Printweek - Royal Mail: parcels boom, letters tank

Letter volumes were down by almost 800m items during the three months to the end of June, according to the latest update from Royal Mail.

The postal operator is proving quarterly updates during the Covid-19 pandemic.

In the period from 30 March to 28 June, addressed letter volumes slumped by 33% – or 788m letters – as advertising mail continued to be to be impacted by the state of the economy and low levels of business activity.

However, parcel volumes boomed as a result of increased e-commerce activity as consumers turned to online shopping during lockdown.

Royal Mail said that parcel volumes were up 38% year-on-year, the equivalent of 117m extra parcels.

Domestic parcel volumes, excluding Amazon, were up 64%.

Volumes at European parcels wing GLS were up 22% year-on-year.

“As the UK starts to come out of lockdown we are not seeing any change as yet in customer behaviour. Our customers are wanting more parcels delivered to their homes and are sending fewer letters. We are working as quickly as we can to adapt our business to meet our customer needs,” Royal Mail said.

It also said that talks with the CWU were “progressing” and that the major cost reduction plans announced in June, including the integration of Parcel Force into Royal Mail and huge reduction in managerial posts aimed at saving £400m were underway.

Royal Mail and the CWU have agreed a programme of talks aimed at resolving their current dispute.

The group has also been fined £1.5m by Ofcom for missing its delivery targets in 2018/19. Royal Mail is required by Ofcom to deliver at least 93% of first-class post – across the UK – within one working day of collection. In 2018/19, 91.5% of first-class post was delivered on time.

Ofcom also fined Royal Mail a further £100,000 for an error that resulted in customers being overcharged for second-class stamps between 25 March and 31 March last year.

Royal Mail said it was “disappointed” with its first class service performance during the period, and said: “We accept and understand Ofcom’s decision.”

The group also held its hands up over the stamp mix-up: “We made a mistake. Due to an error on our part, our price for second class stamps was 1p above the requisite regulatory cap for seven days. At the time, we sought to put this error right by publicly acknowledging our mistake.

“We also donated the revenue that we expected to make from this error - £60,000 – to our chosen charity Action for Children which helps young people at risk of developing mental health problems. We worked with Ofcom throughout this investigation and lessons have been learned by us during this process.”

Ofcom will take into account the operational difficulties caused by the coronavirus pandemic when assessing Royal Mail’s 2019/20 performance stats.

Separately, Royal Mail and Irish postal service An Post have collaborated on a postmark for the first time to commemorate the life of English World Cup winning footballer and Republic of Ireland manager Jack Charlton.