Operations / Shipping and Logistics

UK’s Royal Mail Expands to Accommodate E-Commerce Demand

Royal Mail post box

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.

One Comment

  • Parcel delivery revenue is overtaking revenue from traditional mail for postal services all over the world including here in Australia. In Europe it became obvious that the postal services needed to support that trend. Royal Mail now offers it’s customers a hosted online shop to help them move into selling online which will further drive parcel revenue. They are presenting it as ‘simplewaystogrow.com’ and are using, yes you guessed it – ePages as a platform to deliver the service. Similarly La Poste in France are seeing delivery revenue grow and they are also offering online stores with, you guessed it, ePages.

    We will see more of this trend of the trusted brands supporting their business base with secure and effecting capabilities that will help them grow.

    John

    Reply

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