Royal Mail to close mail centres, while opening parcel centres

Royal Mail is closing three of its mail centres in the UK in light of declining letter volumes – while investing in new centres elsewhere to respond to parcel volume growth. The company revealed today that it is to shutter sorting plants in Cambridge, Gloucester and Shrewsbury by early 2014.

The plans would affect 200 staff in Cambridge, 372 staff in Gloucester and 240 staff in Shrewsbury.

The announcement came just days after Royal Mail announced a GBP 75m investment programme in its Parcelforce network, which it said would create 1,000 new jobs over the next few years.

And, this week the company announced it was opening eight temporary parcel sorting centres from this week to help cope with surging parcel volumes during the run-up to Christmas.

Royal Mail has seen its parcel volumes increasing by 6% a year at the same time as its traditional letter volumes have been falling by 6% a year so it is now delivering 58m items a day compared to 84m six years ago.

Royal Mail had 69 mail centres open in 2007/08, but now has only 51 mail centres across the UK and has current plans to close 13 more centres.

Geoff Braden, processing director for Royal Mail, said: “Change is absolutely essential to meet customers’ expectations of a world-class postal service, ensure we operate efficiently and provide a great quality of service in a smaller and radically changing market.”

Closures

Royal Mail said its mail centres were being closed because it was facing competition from Internet communications and also from rival postal operators, who it said now carry one in three letters and more half of all business mail in the UK.

Around Cambridge, Royal Mail’s inbound mail volumes have fallen by 32.6% in the last five years while outbound volumes have fallen by 39.7%. Around Gloucester, inbound mail volumes fell 18% over the last three years, while outbound volumes fell by 27% in the same period. In the Shrewsbury around Shropshire and Mid Wales inbound volumes fell 24.3% in the last five years, while outbound volumes dropped by 35%.

Royal Mail said it carried out eight months of consultation into the mail centre closures with its employees and unions, and insisted it is “working hard” to identify alternative roles for employees at the affected centres.

Collection duties will remain, the company said, and staff will be reimbursed for extra mileage getting to their new places of work.

In Cambridge, the bulk of processing operations will transfer to Peterborough, with the remainder moving to Chelmsford. Collection services based at the centre will move to the Cambridge delivery office, which is becoming a mail processing unit complete with compact sequencing machines capable of sorting 45,000 letters an hour into walk order.

In Gloucester, mail processing operations will move to Bristol, with the transfer starting in the middle of 2013 to be completed by early 2014 before the site is sold. Two mail processing units will be created at the existing Gloucester North and Stroud delivery offices complete with compact sequence sorters.

In Shrewsbury, most processing operations will move to Chester, Cardiff and Wolverhampton mail centres, with only delivery operations remaining at the Shrewsbury site.

Ricky McAulay, Processing and Collections Director for Royal Mail East said his team would be speaking to staff over the coming weeks about whether another role could be found for them, or the options on leaving the company on voluntary terms.

McAulay added: “Customers can be reassured that we will do all we can to minimise any disruption and ensure we maintain the high level of service they expect and deserve from Royal Mail.”

Along with Cambridge, Gloucester and Shrewsbury, Royal Mail has previously announced the closure of centres in Teesside, Derby, York, Tonbridge and London East in 2012/13, Darlington, Bradford, Hull and Leicester in 2013/14 and Doncaster in 2014/15.

The company has opened three new mail centres in the last two years, in Warrington, South Midlands, and Medway.

Parcel centres

Meanwhile, Royal Mail said it is in the process of opening eight new dedicated parcel sorting centres from this week to deal with festive parcel volumes.

The new centres are being opened in Edinburgh, Glasgow, Swansea, Bolton, Tamworth, Peterborough, Swindon and Greenford.

They will sort a “significant proportion” of the parcels Royal Mail handles before they are distributed around the UK for doorstep delivery, the company said.

The investment in the dedicated parcel sort centres comes in addition to the “substantial” extra effort Royal Mail usually makes at allocating resources to handle the festive mailbag, it said.

Mark Higson, Royal Mail’s managing director of operations and modernisation, said: “Christmas is the busiest time of year for Royal Mail and our customers. Royal Mail has invested in eight dedicated parcel sort centres to increase our scale and improve our flexibility during this important time of year for our customers.”

As reported last week, Royal Mail’s Parcelforce investment plans include the opening of new parcel centres in Lancashire, Cornwall and Hampshire as well as the expansion or relocation of nine other sites over the next few years.