Covid-19: Royal Mail reports strong parcel demand but returns down

Royal Mail has said today (27 March) that its parcel business has experienced strong demand over the last two weeks, supported by an increase in eCommerce.

It said more people had shopped online during the fortnight, coinciding with a period when many consumers reduced their outings in light of the escalating Covid-19 coronavirus pandemic.

However, the company said it is closely monitoring the wider landscape in the UK, amending its processes to keep employees safe, and hasn’t ruled out reductions to its services in the future, especially as the business is now reporting more sickness absences as staff choose to self-isolate at home.

Indeed, the company expects the significant uncertainty in the UK to result its parcels, international and letters business reporting a loss this financial year, while its GLS logistics arms will see profitability reduced.

Royal Mail said its tracked parcels and other standard products have performed well in the last two weeks, although noted its 'Tracked Returns' product has been used less frequently. It said volumes were lower than expected due to weaker volumes of returns from the clothing sector at these unusual times.

Volumes through the physical Post Office stores have also seen declines in the past seven days due to recent restrictions on movement which were announced in the prime minister’s address to the nation on Monday. It added that it is difficult to assess how volumes will develop in the coming weeks.

Business to business volumes are down, although Royal Mail said this only accounts for a small proportion of its overall parcel volumes. International volumes were said to be lower, attributed to restrictions in certain countries, especially into and out of China, and reduced air freight capacity.

Royal Mail said it provides letter and parcel deliveries to over 30 million businesses and households, and in this time of a health emergency in the UK it has taken steps in the workplace and during its deliveries to limit human contact.

Earlier this week, Shane O’Riordain, managing director of marketing, regulation & corporate affairs at Royal Mail, said the company has restricted the number of people allowed in a delivery vehicle at any one time to one.

"In order to protect further both our people and customers, we are temporarily not handing over our hand-held devices to customers to capture signatures,” he remarked.

“Postmen and postwomen will instead log the name of the person accepting the item, and can sign on their behalf. This will apply to all deliveries that require a signature.”