• Royal Mail’s workforce handled nearly 500m parcels in the third quarter
• In a single day, the group delivered nearly 12m parcels up and down country
• Group has kept on 10,000 out of over 30,000 temporary seasonal staff
• Lockdown demand will give bottom line a boost and share price up sharply 

Royal Mail has apologised for its patchy service levels over the past few months after experiencing ‘unprecedented’ demand during lockdown.

The company’s workforce handled 496million parcels in the third quarter of last year, marking the highest number on record.

On its busiest day in the third quarter, Royal Mail delivered 11.7million parcels, which is 32 per cent more than on its busiest day during the first national lockdown.

Uphill struggle: On its busiest day in the third quarter, Royal Mail delivered 11.7m parcels

The group admitted there had been ‘increased absence rates’ across its operations, with ‘exceptional demand’ and now poor weather also hitting the quality of its services.

Royal Mail has kept on 10,000 out of the 33,000 seasonal workers who joined for the Christmas rush to deal with increased traffic during the latest lockdowns.

The business has also put 6,000 more vehicles on the road to ensure people get their parcels delivered and plans to keep four ‘temporary’ sorting centres open to enable it to keep up with growing demand. 

Shares in Royal Mail jumped sharply this morning and are currently up 7.47 per cent or 32.10p to 461.80p. A year ago, the group’s share price was 175.40p. 

The latest national lockdowns announced by Boris Johnson in January meant revenue growth for the year to the end of March will be significantly higher than the £580million previously forecast, Royal Mail said. 

Its operating profits for the same period are expected to be over £500million.

Revenue in the first nine months of the financial year hit £9.3million, a rise of nearly 14 per cent.

The number of parcels it delivered rose by 31 per cent, while letter numbers fell 14 per cent to 5.6billion.

In recent years, Royal Mail been been looking to bolster its parcel services amid lower letter numbers being sent. The group faces raging competition from the likes of DPD and Hermes.

But, with shops closed, Royal Mail has been able to take advantage in the growth in online shopping and the subsequent upturn in parcel numbers.

‘Given these record volumes, we recognise that at times our service during the period was not always as we would have wished’, chairman Keith Williams, said.

He added: ‘But, thanks to the efforts of our team, the retention of around 10,000 of the 33,000 flexible workers from the Christmas peak, and the introduction of new processes, we have been making encouraging progress.’https://investing.thisismoney.co.uk/modules/price-chart/?epic=RMG

The group said January trading had remained ‘robust’, with parcel volume growth of 37 per cent amid the re-introduction of nationwide restrictions and a peak in the volume of items being returned to retailers after Christmas. 

In respect of Brexit, Royal Mail said it had the EU trade deal had only had a ‘limited’ impact on its operations, but admitted there had been, as expected, a drop in the number of parcels and letters being sent from Britain to places in the EU.  

On the issue of PPE delivered during the pandemic, Royal Mail said: ‘Royal Mail continues to be a key partner for the Government’s COVID-19 testing programme, delivering and collecting tens of millions of COVID-19 tests across the UK. 

‘We are also proud to have delivered around one billion items of Personal Protective Equipment (PPE) to care homes, GP surgeries and social care providers since April 2020.’

Julie Palmer, partner at Begbies Traynor, said: ‘Royal Mail remains one of the largest couriers in the UK and has shown its willing to innovate and reshape itself to meet the new demands of its customers.

‘The introduction of parcel hubs will add greater efficiency and help to offset the drop in letter volumes, while potential new contracts from the growth in e-commerce could help to keep the business on track.’

Source: thisismoney.co.uk