Green with envy? Irish eye lessons of Royal Mail Success

[TrueBlueTerrier]

http://postandparcel.info/56005/in-dept ... l-success/" onclick="window.open(this.href);return false;

NightLine CEO John Tuohy gives his take on the Royal Mail profit announcement

There are few postal operators who will not feel a tinge of jealousy glancing over coverage of Royal Mail’s latest annual results

The e-commerce boom has had a truly explosive effect on its turnover – helping to double profits – while modernisation of its operations has improved margins too, making it a far more robust business than it had been before Moya Greene became its Chief Executive.

Given Royal Mail’s troubled recent past, such a performance will rightly be regarded with something approaching awe in the UK. I believe that it also provides a very useful lesson for an Irish postal industry on how it can capitalise on the potential represented by the liberalisation which took effect at the start of 2011.

There has been much discussion since about how best the national operator, An Post, can work in the same market as private firms for the benefit of residential and business customers.

Against the backdrop of a continuing decline in mail volumes and with warnings from some commentators about the viability of current delivery schedules, the debate has acquired a particular urgency.

Royal Mail, of course, had embarked on liberalisation back in 2006. It took the strategic decision to concentrate its efforts on the “final mile” of the postal journey, providing other operators with the ability to inject their mail into the existing delivery infrastructure.

As a consequence, some 44 per cent of mail is now collected and sorted by the private sector but 98 per cent is still delivered by Royal Mail, thereby helping sustain local postal routes and maintain a delivery schedule over six days of the week which is admired around the world.

In addition, it has identified areas of future growth, such as e-commerce, and subtly re-configured its business processes to be even better-run.

There are, of course, differences in scale between the UK and the Republic of Ireland. Royal Mail covers 29 million addresses, more than 10 times the number present in Ireland.

Such a network is aided by having a postcode system which allows the sort of targeted deliveries relied on by Direct Mail firms. Only last November, Royal Mail revealed that DM accounted for nearly half of all its postal volumes and, with it, a chunk of income.

Of course, postcodes are not merely there to support marketeers. They help make mail and parcel deliveries more efficient, something which is of critical concern in Ireland, which has a high proportion of rural addresses and a desire shared with Royal Mail to cash in on the popularity of internet shopping.

In my opinion, Royal Mail is to be admired for even more than its latest set of figures. It presents far greater value as an exemplar for those who have travelled less distance on the path of liberalisation.

For strategic thinking, successful engagement with private industry and attempting to generate new areas of growth while retaining a core strength in the “final mile”, it provides Ireland with an inspirational near neighbour and – perhaps – a vision of the sort of future we too can deliver for ourselves.

John Tuohy will be speaking at next months Mail & Express Delivery Show which will take place 25th June at the Royal College of Surgeons and is hosted by Royal Mail.