Yeah, parcels make money whereas letters lose money.
Letters don’t lose money ( that is the myth they want to sell to prioritise parcels )
They make a profit
IIRC (because I can't find the statement on here which I've quoted before), for every 1% loss of letter volume the company has to grow packet volumes by 2% to stand still. Which is to say, like-for-like packets lose money.
Letters are extremely easy to sort, transport, and far easier to deliver in volume; all of which makes them relatively cheap. I would need zero bag refills to clear a walk but with packets I need to do it in eight loops because every bag is rammed. Packets are a millstone, it's just that they're all that's going up.
Yeah, parcels make money whereas letters lose money.
Letters don’t lose money ( that is the myth they want to sell to prioritise parcels )
They make a profit
IIRC (because I can't find the statement on here which I've quoted before), for every 1% loss of letter volume the company has to grow packet volumes by 2% to stand still. Which is to say, like-for-like packets lose money.
Letters are extremely easy to sort, transport, and far easier to deliver in volume; all of which makes them relatively cheap. I would need zero bag refills to clear a walk but with packets I need to do it in eight loops because every bag is rammed. Packets are a millstone, it's just that they're all that's going up.
If you are on a regular duty can you not see the reduction in letters each year?
A tray of 200 letters will yield no where near £200 worth of business to RM. They literally get pennies per item for 'junk mail' and bulk posting items from banks/clothing companies/clubcard statements etc. Which is what the majority of items are in a tray of 200 items. However, if it was a tray of 200 stamped first class letters at £1.70 a pop, then kerching...
Outside of Xmas card season you'd probably be lucky if a dozen walks had 200 stamped items between them.
Xmas cards have dropped off massively over the years. At one time a MC would be running Xmas cards through the machines all night on their outward sort plans. Now they probably only run their outward sort plans for a couple of hours, if that before switching over to their inward sort plans.
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It's hard to determine how much profit we actually make on either letters or parcels alone because the business is not really structured that way. The overall revenue on letters has increased mainly due to the price increases and in spite of falling overall mail volumes there are many other aspects which indicate that letters are still profitable to the business.
Apart from bigger duties it's not been lost on anyone that many posties are often walking in to 2+ days worth of mail. Whilst we might not be able to save the proposed annual cost savings by Ofcom of £250-£400 under USO reform, I would expect the business to be saving something by not getting letters delivered on a daily basis. The business won't give up letters when they know how much more profitable it can be doing this and they will use overall mail decline as the excuse.
On top of that, even though we are now delivering more parcels than ever before, it is extremely competitive and customers (especially the large retailers) negotiate very tight margins so we might not actually be making as much profit on them even when parcel revenues have increased. It is quite plausible that letters actually carry better per-item margins than parcels do even if parcel revenues are larger.
On the face of it, shareholder value is the dumbest idea in the world.
We've also lost staff who haven't been replaced, some on legacy contracts, everybody now seems to be working flat out each day, if RM aren't making decent profits then I've no idea how Amazon or Evri manage it!
I would need zero bag refills to clear a walk but with packets I need to do it in eight loops because every bag is rammed.
If you are on a regular duty can you not see the reduction in letters each year?
Yes, that's why I stated the above. I can testify it's possible, a feat which (barring exceptionally light days) hadn't been true since the first pouch boxes were installed in the late 80s.