Royal Mail – parcel volumes and profits fall in Q3

• 26 January 2022
• Transport / Logistics Services

Royal Mail has announced its third quarter financial results. Parcel volumes and profits fell in the quarter, though still meeting management’s expectations even with the high street opening up through the pandemic.

The postal operator handled 439 million parcels in the quarter, a decrease of 7% against Q3, 2020-21. Domestic parcel revenue parcel profits dropped by 4.9% compared to Q3 2020-21. Royal Mail pointed out that after the spike of the pandemic, it has maintained market share.

Keith Williams, Chair, commented: “We expected some decline in parcel volumes given most retail stores were open during the period, unlike last year. However, the trend towards customers wanting more parcels remains, and responding to that change efficiently is key. Our domestic parcels business in the UK has seen demand increase by around a third over two years, as has our GLS business across its markets.” 

Simon Thompson, CEO Royal Mail, commented: “With the rise of Omicron, absence has been around twice pre-COVID levels, with around 15,000 staff off sick or isolating in early January. Thankfully, this is now improving. We are resolutely focussed on addressing these issues which have affected our service in some parts of the country. Year to date we have spent more than £340 million on overtime, additional temporary staffing and sick pay, as well as providing targeted support for the offices most impacted. We have taken steps to maintain as comprehensive a service as possible, whilst keeping our people and customers safe. I’d like to thank all our people who have worked incredibly hard, as they have done throughout the pandemic. I would also thank customers for their patience in those areas where we have faced operational challenges and increased absence as we focus on restoring our usual levels of service everywhere.” 

“We have today entered into formal consultation on a management reorganisation to further streamline our operations and, at the same time, improve focus on local performance. We are committed to conducting the process sensitively, working closely with our people and their representatives. We have a track record of delivering change through natural turnover, redeployment and voluntary redundancy, wherever possible. Our full year outlook has been revised to take account of the costs of this reorganisation.”