Royal Mail’s Amazon delivery deal is just a ‘sticking plaster’, says ParcelHero

International courier ParcelHero says Royal Mail is crying wolf over ‘challenging’ parcels market

Royal Mail’s ‘nick of time’ pre-Christmas deal with Amazon, enabling the online retailer’s customers to pick up parcels from Post Offices, won’t restore its fading fortunes, says London-based International couriers ParcelHero. ParcelHero’s MD, Roger Sumner-Rivers says that Royal Mail was crying wolf last week by blaming its dramatic 6% fall in profits on Amazon and a ‘challenging’ UK parcels market.

Royal Mail, which was privatised 13 months ago, reported last week that its pre-tax profits fell by 6% in the six months to 29 September 2014, from £233m to £218m. Its revenues from parcels fell by 1% during the half-year, it warned. Announcing the result Royal Mail CEO Moya Greene said: ‘The UK parcels market remains challenging’ and also blamed Amazon for growing its own delivery services.

However, ParcelHero’s MD, Roger Sumner-Rivers takes issue with these claims. He explains: ‘Royal Mail’s deal with Amazon to offer customers Local Collect service in Post Offices is a short-term sticking plaster. It doesn’t address the reason why Amazon felt compelled to develop its own delivery service in the first place. The fundamental issue is the speed at which Royal Mail itself is innovating. In an age in which convenience matters, consumer’s expectations are becoming higher and higher. Who wants to wait in all day for a parcel? Even under the new deal, Amazon customers will be disappointed to find that many Post Offices are closed on Saturday afternoons.’

Roger adds that, despite Royal Mail’s claims, the parcels market is buoyant. Says Roger: ‘There’s no doubt that, far from being “challenging”, the UK parcel industry as a whole is positively booming, especially in the consumer delivery area of the market that was traditionally a key strength for ParcelForce.’

Roger explains: ‘IMRG predicts parcel order volumes from UK e-retailers will exceed 19% year-on-year. UK parcel deliveries are likely to hit 920 million this year. Analysts expect growth of 4-5% a year across our sector, so it’s clear that Royal Mail is now losing market share.  Royal Mail not only lost out to Amazon’s decision to deliver more of their packages themselves, but also suffered high profile contract losses of John Lewis and Marks and Spencer’s business to rival carriers.

Companies such as ParcelHero’s partner delivery service DPD have introduced real time GPS based deliveries, with a one hour delivery time slot, multiple delivery options and Sunday delivery services. These are key innovations that have changed the market, and also increased consumers and retailers expectations of delivery companies. Roger says: ‘Royal Mail is now losing out, and I believe if they don’t adapt quickly, we will see an acceleration of their loss of market share in 2015.’

Roger continues: ‘Royal Mail was privatised in an already competitive market, in which companies such as ParcelHero undercut the Post Office by as much as 72% in some areas. The problem for Royal Mail is not a challenging market, but its outdated infrastructure, based around the fast-disappearing letters market.’

He concludes: ‘Customers are increasingly likely to shop around for the best parcel delivery deals, and they realise there are now cheaper and quicker alternatives. Apex-Insight reports that the churn rate for the industry is 20% this year. That’s a lot of once loyal Royal Mail customers now voting with their feet or mouse. ParcelHero is already benefiting strongly from this trend, with 28% growth in our UK parcel deliveries in 2014’

Find out more about the latest courier industry innovations and how Royal Mail prices are being undercut at www.parcelhero.com

For more information please contact David Jinks, Head of PR, on david@parcelhero.com or by phone on 0208 7584962 (07772 055748 out of office hours)

Roger Sumner-Rivers, founder and MD of ParcelHero.com, is available for further expert comment. Contact David Jinks on 0208 7584962 to arrange an interview.

Leading international online courier ParcelHero strategically partners with the world's leading, logistics companies, including DHL, UPS and DPD to provide a flexible, cost-effective range of parcel delivery services to over 220 countries worldwide. Huge bulk purchasing power allows ParcelHero to offer highly competitive pricing with no compromise in service quality. ​

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