Royal Mail commits to two fully automated UK hubs

Royal Mail has agreed two fully automated hubs in the North West and East Midlands totalling more than 1.1 million sq ft.

It has signed an agreement with Beumer Group to design and build the automated parcel sorting system for its new fully automated North West parcel hub in Warrington and is believed to have agreed a design and build solution with investor developer Prologis for an 800,000 sq ft sortation hub at DIRFT III in Daventry, East Midlands.

The Warrington hub is scheduled to be fully operational by early 2022, it will be around 350,000 sq ft. Once complete, it is expected to handle 800,000+ parcels per day.

To achieve the desired levels of parcel sortation Royal Mail specified widespread use of automation at the hub. It turned to BEUMER Group to provide the technology required to do this.

Simon Barker, national operations director at Royal Mail, said: “We have seen a major rise in parcel demand over the past few years. Speeding up the passage of parcels within our system through automated sorting technology is key to boosting Royal Mail’s parcel processing capacity.”

Last week Royal Mail said that during the first five months of the year, it had seen a substantial shift in its business from letters to parcels driven by B2C and e-commerce.

During the first half of 2020 parcel volumes increased 34% (177 million more parcels) and revenue increased 33.1% year on year.

In its first half statement last week Royal Mail said“The trends we are experiencing in letter and parcel volumes may slow after the pandemic but we do not expect them to reverse. There is an opportunity to benefit from the rapidly growing demand by customers for parcels and if Royal Mail can adapt its business quickly enough, we will be well positioned to meet customers’ demands for more and more items, to and from more people, delivered more frequently. But we need to move quickly.

“Currently, too many parcels are sorted by hand and we are failing to adapt our business to fundamentally lower letter volumes and are holding on to outdated working practices and a delivery structure that no longer meets customer needs.”

Royal Mail has been in ongoing discussions with both Unite CMA and the CWU on the changes needed. The company is pushing forward a modernisation program to enable evening purchases to be processed and delivered the next day.