Royal Mail predictions: 7-day parcels, 5-day letters, GLS sold off

Royal Mail predictions Will Royal Mail be broken up and sell GLS

With news out ahead of Royal Mail’s AGM today, it looks like many of our previous tentative Royal Mail predictions are likely to come true. Certainly they’re looking a lot more likely with every day that passes.

Royal Mail announced that parcel volumes are up 34% (177 million more parcels) and parcel revenue up 33.1% year on year. However, addressed letter volumes (ex. elections) is down 28% (1.1 billion fewer letters) with letter revenue down 21.5%.

The problem is that delivering parcels costs more and the mix shift from handling more parcels and fewer letters increased costs in the period by £85 million. On top of that, costs related to COVID-19 (elevated absence, social distancing, additional protective equipment and other costs) were £75 million in the first five months.

Even with people costs being reduced by slashing management and other savings, Royal Mail are confident that they will make a material loss this financial year 2020-21 and will not become profitable without substantial business change.

With all this in mind, Royal Mail say that they are considering three main objectives:

  1. Retain the USO (Same price to deliver across the UK)
  2. Consider demand for a seven day a week parcel service
  3. Retain a next day letters service during the business week

“These findings tell us that the best way to ensure the Universal Service continues to meet our customers’ needs is to rebalance our service model more towards the growing parcels market, particularly urgent parcels and urgent letters. We are currently exploring what a rebalanced Universal Service might look like. We remain committed to the universal, affordable “one price goes anywhere” nature of the USO, but we would like to deliver the items that customers want more often, not less. To do that we need a regulatory system fit for the future rather than the past.”
– Royal Mail

Royal Mail Predictions – What it means for you

I know more than a few online retailers who would rejoice at the thought of parcels being delivered seven days a week but there’s a kicker on the letters side with the hint that Saturday letter deliveries could be dropped. Frankly I don’t know too many people that would cry if their credit card bill was delayed until Monday if it meant their online purchases arrived on Saturdays and Sundays.

Royal Mail are also facing a deeper crisis and that’s a break up with the most likely outcome being to spin off the profitable GLS arm. Recently Czech billionaire Daniel Kretinsky, through his Vesa Equity Investment SARL business, upped his stake in Royal Mail to become their biggest shareholder (approx 13.1%). It’s thought that he could be interested in seeing GLS spun off and with his shareholding he’s got a decent influence on any such decision.

This is all pretty much going down the route we predicted back in June when we mooted a potential sale of GLS and revamped USO, so there are no real surprises. The news and hints from reading between the lines today are just an indication that things are bubbling away in the background and the only real question is how long it will take for, what looks like, the inevitable to happen.

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Nice... parcels revenue up by 33%. and what about our 100's of claims for LOST items sent using Tracked48/24 ???!!! Some the our claims are now past their "we will reply within 30 working days". 30 working days is too long - it's 6 weeks FFS. Why does it take 6 weeks to establish and accept that parcels was lost... as shown by tracking that had paused/technical error/etc ???? And what, am I expected to cover the loss? or expected to send some of these claims again? this system is terribly broken. On a positive note (sic!) they (RM) has not "lost" a single parcel in the whole month of June. Success !

NorthCrystal • 8th September 2020 •

Royal mail 48 can take 7-8 working days sometimes but I dont have alot of mail loss which is good. Royal mail need to stop delivering parcels from China for more or less nothing, the volumes are huge and it's a massive loss. Mail Prices are already quite high and with 'free postage' plus huge market place costs ontop of that , VAT in a marketplace where foriegn sellers are skipping some of those but getting VAT free market place costs as well as selling fake or low quality goods promoted by fake reviews has become a toxic mix for sellers that are doing the right thing.

Ifellow • 9th September 2020 •

Seems these days your expected just to suck up ,loss, non delivery , Fraud, etc as a cost of doing business

Victor • 9th September 2020 •

we really hope royal mail get it right because the alternative of my hermes is horrendous

victor • 9th September 2020 •

Agreed, Hermes has a purpose but it isn't 100 percent of your parcels 100 per cent of the time. Personal opinion of course.

Ifellow • 10th September 2020 •

RM should offer 5kg 50x50x50cm option for a £5 and they'll kill competition :D

Robin • 9th September 2020 •

I have only had one claim in the past year, a large letter to the USA, and the RM paid up immediately (within a few days) on a non-tracked service. Cannot say fairer than that. But in the UK I am increasingly finding people do not know where they live, or what the address should actually be, so I check each one.....which can be time consuming. But i have had wrong postcodes given to me, wrong counties (not that counties are necessary anymore), made up town names (people want to elevate an area they live in and not use the actual town name), and no one likes the word Flat.......why not, you live in a flat. Some of this may well explain the losses mentioned, also parcels left in good faith in blocks of flats and people lifting them.....not all are good neighbours. But on balance when you look at the volumes, the % loss / missing parcels is very very small.

Dave • 9th September 2020 •

after this feedback "This item and seller are exemplary. The courier - Hermes were appalling." were glad we kept our RM contract

victor • 9th September 2020 •

When i saw 7 days i immediately thought that was their new 2nd class delivery estimate, but then i realised that it couldn't be as up to 10 days should be the figure. Yes i know most get there on time, but out levels of late deliveries this year has been horrendous. I don't mean a day or two late... I mean 7 to 12 days late, even 1st class. Most buyers are happy to wait an extra few days.... but over 7 working days? No chance, it is refund or resend. RM just aren't interested in our missing items. Every single parcel has our return address on the ppi label and on the back of the parcel, yet out missing parcel returns rate is just a trickle. Now maybe there are alot of fraudulant cases ( i have to agree here), but that still leaves alot of lost items. We send out several thousand items each month and it is a complete nightmare with a daily list of where is my item enquires. In the summer we were spending around 2 to 3 hours a day just replying to buyers and organising resends etc for missing / late items. Over all it is a sad reflection that RM are simply still stuck in the past, several years behind others and all they offer is excuses and price hikes. The pandemic was unexpected, but RMs issues with being stuck ina letters world, goes back many years. If it weren't for the unversal service etc, they would be hung out to dry by the business world.

Toby • 9th September 2020 •

the "record" here's 21 calendar days for RM24 large letter !! Is this 1980's once again? the whole idea of "delivery confirmation" is a big joke anyway. quite recently the RM tracking website shown the GPS location - what happened there it's no longer displayed...?

NorthCrystal • 9th September 2020 •

The "record" here is 6 weeks for a large letter. Mind you, to be absolutely fair to Royal Mail, that was on RM48, and not a speedy RM24 like yours.

Gav • 9th September 2020 •

@Gav the rm48 is currently such a farce that I don't even count the days for its lateness. we're actually not using rm48 atm and posting all those using the rm24 as our eBay account got towards 3% for late delivery. oops. I come to conclusion it might cost more because of the speedier delivery than we will save from eBay for being top-rated seller. buyers love it though!

NorthCrystal • 10th September 2020 •

During the worst of the pandemic, RM were prioritising SD and 1st class because they just didnt have the staff to deliver everything. This was no secret, there were pictures circulating of 1000s of 2nd class trollies in warehouses. So any business sending 2nd/48 during that period was bound to get hit, and should have upgraded to 1st. I said exactly this to every customer in my Post Office, but the overwhelming response was "well, as long as its gone....." No skin off my nose, I work for PO, not RM, but very short sighted business practice IMHO

Andrew • 10th September 2020 •

"Frankly I don’t know too many people that would cry if their credit card bill was delayed until Monday if it meant their online purchases arrived on Saturdays and Sundays." YEAH who actually gets a credit card paper statement in 2020. It does effect the thousands of ebay sellers who need large letter as it is about the only affordable option. Your going to have to change a lot of working practices at RMG to get a 7 day service and I would think that is along way off.

SAM • 9th September 2020 •

I want a paper credit card statement. You may not.

Jean • 11th September 2020 •

Royal Mail's new price leaflet for Sept 1st has tons of errors. Here is one example 250g Small parcel Tracked and signed to Europe is £11.55 according to RM online price calculator but the new leaflet says it's £9.80 Try calling them RM and the phone is constantly engaged. Does anyone know where I can find the correct pricing so I can update my website?

Jack • 9th September 2020 •

Thanks you for reviewing our 1st Sept prices. We have checked all the literature and online price calculators and can confirm all the prices are correct as published. We always quality check these documents before publication. If there is an error please could you let us know specifically where you found them and we will correct any errors .

James • 10th September 2020 •

Wow they have time to sit and calculate the numbers yet somehow cant employ people that read or do the job properly. A parcel sent tracked for France saying delivered but in Los Angeles. Parcels in the Uk taking anywhere from 8 to 17 days to arrive or not arriving at all. Tracking says delivered but nothing more. So customer asks us where was it left as if we were watching him at their house. Custoemr service just rolling out the usual spiel of Covid 19 and the oh he must have run out of cards to leave. We have parcels showing delivered then customer service tell us the GPS shows it was at the customers house when scanned, so we send another and the customer then rings us 4 days later to say the postman has brought two parcels now. So was the scanner defective on the first scan or was the satellite broken the first time or was the customer service lying to me. You can guess. then we recently lost our prime badge due to late shipping and we showed all parcels we collected every day at 3pm by our postman but were not getting ascan until the following day or sometimes 2 days at Sheffield just 63 miles up the road I could walk it there quicker. But you get no refund of the payments you make when their system fails.

Mark • 9th September 2020 •

@ Mark, i empathise with all your issues above. My clients are experiencing the same thing with Royal Mail. On speaking with postman apparently the GPS location of a scan can be "fiddled". Royal Mail seem to be scanning the items as delivered to assist with THEIR metrics - when they actuall still have the item in the delivery office. The items is then properly delivered days later. The next day acceptance scans have always been a problem. ebay are expecting a same day scan of tracked mail when in fact the scan often happens next day (which gives the seller a defect) . Normally the defect is then canceled out by the parcel arriving on time but that is not happening in many cases at the moment. Many sellers have lost their badges over this and the problem has existed long before the pandemic - it is only more apparent now. Its particularly a problem with Tracked 48 mail which is supposed to be scanned next day according to their contract! errrrr......... RM could you inform ebay of this? ebay are looking for an acceptance scan SAME DAY. There are "black" spots in the UK where the delivery offices must be struggling and have a backlog. remember Royal Mail work a first in last out regarding backlogs. I too have seen items take over 2 weeks to arrive. If only Royal Mail were organised enough to present this to ebay I am sure ebay would have offered extended protection. However good old RM seem to be in denial that it is happening.

Alan Paterson • 9th September 2020 •

"GPS location of a scan can be “fiddled”. Royal Mail seem to be scanning the items as delivered to assist with THEIR metrics – when they actually still have the item in the delivery office. The items is then properly delivered days later" I've also had this, multiple times. Mostly it is indeed a 1 or 2 day delay, but in one case, both items (original and replacement) turned up together, 3 weeks after the original was scanned as delivered. This particular buyer had CCTV, so he knew full well that postie hadn't been when it was scanned at the "correct address". Most buyers don't though and tend to think the seller is to blame, but I think more of them are starting to realise that's not the case. Anyone doing this GPS fiddle, or instructing others to do it, should be sacked.

Gav • 9th September 2020 •

So you're saying that RM has time to scan the mail at DO and then they have no working power to distribute it (on time)??? Sounds like bad management, oh wait... it's RM. I have waited recently 6 weeks for business collection address change. Yes, 6 weeks like I've got such flexible business leases that we can hang around for ages.

NorthCrystal • 10th September 2020 •

I hope eBay, Amazon and other online markets quickly remove Saturdays as a delivery day for letters/large letters and small packets. I can see many sellers receiving late delivery defects if the delivery periods are not adjusted on time. It could take a while for customers to realise that RM no longer delivers letter packets on a Saturday which could still result in negative comments from customers expecting deliveries.

Carl • 9th September 2020 •

Sept 1st 2020 postal hikes for 500g SMALL PARCEL according to the new online PDF EUROPE COSTS MORE FOR TRACKED 11.55 Tracked & Signed 13.86 Tracked USA COSTS MORE FOR SIGNED £18.68 Tracked & Signed £16.68 Tracked STANDARD NOW ONLY £1.50 LESS THAN TRACKED AND £3.50 LESS THAN TRACKED & SIGNED £15.18 Standard RM are doing a grand job of destroying overseas trade.

Jack • 9th September 2020 •

Add to that, yet more extortionate price hikes?

Andrew Nelson • 10th September 2020 •

Yet another failed privatisation delivering higher prices but not much else.

Andy • 10th September 2020 •

All tracked 24 and 48 have to be scanned at every office they go into including the local delivery office. As well as at the door step. The backlog that has been seen in some areas was massive i dont mean a few hundred parcels i mean thousands possibly 10s of place i visited had 10 artic trailers of mail waiting to be sorted on a daily bases and they couldnt get more staff into the building to sort due to social distancing in the building. I believe but am not sure but price increases to foreign countrys are being driven by what the foreign countrys charge royal mail.i had a letter/small packet from the USA postage was $14.50 it had one promo game card in it. The uk regulator needs to make sure pricing is fair across the board,but i hear royal mail isnt allowed to under cut other delivery companys prices unless they was already cheaper. And if companys like TNT,secure mail have mail they cant deliver it gets delivered by royal mail and they get paid by the other companies less than it cost to deliver

john blackthorn • 10th September 2020 •

I haven't come across this anywhere and can't see anyone discussing it but does everyone know that Royal Mail are increasing the price of their CRL products from 5th October? 80p a large letter now. I'm kind of dumbfounded by this price increase as Royal Mail are busier than ever with more revenue coming in, so the solution is to... increase prices.....

Paul • 11th September 2020 •

I'm a postman, at the moment there are so many problems with the company it's hard to know where to start. I love my job, when it works effectively its great, such a great job but currently it's just failing!! Most of our revenue is through letters, so even through lockdown the increase in parcels didn't help the reduction in letters. We didn't have enough staff to process and deliver the increase in parcels. We can't compete with courier companies, we aren't a courier company- we are postmen/women walking with letters and trying to clear parcels at the same time. It's such a different job when delivering parcels only in a van. Our delivery office is short by 18 full time positions however the next round of full-time positions that will become available, the company are only allowing us to employ (move from pt to ft) 4! We feel desperate, letters and parcels being left in whilst tracked items are prioritised. The postmen/women, we feel upset leaving letters in, sometimes for days on end- hospital letters etc!! It's so bad. I don't think the swing towards part time staff helps, they are constantly moved around rounds wise and so they don't effectively get to know rounds well enough and so mistakes are made. Our PDA handheld scanners are temperamental, there are not enough to go around each postman, batteries running out... It goes on. Outdated delivery offices, outdated equipment... So many things wrong on the ground. There's no point building a brand new shiny parcel hub if your postman is in a knackered van, no battery and because of staff shortages chunks of mail left in the office everyday.... This was happening before covid, covid has just added to the problems.

Rob • 12th September 2020 •