Wednesday 28th Sep 2016 - Logistics Manager

Parcels focus boosts Royal Mail revenue

Revenue from parcels rose eight per cent at Royal Mail for the nine months ended 29th December, despite the fact that the volume of parcels handled was unchanged.

This was the result of Royal Mail’s move to sized-based pricing which hit consumer volumes – driving “large uneconomic items” out of the core network. However, there was growth in account parcel volumes. Parcels now account for 51 per cent of Royal Mail’s revenue.

Parcel volumes in December were 115 million, a like-for-like increase, peaking at over ten million parcels delivered on the busiest day.

Total letter revenue declined by three per cent on a like-for-like basis, compared with a four per cent like-for-like decline in the first half, as the year-on-year impact of the London 2012 philatelic sales in the prior year has diminished.

GLS, the ground-based European parcels business, increase volumes by five per cent and revenue by six per cent.Royal Mail said GLS performed well continuing the trends seen in the first half, with good progress in Italy and the emerging European markets and the turnaround in France continuing. However sub-contractor rates in Germany continued to see upward pressure.

Total like for like revenue was up two per cent. Chief executive officer Moya Greene said: “We remained the nation’s number one parcel delivery company, handling 115 million parcels in the month of December alone. That’s significantly more than any other carrier in the UK parcel market.

“GLS, our ground-based European parcels business, has performed well and is exploiting the growth opportunities in the Eurozone. Our financial performance to date is in line with our expectations and gives us confidence that we will deliver against our key value drivers for the full year.”