And once non-essential businesses start opening up from next Monday in England, even though 200-300 have been reported dying most days this past week besides the weekend that have always had dodgy figures, there's bound to be an increase in marketing and other letters sent by them.

[sindba]

Translation:

Thanks for keeping the business afloat during a lethal pandemic. But the fat lazy millionaire shareholders and directors want to start coining it again off your backs, so here's more lapsing and some P45s.

Love,

Royal Mail.

[yubin282]

Translation:

Thanks for keeping the business afloat during a lethal pandemic. But the fat lazy millionaire shareholders and directors want to start coining it again off your backs, so here's more lapsing and some P45s.

Love,

Royal Mail.

I would take the p45 but lapsing....

[2yearpostie]

Confirmed by Rep recruitment freeze for the foreseeable future no matter how many people leave/retire.

[Cucumber]

How can they even think about trimming costs when social distancing and 1 person per van remains?
These 2 things cost man hours/money.

[A2B]

How can they even think about trimming costs when social distancing and 1 person per van remains?
These 2 things cost man hours/money.

It's a heads up try and soften the blow for unpopular changes in the near future.

[scoobydo79]

It won’t help the letters side of things when RM decide that they won’t deliver them on a Saturday for five weeks.

[Cucumber]

It won’t help the letters side of things when RM decide that they won’t deliver them on a Saturday for five weeks.

This last few months has been one huge data collection exercise for the business.

[wacko74]

Crazy. For years we've been told how we "lose money on every letter we deliver" and parcels are where the profit is.

Now they've completely changed that narrative and decided actually letters are these wonderful generators of profit whilst parcels are the devil's spawn.

[Grumpyoldmailman]

Confirmed by Rep recruitment freeze for the foreseeable future no matter how many people leave/retire.

That has been a thing unofficially for a while now, next step will be clocking in and out.

[GRS]

Crazy. For years we've been told how we "lose money on every letter we deliver" and parcels are where the profit is.

Now they've completely changed that narrative and decided actually letters are these wonderful generators of profit whilst parcels are the devil's spawn.

Bang on - you stole my thunder. For the last few years since Greene came in we were told letters were unprofitable and we needed to ‘manage their decline’ as parcels was where there was money to be made to sustain RM in the future. When you look at it everything RM has done over the last 10 years has involved chasing the competition to be like them so that we had the largest slice of the parcels pie. All of a sudden its’ parcels are s**t and unprofitable - its letters where there’s money to be made’. All this from the people who’ve chased the parcels dream all this time and manoeuvred us into this position of doom.

[A2B]

It won’t help the letters side of things when RM decide that they won’t deliver them on a Saturday for five weeks.

This last few months has been one huge data collection exercise for the business.

They already had most of the data but still posties up and down the country believe they can beat the system