Royal Mail targets online for parcels growth

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Royal Mail is shifting its focus to capitalise on the growth of online retailing to compensate for the decline in the number of letters it handles.

In its results for the year to 31st March, it highlighted plans to expand and automate its networks to handle more parcels. “We are well positioned to continue to benefit from the structural change to e-retailing, which is driving increases in parcel volumes, and to manage the decline in letters,” said chief executive officer Moya Greene.

The report highlighted the fact that Royal Mail was investing to adapt its network to handle more parcels and expanding the capacity of Parcelforce Worldwide’s express network.

In addition, it said it was streamlining its parcels offering to make it easier for customers to choose the right service for them.

“We have simplified our terms and conditions. We have provided our colleagues with more of the tools they need to deliver increasing numbers of parcels.”

And it said that by Christmas of this year every postman an woman would have access to a hand-held scanner for his or her delivery round.

Last year Royal Mail handled 994 million parcels in its core network compared with 950m in 2012.

Parcelforce, the express parcels division, handled 70 million parcels, up from 66 million the year before.

The two parcels operations together produced a like-for-like increase in parcel revenue of 13 per cent and reported revenue of £2,979 million.

In contrast, the number of addressed letters declined from 15.1 billion to 13.9 billion.

Price increases across UKPIL’s letters and parcels portfolio, combined with increasing parcel volumes, helped revenue rise six per cent £7,766 million. Reported operating profit after transformation costs increased to £331 million.

General Logistics Systems, Royal Mail’s continental parcels business, saw operating profit fall to £101m from £128m in 2012 as a result of tough trading conditions. Although parcel volumes rose one per cent but revenue fell from £1.56bn to £1.5bn.

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