Trust at the Doorstep: Re-inventing Royal Mail for the next generations

This is my week 20 as the CEO and it has been a very busy, and exciting time.

We’ve made big improvements in service quality for our customers, helped to deliver a bumper set of elections, put unique barcodes on stamps, have great momentum with our new union agreement, ordered new and improved PDAs for the team, confirmed the roll out of new uniforms and connected remote communities by drone. And let’s not forget, we now deliver on a Sunday too.

I have visited over 50 of our sites, listening to and acting on your views. This included a week on the road going to all our Customer Experience Centres across the country; listening to how we can better help our customers is always a highlight.

And before I arrived, you had already done so much. Our financial results today are a result of your hard work. We have gone from expecting to be materially loss-making this time last year, to delivering an adjusted operating profit of £344 million in the UK. Thank you for everything you have done.

But as I have often said, we are not out of the woods yet.

The market situation remains uncertain, so we need to accelerate our transformation to keep ahead of the competition and seize the opportunity that is now in front of us.

We need to be brilliant for our customers, and at the same time become more efficient in delivering our service so we can generate the profit required to keep investing in all our futures.
 

Transforming our business

We are making very good progress on implementing the changes we agreed with the Communication Workers Union in December last year.

Over the next few months we will complete our revision activity. This - combined with the new agreed productivity measure – will help to ensure fairness of workload so that we can all equally contribute to our success.

We also need a step change in parcel sorting automation, and not just for cost efficiency reasons. Like letter sorting automation in the past, we know that parcel sorting automation will allow us to increase our capacity, improve quality and enable even later acceptance times for our retail customers.

We currently sort 33% of our parcels automatically. But really, we need to get to 90% automation as soon as we can. That is the industry benchmark. By the end of 2021/22 we’ll increase the number of parcel sorting machines in our network from 20 to around 30, and want to reach at least 50% of parcels sorted automatically. Our new hubs will bring us another c.15% when they start operating in 2022 and 2023. Our challenge is to close the rest of the gap within our existing operations.
 

Trusting our leaders to lead, and welcoming the next generation

By the end of October, we will have reduced our Delivery Office Managers’ workload, including a reduction in policies they have to follow from 212 to less than 20, so they can spend more of their time working with their team on the floor and focusing on their customers.

As well as improving our ways of working, I’m also excited to start welcoming the next generation of Royal Mail leaders. This year will see the welcome return of Postal Cadets through one of the largest apprenticeship schemes in the country.
 

Delivering new products and services for our customers

Our account teams are laser focused on growing as well as winning new business from our customers. To do that we can’t stand still, so we will constantly need to innovate to deliver more of what our customers need. 

We will make our doorstep Parcel Collect service easier to use – an estimated collection window, removing restrictions on the number of parcels collected and testing label-free options for customers who do not have a printer at home. We’re exploring other changes to make it even easier for customers too, such as whether we could remove the need for packaging at all.

We will expand our same day delivery prescription service, or “instant pain relief” as we call it.  When our customers are not feeling great, why should they leave their home when we can come to them?

You’ll have also seen that we launched a pilot of barcoded stamps earlier this year, giving each stamp a unique digital identity. For now, we are keeping to ourselves the thinking around the new services this could usher in. We will tell you more before the end of the year…

And in other developments, our new Sunday delivery service is growing every week and we are making our App easier to use, for Royal Mail & Parcelforce Worldwide customers.
 

Putting the environment front and centre

Did you know that when we deliver a parcel by foot, our environmental impact per delivery is around 70% less than the next best competitor? This is a unique advantage of our Royal Mail “feet on the street” delivery model.

But we want to go further.  We will make a series of other changes to reduce our environmental impact. For example, very soon we will launch our first ever delivery office with an all-electric fleet. We are very keen to understand the benefits of this operation; as well as reducing emissions, we think it makes financial sense, but we want to road-test it in real life.
 

Trust is our great unlock

We can only deliver all the above with trusted relationships everywhere. Thanks to your great response to our Trust Survey, we now have the information that will enable us to move forward together. We all have a part to play in improving trust everywhere, every day.

We will own ‘Trust at the Doorstep’ by being brilliant for customers, having trusted relationships everywhere and by growing our business.

The re-invention of Royal Mail for the next generations has begun.  We’re changing. And it’s working.

 
Simon Thompson
CEO