Parcelforce aims to be a smaller but smarter carrier under restructuring plans announced last week by parent group Consignia.
The company, which has not been in the black since its formation in the 1980s and is now losing £180m a year, is shelving 6,700 out of 11,700 jobs. It will close five parcel sorting centres by the end of June, together with 51 of its 101 depots in a bid to save £460m (€736m).
CONSIGNIA, the state-owned UK post office losing GBP1.5m ($2.13m) a day, is shedding 15,000 jobs over three years.
But Parcelforce Worldwide, Consignia&’s lossmaking parcel delivery arm, will bear the brunt of a group-wide cost-cutting package that will save GBP1.2bn by 2005.
The cutbacks reflect the gradual loss of Consignia&’s letter mail monopoly, while Parcelforce _x0014_ carrying 120m packages a year _x0014_ competes head-on with the private sector.
Restructure of loss making parcels business and rationalization of transport operations will bring Consignia (former British Post) 460 million pound in cost savings and cost 15,000 jobs, 13,000 through redeployment or redundancy.
‘Consignia will restructure its loss making parcels and express business, Parcelforce Worldwide, and make radical changes to its internal logistics and transport networks as the first moves in a three year renewal programme to cut costs by more than 1.2 billion pound and provide a secure long term foundation for the company and for universal postal services in the UK.
Announcing the plans, Consignia Chairman Allan Leighton said, “Consignia is in a perilous position – losing more than 1.5 million pound every day. Parcelforce Worldwide is losing 15 million pound per month as we have failed to reduce our costs fast enough as business has declined. We need to renew our operations and halt the financial losses which put key services at risk.
Both measures announced today are far reaching – but they are just the start, not the end. They will ensure that real progress is made in the first year of a three year strategy to restore profitability, deliver positive cash flow, improve services and make the business a better place in which to work.”
From July Parcelforce Worldwide will concentrate solely on the growing market for time-guaranteed and next day and two day express deliveries, and will cease its declining and unprofitable portfolio of three day plus delivery products. The market for three to five day deliveries has halved within five years. Consignia will transfer its universal parcel service to Royal Mail, which will use its existing network to provide a uniform and affordable parcel delivery to every UK address, no matter how remote.
The five parcel distribution centers that currently handle Three Day plus deliveries will close and the number of Parcelforce Worldwide depots will reduce from 101 to 51.
Parcelforce Worldwide currently employs around 11,700 people, either in a dedicated parcels unit or providing operational support elsewhere in Consignia. The current workforce will, over the next two years, be reduced by around 6,700, over and above natural turnover.
Up to 900 of those employees whose current jobs disappear will have the opportunity to work with Parcelforce Worldwide as owner-drivers in line with agreements reached with the trade unions.’
Source: Consignia release
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