Privatised Royal Mail will move faster into parcel market

[TrueBlueTerrier]

http://www.hsssearch.co.uk/page_357682.asp" onclick="window.open(this.href);return false;?

Logistics firm DX predicts Royal Mail’s proposed privitisation will accelerate the organisation’s move into the parcels market.

Privatised Royal Mail will move faster into parcel market
The Government recently announced plans to float Royal Mail on the stock exchange in the coming weeks.

The Communication Workers Union (CWU) opposes the move and will ballot its members on strike action in an attempt to scupper the deal.

As part of the deal around 150,000 Royal Mail employees will be eligible for Free Shares in the company.

If the strike goes ahead, DX has concerns about capacity in the run up to Christmas.

James Timberlake, head of marketing at DX said: "Capacity is limited in the goods fulfilment market - especially in the run up to Christmas. Historically, Royal Mail has often been the dumping ground for deliveries that could not be met by other carriers, so the Christmas period is likely to be much more challenging this year if the CWU chooses to strike.

In strategic terns, privitisation would make Royal Mail more agile and more responsive to market changes such as the massive recent growth in eCommerce.

Timberlake continued: "Royal Mail has made its intention to move more towards a goods fulfilment business delivering packets and parcels very clear and, with mail volumes declining, this strategy is vital for its future.

"At DX, we are obviously interested to see how privatisation will affect Royal Mail’s downstream access services, especially as the home-shopping market continues to seek cost-effective ways of delivering parcels to consumers. This change in the market shows that consumers have really begun to value having different delivery options to choose from, and are happy to pay for more secure and reliable services.

"Looking further ahead, it will also be interesting to see how the Royal Mail will walk the very difficult line between being a monopoly operator and a commercial enterprise.”

Royal Mail to consult on parcel re-classification
Royal Mail is consulting on a change to its parcels format to allow more items to be classed as Small Parcels.

This would make more parcels cheaper to send. For example, at the moment a small parcel up to 1kg, first class costs £4.10, as opposed to a Medium Parcel (up to 1kg, first class) which costs £6.75.

If the change is introduced it means over 80% of parcels delivered by Royal Mail will be classed as Small Parcels.

The proposed change would mean that parcels up to 350 x 250 x 160mm, which are currently classified as Medium Parcels, would also now be classed as a Small Parcel. This would cover postings up to the size of a large shoebox.

The change is being proposed in response to customer feedback, said Royal Mail, including from eBay merchants.

Nick Landon, managing director of Royal Mail Parcels, said: "The postal market is changing with the UK parcels market continuing to grow as consumers increasingly shop and sell online. Royal Mail is responding to these trends by updating its parcel services. We will consider further updates if customer feedback in the future indicates we should.”

The consultation will conclude on October 16 meaning the change could be introduced later in October.

[baldrick]

We were told at team briefings at the beginning of the year that Royal Mail was gearing up to be mainly a parcels carrier. One reason why anything bigger than a C4 letter was redefined as a parcel rather than a packet.