Royal Mail: letter volumes plummet

In a trading statement ahead of its AGM yesterday (8th September) Royal Mail announced it delivered 1.1 billion fewer letters during the pandemic than it did in the same period in 2019.

Amidst news of its booming parcels business and rumours of plans to sell off its successful international business GLS, shares in Royal Mail grew in value by 10% yesterday.

Letter revenues fell by 21% on a volume drop of 28.5%. This was counterbalanced by parcel revenues growing 34% and volumes growing by 33.1%.

The size of the parcels business is still dwarfed in volumes by letters – the 33%% volume growth of parcels was 177 million pieces as against the 28% volume drop of letters of 1.1 billion pieces.

The UK mail operator has stated it expects a ‘material loss’ at the end of the financial year, thanks in part due to £75 million in extra costs due to the pandemic.

Royal Mail said: “We are failing to adapt our business to fundamentally lower letter volumes and are holding on to outdated working practices and a delivery structure that no longer meets customer needs.”

The postal operator is shifting to greater automation of its parcel sortation systems, and removing outdated and oversized letter sorting machines.