Royal Mail to create 1,000 jobs expanding parcel network

Royal Mail is set to create 1,000 new jobs with a GBP 75m investment in its UK express parcels business, Parcelforce Worldwide, over the next four years. The company said today it will be opening a new parcel processing centre in Chorley, Lancashire, in autumn 2013, and will also open two depots in Cornwall and Hampshire.

Plans will also see nine existing depots either expanded or moved over the next four years.

Royal Mail said the investment programme backed one of the key components of its growth strategy – growing its parcels business in the UK and overseas.

Last year, parcels accounted for GBP 4.2bn of revenue – very nearly half of the company’s turnover, growing by 10% year-on-year in 2011-12 – with domestic parcels bringing in GBP 2.6bn. Royal Mail’s domestic parcel volumes grew 6% during the year, while letter volumes declined by 6%.

Royal Mail now has an eye on the boom in online retailing and home delivery, predicting the market will represent 12.4% of the UK’s GDP by 2016.

The UK express parcels market is currently worth GBP 5.8bn, totaling 1.1bn items a year, Royal Mail believes.

“Customer-focused”

Chief executive Moya Greene said today that her company’s strategy was to convert the increase in parcel volumes into profitable growth.

“That means becoming a much more customer-focused company being run on commercial lines and investing in new, vital technology,” she said.

“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.”

The investment in the Parcelforce Worldwide network will come with a “significant” investment in associated IT systems with legacy infrastructure to be replaced.

The plans by Royal Mail received a warm welcome from the UK government today, with minister for employment Mark Hoban saying: “It’s great news that 1,000 new jobs will be created across the country as a result of this investment.”

On the international side of the business, Royal Mail’s Europe-based parcel division GLS agreed a partnership with Chinese express firm ZJS Express back in August, providing a gateway for Chinese businesses to ship parcels into Europe.

Parcelforce Worldwide will be providing the UK delivery for the GLS-ZJS partnership.