UK’s Royal Mail Expands to Accommodate E-Commerce Demand
The British postal service, The Royal Mail, plans to invest $114 million in its parcel delivery businesses in order to accommodate the increasing demand of online retail.
According to the Boston Consulting Group, purchases transacted online will account for 12.4 percent of the UK’s gross domestic product by 2016.
In response to this staggering statistic, The Royal Mail Group (the UK’s primary postal provider) is planning to invest 75 million pounds (AU $114 million) into its parcel processing capabilities, which will include the creation of 1,000 jobs dedicated to delivery operations and management.
The business has announced plans to build a parcel-processing centre in Chorley, Lancashire in order to expand its hub, which will then be followed by two depots in Cornwall and Hampshire. Plans for a further nine depots to be expanded or moved to larger sites are being scheduled for the next four years.
“Our investment is part of Royal Mail Group’s strategy to grow its parcels businesses in the UK and overseas,” Royal Mail Group CEO Moya Greene told Internet Retailer. “Our strategy is to convert the rise in parcel volumes to profitable growth. That means becoming a much more customer-focused company being run on commercial lines and investing in new, vital technology. The investment will enable Royal Mail Group’s express parcels business to meet the rapid growth in demand in the business-to-business, business-to-consumer and consumer-to-consumer markets.”
According to Royal Mail, its UK package delivery volumes increased by 6 percent, while revenues grew by 10 percent this year as this facet of operations continues to be affected by the booming online retail industry.