Royal Mail rivals may buy into Parcelforce

[TrueBlueTerrier]

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Royal Mail Group's rivals are likely to snap up parts of Parcelforce after the government confirmed it will be privatised.

A new Postal Services Bill will be introduced in the House of Commons by the end of the year, which could see the group split up and parts sold off.

Ivor Skinner, MD at APC Overnight, tells Commercial Motor: "We are not adverse to acquisitions, and as a company which has one of the largest courier depot coverages in the UK, we definitely see the sale of Parcelforce as an opportunity - as I expect our competitors will too."


In May, Parcelforce revealed that its turnover had remained static at £399m but operating profit had risen 41.7% to £17m (from £12m) during the 12 months to 31 March. However, Royal Mail continued to see a decline in letter volumes.

Independent postal economist Ian Senior says: "The fact that Parcelforce is profitable and has such a wide customer base is going to be attractive to many parcel carriers."

Yodel declined to comment on the sale, while Hermes, UK Mail and City Link were not available.

However, Senior adds: "I don't believe Royal Mail is a tempting prospect because of its increasing pension deficit and the fact that final-mile deliveries require a large amount of staff. This coupled with the fact the value and quantity of mail is declining is not attractive."


Last July, TNT formally withdrew from the process of forming a strategic partnership with Royal Mail. TNT says it has other priorities that include the intention to separate its mail and express businesses in 2011.

Senior believes industrial action by the Communication Workers Union is inevitable as and when privatisation progresses: "This will only weaken the public's confidence in Royal Mail, pushing its turnover down more, and forcing them to look for alternatives."

A Royal Mail spokesman says: "While we're getting on with modernising the company as fast as our capital permits, Royal Mail needs a way of getting access to capital, a resolution of the legacy £10.3bn pension deficit."

He says "a strikingly different regulatory approach" is needed for Royal Mail to "compete fairly in an increasingly tough and shrinking market" .

[hubbahubba]

you watch em all fighting over the bones of whats left of a "public service",bloody disgrace what they are doing to RM group.It all started with DSA and wont stop til theres bugger all left of any value,god help us all................

[DGP1]

Parcelforce (and GLS) is what they really want and to a lesser extent they want the MC network but they really don't want anything to do with the deliveries (they will take them but they'll try their best to offload what they class as 'not profitable' as soon as they can).

[norbert]

correct !

[POSTMAN]

Crozier had a tear up last year with TNT over the GLS thing.
How times change.

[axeman]

it'll be a sound investment with the 1.2 billion loan around the neck of royal fail and the pension figgures i'm sure the financial constraints of many companies will be a tad concerned at large figgures like that leaching from the profit margins

[webtrekker]

Being a Hermes courier myself, I am very surprised that the likes of Royal Mail have not disputed the 'lifestyle courier' business model used by the likes of Hermes.

We are all classed as 'Self Employed' yet seem to enjoy very few of the privileges afforded truly self employed people. We receive a non-negotiable parcel rate of 45p and are controlled by Hermes, hardly self employment. Many of us have rebelled against this and have tried to change the situation including being recognised by USDAW (Hermes' only recognised union) and reporting Hermes to HMRC for official investigation as we don't think we are truly self employed and should have, at least, Worker Status, meaning we should be entitled to the provisions of the National Minimum Wage Act (ie. NMW, holiday pay, sickness benefit,maternity leave etc...).

This business model shouldn't be (and in our opinion ISN'T) legal. No wonder you are all going to lose work and jobs when you are being undercut by companies with virtually NO overheads!



webtrekker

[norbert]

TNT Holland ( which RM model themselves on ) are trying the piece rate number on ....all race to the bottom and fat cats ?

I've worked piece rate for an agency ....you had to work like a manic robot otherwise you'd go down to £1-2 p.h. ....I worked the same job on NMW ...literally everything was more relaxed ....the Tories tried to stop NMW etc ....even went to the Labour Party meeting when Ian McCartney was the speaker on the Social Chapter .

[fishtank]

TNT Holland ( which RM model themselves on ) are trying the piece rate number on ....all race to the bottom and fat cats ?

What better way to deal with declining mail volumes than tie your wages to it.
It's win/win for the employer....tough s**t for the employee.