Parcelforce faces the chop
PARCELFORCE, the delivery business run by Post Office operator Consignia, will have to close if its losses are not stemmed within 12 to 18 months, senior executives have warned.
The move would leave Consignia’s largest market, business packages, open to competitors such as UPS and Federal Express.
Senior Consignia executives say that all but the operations it is forced to carry out to fulfil its commitments to provide a universal service would be shut unless the losses – expected to reach pounds 200 million by the end of the year – are turned around by spring 2003.
Most of Parcelforce’s 12,000 workers would go. Its legal duty to deliver parcels to homes – 10 per cent of its business – would be switched to Consignia’s Royal Mail arm.
Chief executive John Roberts is believed to have concluded there is no alternative. Parcelforce consumed pounds 110m in the first half of its financial year and is increasingly threatened in the business market.
Consignia has begun to stem costs by using self-employed drivers, but the management feels this will not be enough.
Consignia could deliver, page 8 Copyright 2001 The Observer.
