Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
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beatrootjuice, don't forget that a higher percentage of the parcels are now sent out by business customers who have contracts and therefore pay less, so for example, where Joe Public pays £3 for a small parcel, a business might only be paying £2 however the handling costs are still the same so less revenue.
well the last we heard was that parcel volume was up 30% but parcel revenue was only up 20% so are we delivering parcels for free? Thats gotta be the only explanation.
Oligarch appreciate your response and understand some of that yes not ideal not being able to just do the job that people prefer. Also get re the drivers but not clear if they are being asked to work when there is no driving to be done surely that's better than doing nothing or having their hours cut. Yep having dedicated areas/offices would help but not acceptable to have managers not manage their teams and the picture you paint of people although no doubt accurate fof some taking extra breaks/skiving is sad to read. Totally agree tougher because of current social distancing but only been in place 2 months but will obviously be around for a while.
I was being tongue in cheek re dumping parcels, maybe it would be better for us not to win any new business as it sounds so problematic. It also makes it even more critical to get automation in ASAP. I guess the key point is the financials will not be great to read but not unexpected.
JB, there are a few of contributing factors for the low manual parcel sorting rate.
1; Due to low letter volumes, the machine operators are asked to move over to parcels. The machine operators hate this and will do anything to get out of it- long toilet breaks/cigarette breaks, taking extra time to do machine TPM cleaning etc...
2; The drivers are even worse as per the above (although I do have some sympathy here as they signed up for driving duties so that they didn't have to sort or deliver mail).
3; The managers spend so much time moving furniture around and sorting parcels themselves that they aren't keeping an eye on their workforce.
4; Social distancing. There's only so many manual bullrings that you can fit into a given space and it's one per bullring now.
As for not handling parcels if they're not making money, that's not going to happen because we are Royal Mail. We can't just dump the surplus over to Amazon.
I agree the next financials will make very interesting reading and IMO will show the actual numbers in terms of volumes and revenue. Based on the last update letters will be down and parcels up probably not enough to offset any reduced revenue from letters and D2D. I think most will understand manual sortation takes longer and increases costs. That's why I don't expect the 5 year plan to change that significantly in terms of getting automation in as quickly as possible. Last FY report did say we had doubled parcel automation and my understanding is this is now at 26% so still a long way to go.
Of course overall we make money off parcels and when pricing products all aspects are taken into account, volumes, collection. transportation, processing and delivery. E.G Processing 26% of 200k volumes has to be better than 26% of 100k. I am not disputing some parcels cost more to deal with but overall we must make money or we wouldn't be investing in new hubs to drive handling costs down further. If not we would be as well stop handling them (USO apart) and reducing resource by the corresponding levels. I don't know enough about the hourly sorting rates but surprised these are not measured and as usual these rates will vary across centres/offices.
Re planning of Warrington hub as far as I can tell nothing has changed in getting this fully operational by 2023 and I can't find any links to the phasing of the build etc. Of course with major projects of this nature things can slip and perhaps the current crisis has had an impact re supplies of kit etc. I believe the the 2nd site for the midlands is still in process and the 3rd is still planned. Is this progressing as quickly as I would like no and hopefully we will get an update at FY results time advising that this is being accelerated.
Mike, the next financial update will make interesting reading. I would obviously expect DSA and letter box collection mail volumes and therefore revenue to be much lower plus don't forget the lack of Door 2 Door which is also a great revenue stream.
Parcels are different though. Sure, I would expect the offices with parcels automation to be making but in the offices where there is no automation it's a loss maker. Each parcel is manually sorted through several breakdowns and the hourly sorting rate isn't monitored so not particularly high.
Don't believe the hype 200iq... yes the current non-fully automated system of processing parcels isn't the most cost efficient method of doing it but we certainly aren't losing money on parcels.
It's a shame that the more parcels we get the more money we lose.
My office broke the Christmas parcel record yesterday .Today most were saying they had more , this is not going to stop now . Parcels will continue to rise