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Oligarch “ Getting back to the original topic (or at least one of the off-shoots), would it affect your future investment plans in IDS should RM decide to not introduce lockers?”
No, in the U.K. lockers are, and will remain a small part of last mile delivery.
As Doddle found when they burnt large amounts of cash building a network of parcel shops at what seemed the most favourable of all possible locations (main line railway stations) the vast majority of UK consumers prefer online shopping orders to be delivered to their home.
@Hounddog
Interesting debate. The situation in Estonia and other Baltic states reflects their experience at the time of independence in 1991 when their postal system basically had to be rebuilt at a time of considerable financial challenge. They had severe restrictions on fuel, little money and even struggled to provide wrapping paper and string for parcels. In the circumstances delivery to home addresses was infrequent and in some areas not available.
People therefore got used to using Post Offices and centralised lockers as their delivery address, and it became the norm for shippers to charge extra for courier delivery to home.
This is obviously very different from the experience of U.K. consumers and shippers, and for that matter Germans and French .
@Houndog as for Unions resisting PUDO developments history doesn’t back that up. They didn’t resist “Local collect” which created the biggest single network of pick up points in the U.K., the didn’t resist the contract with British Gas for the callers office PUDO network for Engineers, or the use of Meter Pouch posting boxes as Parcel Drop off points.
The only resistance to PUDO solutions I ever noticed was from senior management who preferred to go for short term cost savings which handed market share to competitors instead of investing in growth.
The growth in mobile working in sectors like health and financial services/banking presented lots of opportunities for Royal Mail to use its reach to provide a PUDO service point network, but nobody will be buying into it now that they have reduced callers office opening times to such small time windows.
@Houndog
Each of the articles was from a company with a vested interest in exaggerating demand for collection point and locker box delivery. From recollection Yodel fulfil quite of bulk click and collect orders for various retail chains as part of their offering, and that will significantly inflate their figures.
Nevertheless I agree with you that this is a growth area and it is one it would be good to see Royal Mail investing in. I just think it isn’t likely to be anywhere near as big as you seem to be suggesting. All the consumer research shows that delivery to home massively outweighs out of home delivery for consumers. E.g. In Germany, where DHL have made major investments in lockers home delivery is still the preferred option for over 80% of consumers and the figure has actually grown because of the pandemic induced growth in home working.
This draft report has some interesting research on the subject.
https://fsr.eui.eu/wp-content/uploads/2021/10/4B-02-Niederprum-VanLinden.pdf
I don’t see anything he posts Isleworth. There are enough people like Hounddog, Oli, JB and yourself that share and debate interesting points of view to make the forum worth visiting and making a contribution to.
The inane ramblings and rantings of TMS and a few others are funny to think of as angry little toddlers going red in the face in the knowledge that they are being completely ignored behind a line saying “This message has been filtered”
Hounddog’s links all seem to be to PR pieces issued by companies investing in lockers.
His underlying point about it being odd that RM appears to be making its click and collect/PUDO proposition worse while others are investing in theirs is well made. However the expectation that the potential for this last mile segment could approach 50% of the parcel delivery market at the expense of home delivery is massively over blown. There is plenty of independent published research on the subject which gives a much more balanced and realistic perspective.
Try this article for example
https://www.fortunebusinessinsights.com/smart-parcel-locker-market-104718
In every part of the globe the most preferred delivery choice by a substantial margins remains and will remain delivery to home. The last parcel monitor survey on the subject showed only 3.6% of parcels in Europe were delivered to collection points and only 1.48% to parcel lockers.
This will grow with investment in more locker installations but even in the parts of the world where delivery to collection points has always been a significant feature of the system (e.g. Oceania) it hasn’t reached a 10% share.
“What if RM cleared out every delivery office and populated it purely with lockers, thousands of them at every location? The posties could populate the lockers with parcels and the recipients could receive an email to collect. No need for an army of posties and vans polluting the atmosphere. Loadsamoney saved on staff costs, vehicle costs, fuel costs, utility bill costs. “
That sort of system is operated in some other countries around the world. The main post office in Accra is a very impressive building that looks like a large fort with the surrounding wall consisting of thousands of PO Boxes that postal staff deliver to from the inside and customers collect from the outside.
The system is a useless compared to the delivery system we have in the U.K., large numbers of the boxes are rented by people who then sub contract the address and hand deliver the contents, large numbers of boxes are tied up from the inside because people haven’t paid the fees, and it is not unusual to find mail that is several years old lying uncollected in the boxes.
“Oh Derek, you really are way out of your depth here aren't you”
Actually quite happy to float above the swamp of garbage that is churned out by several contributors to this forum who are clearly clueless about the company they have invested in and the industry in which it operates. I hope you have cleaned you snorkel. A filter helps.
It’s very odd that in the 20th century, with far smaller volumes, the GPO was able to provide several collections a day, and 2 deliveries 6 days a week nationwide for both 1st and 2nd class letters whilst at the same time achieving better Q of S and delivering decent profits every year.
But apparently any suggestion that this ought to remain even partially possible today is an anachronism !
JB I think we are going round in circles. The Ofcom statement is merely a reflection of what the regard as being a reasonable rate of return for an economically efficient company delivering the USO. It is going to “enable” 5-10% going onto the bottom line it would just assume that if it allowed RM to stop delivering on a Saturday between £125-£225m of cost reductions could be assumed when it looks at the cost side of price controls on USO traffic.
As for RM looking in to intelligent lockers, the delivery system in Qatar is to PO Boxes which alert addressees to the delivery of items electronically so that they know when to go to pick them up. British Postal Consultants designed the system in the late 1980s and spent decades managing it.
Lockers will remain a niche solution because for most of us the main advantage of shopping online is that you get what you buy delivered to you rather than having to go out to collect it.
The 5% figure is what Ofcom would expect an economically efficient operator to make from the USO. If RM ever got to being an economically efficient operator they could just keep the USO spec as it is and let RM raise prices on regulated products to deliver the margin. The decision to change the core 6 days a week, one price goes anywhere spec is for politicians to make, and they have made it clear they won’t be doing it this side of a general election.
Oligarch, unsurprisingly the statement just confirms that any amendment Ofcom recommends to the USO is aimed at making it more sustainable and it would therefore expect any savings to go towards maintaining the amended USO not the IDS bottom line or value of shareholder dividends.
Sid, whether people on this chat forum like it or not there are some powerful industry lobby groups who are opposed to the cessation of Saturday deliveries, and there isn’t a hope in hell a Tory Government facing dire poll numbers wanting to take them on.
As for the assumption that the savings from cessation of Saturday delivery would flow through to the bottom line of IDS without being targeted by Ofcom under price controls, that is just wishful thinking.
Also with 65% of consumers and 59% of SMEs saying they value having a next day delivery option for letters the chances of Ofcom and the Government supporting the end of 1st class is even more fanciful.
Oligarch competition law applies to all companies including Royal Mail . If they set prices below cost and deliberately low enough to “blow competitors out the water” it would constitute predatory pricing and would be illegal.
The reason we are seeing heavy discounting at the moment is because this is the time of year when there is a lot of excess carrier capacity in the market chasing low volume. The months leading up to peak see the carriers adding capacity to handle peak volumes at a time when demand is slack because consumers are saving up for Christmas and waiting to buy during Black Friday sales.
JB I would like to look forward positively but with the noteable exception of the creation of a business targeted at the Health market the only strategy appears to be about how to do a bit better in parcels by following what others have already done, while doing less than zero to bolster and add value to our letters proposition.
Unlike any previous stage of the company’s history there is no vision about how to ensure the company remains relevant to the markets it is in , just badly managed decline.
JB, Royal Mail used to be a innovating, pioneering market leader (think about telegrams, telephony, postcode marketing, OCR technology, letters and parcel automation, direct mail marketing, Datapost, Special Delivery, and even the Penny Post).
It’s now spending £billions trying to catch up with companies it should never have fallen behind and losing market share while doing so. It isn’t a good place to be and a large part of why we are here is because the company has pumped out £billions in dividends that should have been spent keeping ahead of the market, and diversifying to exploit what was one of the most loved and respected U.K. brands.
With better leadership, and reinvestment of profits instead of dispersal as dividends I believe we could be looking a shares worth far more than the current price plus all dividends paid since privatisation. So no I don’t think any of the dividend payments were a good idea. The grow instead of dividend model followed by Amazon, Alphabet and co would have been far better for Royal Mail and it’s shareholders.
JB some are easy to get into, some aren’t, some require significant investment, some could be achieved on a start up basis very cheaply, some might require mergers, alliances or even acquisitions of existing players,
Royal Mail isn’t best in class in any of the core markets and the money spent on super hubs will only go some way to catch up to the likes of DPD aor quality and Evri on cost. In the mean time they and others will be up and gone on further enhancements to their offering.
I keep my shares in RM because I don’t need the money for anything else and want my votes, so I can oppose bad appointments and unwise dividend payments.