The findings from Ofcom demonstrate the enormity of Royal Mail’s challenge of transitioning from a legacy letters business into a modernised parcel operation.
‘The Universal Service Obligation for letters to be delivered to the door six days per week makes it difficult to transition to new delivery models and adapt their networks to capitalise on the infrastructure that has been designed for a mail network but could be used to optimise door delivery for all products and services,’ explains Bob Black, Non-Executive Director at TMX Transform.
By moving to delivering mail three days per week, the Royal Mail would have the opportunity to build a more sustainable network based on efficiencies in processing facilities for letters, flats, packets, and parcels as well as implementing key technology to reduce labour cost. From a logistics point of view, this proposed reform would help Royal Mail address inefficiencies which have been exposed over this incredible growth period for e-commerce.
Transitioning Royal Mail supply chains to embrace e-commerce parcel volumes whilst improving the customer experience needs to happen, otherwise market disruption through existing competition and new entrants coupled with a lack of investment due to ongoing losses, will force the merchant and the consumer to look elsewhere which will increase the speed of market share reduction as they have experienced over the last few years.
