Royal Mail peak period saw a 10% uplift in parcel handling

By Sasha Fedorenko January 29, 2019 - 5:35 pm

Royal Mail peak period experienced a 10% uplift in parcel handling, with 164m of parcels handled by the supplier during December. The supplier announced today their trading update covering the months ending on 23 December 2018.

Royal Mail say that in nine months, parcel volumes and revenues saw a 6% increase on an underlying basis.

The supplier’s UK parcel volumes, excluding Amazon, experienced an 8% growth as a result of their focus on the fast-growing clothing and footwear sectors of the ecommerce market.

International parcels have also seen a continues growth. However, Royal Mail experienced a lower import parcel volume growth, excluding cross-border, as a result of increased import rates.

When it comes to the supplier’s key commerce products delivered via Royal Mail 24®/48® and Tracked Returns®, Royal Mail reports their growth of 24%.

Overall, addressed letter volumes saw a decline of 8% on an underlying basis. The supplier explains the fall of growth due to the continuing impact of the General Data Protection Regulation (GDPR). A relatively strong prior year comparative period benefitting from financial sector mailings also adds to the equation.

To prepare for the 2018 peak season, Royal Mail recruited 23k seasonal workers and opened six temporary parcel sorting centres to make sure they had the capacity to handle the high volumes of parcels and cards through their network.

“Overall, our recent trading performance was broadly in line with our expectations. We now confirm that we expect to deliver adjusted Group operating profit before transformation costs of £500-530m for 2018- 19. In the UK, our parcels business continued to perform well, with volumes and revenue in the nine months both up 6%. Addressed letter volumes, excluding the impact of elections, were down 8%, with total letter revenue down 6%, largely reflecting the continuing impact of GDPR and a relatively strong prior year comparative period. Due to our letters performance to date, we expect addressed letter volume declines, excluding elections, to be in the range of 7-8% for 2018-19. While the rate of e-substitution remains in line with our expectations, business uncertainty is impacting letter volumes. As a result, addressed letter volume declines, excluding elections, are likely to be outside our forecast medium-term range next year. Otherwise, we are reconfirming the outlook and other guidance for 2018-19 provided in our half-year results..
-Royal Mail

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