Last Mile Brief is sponsored by: |
![]() |
Want the Last Mile Brief sent to your inbox every weekday? Sign up for free here.
International Distributions Services (IDS) plc, parent recovery of the Royal Mail, has recorded a H1 2023 loss of £319m due to tough economic conditions and strike action.
In its financial statement, the company said its half year performance was “in line with expectations, against a challenging macroeconomic backdrop”.
Regarding the Royal Mail, IDS added that it had taken short term actions to stabilise business. This included improving its grip on quality and focusing on delivering Christmas deliveries. It also claims that Royal Mail is “on track with customer win back” and is “driving a modernisation agenda”.
In contrast, GLS, also owned by IDS, recorded “robust performance with strong revenue growth in H1″. According to IDS, GLS has benefitted from a “flexible business model and cost discipline”. Moreover, IDS says GLS has been successfully executing on strategy and is well placed for long-term profitable growth.
Commenting on the results, Martin Seidenberg, Chief Executive Officer of IDS plc, said:
“We have two businesses with great potential – Royal Mail and GLS. Three months into the job I am more convinced of that than ever.
When I arrived, I took action to stabilise Royal Mail, after performance had suffered due to industrial action and customer losses. We’ve delivered on that plan through rigorous cash management, controlling our costs and ruthlessly prioritising high-return projects.
My top priority now is improving quality. From experience, I know that quality is key for customer satisfaction and sustainable growth, so we are pulling out all the stops to deliver Christmas for our customers. This includes recruiting 16,000 seasonal workers, opening five temporary sorting centres and launching an incentive scheme for operational employees worth up to £500 each for hitting local and national quality targets.
We have a clear plan for improvement longer term, including reinforcing operational management at a regional and local level, and recruiting faster than ever before, reducing reliance on agency workers. A number of changes we secured in the agreement with the Communication Workers Union (CWU), such as new sickness and attendance policies, will also help to underpin quality. We’re making good progress implementing that agreement, but our change agenda is wider and will take time.
We’re modernising the network, with two new automated hubs, and becoming more agile in our operations, more efficient, and more sustainable. I’m pleased to say customers are coming back to Royal Mail, and we’re on track with our win back programme.
Looking ahead, we are transforming our business every day, but we can’t do it all on our own. We also need the regulator and the Government to do their bit. It’s simply not sustainable to maintain a network built for 20 billion letters when we’re now only delivering seven billion. The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind. We welcome the fact that Ofcom will be reviewing options for the Universal Service, but the need for reform is urgent.
GLS delivered a robust financial performance in the first half, despite challenging macroeconomic headwinds, and saw revenue growth in almost all markets. GLS has a proven track record of growth, solid margins and cash generation. We are continuing to invest in our network and portfolio and have the right model, and the right strategy, to deliver long-term growth and margin expansion.”
To receive a summary of all the big parcel delivery and last mile stories every weekday, subscribe to our newsletter.
Alternatively, you see our daily compiled news summaries by region here: Europe / North America / Rest of the World.
Photo by Siarhei Plashchynski on Unsplash