RM eyes Sunday deliveries as internet boosts prospects

[TrueBlueTerrier]

Royal Mail eyes Sunday deliveries as internet boosts prospects

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Royal Mail is preparing a move to seven-day-a-week deliveries after privatisation, driven by customer demand for convenient delivery times in the age of amazon and ebay.

Extending delivery of letters and parcels to Sundays would achieve the opposite of what opponents of privatisation fear – that the sell-off could put at risk the six-day-a-week “universal service” that delivers mail at a uniform price to any UK address.

Ministers plan to begin privatisation of the world’s oldest postal service, probably through a stock market flotation this autumn.

They aim to sell the majority of the company, which is thought to be worth up to £3bn. If market conditions remain buoyant they could try to sell all of it in one go, apart from the 10 per cent of shares promised to staff.

A fallback option would be sale of a stake to a financial investor, if the market for initial public offerings dries up.

No timetable has been set for deciding on seven-day deliveries, but Moya Greene, chief executive, favours the idea, according to industry insiders. Several parcel competitors already offer this service.

A template is already available because Royal Mail ran seven-day deliveries last December in the approach to Christmas.
Costs would not necessarily be raised because shifts could be restructured across the week. It would help to protect jobs for Royal Mail’s 150,000 staff, after thousands of job losses over the past decade.

The fact that Royal Mail is considering such a move underlines how fast the growth of internet shopping is helping to turn round its fortunes. Until recently, the fear had been that deliveries could shrink to five days a week.

Daily letter volumes have fallen from 84m to 58m since 2006 as people have moved to email and social media, but rising parcel revenues helped Royal Mail increase pre-tax profit by 60 per cent to £324m in the year to March 31.

Royal Mail’s volume share of the fragmented consumer parcels market is thought to have grown from 33 per cent two years ago to 35 per cent. Its main competitors include Yodel, City Link, DPD, Hermes and UPS.

The industry has suffered from overcapacity, leading to losses at some operators, but some are gearing up for expansion.

DPD, a UK subsidiary of France’s La Poste, is spending £175m over five years to expand its parcel delivery capacity, creating 1,500 jobs. Royal Mail is spending £75m over four years to expand its Parcelforce business.

Newer rivals include CollectPlus, a joint venture between PayPoint and Yodel, through which customers can collect parcels from 5,000 convenience stores. Royal Mail and the Post Office are launching their own “click and collect” service in post offices later this year.
After privatisation, Royal Mail will use its new freedom to borrow commercially because it needs to spend hundreds of millions of pounds to update antiquated technology. Insiders say the company is still 15 years behind Germany’s Deutsche Post, a market leader in terms of efficiency.

Royal Mail plans to upgrade Parcelforce’s 10-year-old tracking technology and spread it across the network. It also intends to introduce “intelligent bar codes” so it can monitor all the mail it handles.

At present, a paper-based system gives rise to inaccuracies, meaning rivals underpay it for the presorted mail it delivers on their behalf.

Privatisation proceeds are likely to go to the Treasury, though Ms Greene has been pressing for Royal Mail to receive part of them.
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Royal Mail is set to seek a court injunction against the Communication Workers Union if the union goes ahead with a threatened boycott of deliveries of rival companies’ mail.

The CWU, which represents 120,000 of Royal Mail’s 150,000 staff, is holding a consultative ballot, with the result due next Wednesday. The union has indicated that if, as expected, the result is a “yes”, it will set an early date to begin a boycott without a formal industrial action ballot.

Royal Mail takes a fee for delivering presorted mail on behalf of companies such as TNT Post and UK Mail, which now accounts for nearly half the nation’s mail. The CWU says rival companies are competing unfairly by “cherry-picking” profitable bulk mail contracts, undermining pay and jobs.

Royal Mail believes the action would be unlawful and is prepared to act to protect its business, even though this would damage relations with the union.

[Lounge Lizard]

"Costs would not necessarily be raised because shifts could be restructured across the week."
Now we all moan about working Saturdays. After privatisation we will all moan all the more about working Saturdays and Sundays.

[fmrPOSTIE]

For those that thought privatisation meant a move to a 5-day delivery think again ! More work for the same money !

[fishtank]

There is something in this as the Company Secretary Jon Millidge was questioned at a recent forum over reducing the service after privatisation and his answer was the business would like to move to a 7 day service,not reduce the number of days.
How it would play out and how you could protect a predominantly full time workforce over seven days is another thing.

[eric the viking]

If every sector of service and retail in this country work on Sunday for the convenience of the Public who is actually left at home to benefit?

[bensonhedge]

1 extra day to do your d2d......nice

[TrueBlueTerrier]

If every sector of service and retail in this country work on Sunday for the convenience of the Public who is actually left at home to benefit?

Ah but its not for the public, community or to improve service levels is it, its an extra opportunity to make profit and make money for shareholders and bonus bandits.

[steven100]

I'm out if this was to happen.

[falkor]

How it would play out and how you could protect a predominantly full time workforce over seven days is another thing

.

This is presuming that RM want a predominantly full time work force, I don't believe they do.
I believe after privatisation there will be mass Voluntary Redundancies followed by re-employment of staff on zero hour contracts especially in mail centres and deliveries.

RM and the union have an agreement regarding the percentage of full time and part time staff but does anybody really expect RM to honour this or any other agreement with the Cwu, Imo any agreements made in the current climate are just stalling tactics until RM have weakened the union to the point were they can do what they wish when they wish.

[andy g]

well not long to wait before the ballot result,this will give a indication of how strong the union is!!OK its not an industrial action ballot but a massive yes vote will go a long way to strengthen the unions position.

[Tman]

Ah but its not for the public, community or to improve service levels is it, its an extra opportunity to make profit and make money for shareholders and bonus bandits.

So how would seven days a week deliveries increase profits or make money for "bonus bandits" (whoever they may be?)

The same number of parcels delivered over 7 days rather than 6 would mean less profit on each one, unless you think people will post something they otherwise wouldn't have specifically because it can be delivered on a Sunday?

[fishtank]

The same number of parcels delivered over 7 days rather than 6 would mean less profit on each one.

That would depend on the resourcing model.

Moving both parcels and letters to a seven day service would allow Royal Mail the ability to reduce the indoor element in delivery offices and increase the size therefore reducing the number of outdoor deliveries.

It could mean the introduction of the part-time delivery model either way Royal Mail is not a charity or even much of a public service anymore,it is primarily a business so if they are considering it there must be at least a long term strategy to grow more business from it and increase profits.

[Tman]

That would depend on the resourcing model.
Moving both parcels and letters to a seven day service would allow Royal Mail the ability to reduce the indoor element in delivery offices and increase the size therefore reducing the number of outdoor deliveries.

What??

so if they are considering it there must be at least a long term strategy to grow more business from it and increase profits.

Maybe the thinking is that offering a more flexible service will increase profits through a greater market share?

[fishtank]

That would depend on the resourcing model.
Moving both parcels and letters to a seven day service would allow Royal Mail the ability to reduce the indoor element in delivery offices and increase the size therefore reducing the number of outdoor deliveries.

What??

More days....less mail per day.
Less mail per day...less indoor work per day.
Less indoor work....more time for outdoor work.
More time for outdoor work.....bigger deliveries.
Bigger deliveries....less deliveries.

It's not rocket science/brain surgery/mechanical engineering.

Maybe the thinking is that offering a more flexible service will increase profits through a greater market share?

That would be my guess too and then you're left with the pointless argument of whether it's a profit driven decision that improves customer experience or a customer service driven decision that improves profits.
Does it matter?

[UnhappyGremlin]

There are very few people and even less businesses that would want mail on a Sunday.
Most people are out and about on the weekend, most businesses are shut, with the exception of retail and the likes.
What proportion of people would be in to accept parcels, especially in the summer?

RM have spent years cutting back to the bone the service we deliver, I find it weird this story is out now, just prior to privatisation. Suspicious to say the least.

That said, I think if it was done in the right way, it may be of benefit to some. It could maintain FT jobs for one.
If we weren't placed on supermarket style contracts, i.e. 5 over 7, but were offered beneficial attendance patterns, it may be voted for.
If we moved to say 4 days on, 4 days off (9.45 per day), maybe we'd consider it.
But we know they wouldn't do this type of thing. We'd probably end up working at least one weekend day per week, every week without fail, and sometimes both days.
Can't say many would be interested in it, especially in the manner RM would undoubtedly go about it.