Royal Mail is preparing to reduce more freight flights this month.
Martin Seidenberg is the CEO of International Distribution Services and plans to “make the biggest network change in twenty years” for Royal Mail deliveries, despite the uncertainty caused by the takeover by Daniel Kretinsky, a Czech energy tycoon , who has the support of the board.
Royal Mail will reduce its daily chartered flight transporting mail around the UK from 24 to 18 as part of its overhaul in order to cut costs and carbon emissions. The company has cut 11 flights in the last week, and another three will be terminated on 20 July. Four more flights will be terminated by early 2025.
This move is part of Seidenberg’s strategy following his arrival in Germany last year. It represents the biggest reduction ever of domestic airmail. By shifting the mail to roads, it will save 30,000 tonnes carbon dioxide equivalent per year and cut 1.2m miles of airmiles. It hopes to reach net zero by the year 2040.
Seidenberg said to the Guardian that the flights were part of a wider transformation agenda. The organisation is still focused on transformation, despite the recent bid crisis. We had to concentrate on it for a few weeks.
Royal Mail has shifted mail from the skies to the roads, in part by implementing a new system that includes later shift times up to 90 minutes at delivery offices. This allows it to move mail over longer journeys and still meet its next-day delivery target.
Seidenberg said, “We now have more time to push mail through the road network, allowing us to take flights out.” He added that some customers, such as online retailers, could now deliver parcels even as late as midnight.
Stansted, Inverness and East Midlands Airport (EMA) are among the routes that have been cut. There are 18 flights left, including flights between EMA, Edinburgh and Belfast, as well as flights between Glasgow and the Scottish Islands. Flights typically run between 7pm to 4am.
In the 1960s the 508 year old company began moving mail via passenger flights from the south east of England to Scotland, Northern Ireland and Ireland. However, they found the schedules too restrictive. In 1979, it opened a small hub in Speke, Liverpool for chartered flights. It grew rapidly, from 600 postbags per day to 6,000 in two years.
In 1992, a second hub was opened at EMA. 15 planes carried 5,000 bags per night. Skynet was created in the same year to connect hubs across the UK and allow for the movement of mail on larger, fewer aircraft.
In 2003, the company had ceased some air services in a cost-cutting effort of £90m. Three years later, operations at Liverpool and Gatwick were shut down. Later, a move to restrict the speed of heavy vehicles on roads pushed some mail back into the air.
During the pandemic, the company started trials of drone delivery to remote corners of UK including the Isles of Scilly & Shetland Islands. Seidenberg warned that the regulations surrounding drone technology and their limited capacity made widespread use impractical for “mass-production businesses”.
Kretinsky’s EP Group (IDS’s largest shareholder) has bid 370p per share for the takeover of the group. This is an increase from an initial bid of 320p.
Seidenberg who stands to gain more than £5m from the takeover, refused to comment on the deal in detail but did say that Royal Mail will benefit from any potential investment made by EP Group.
He said: “The price increase paid for a share is 73% higher than it was prior to the bid. This is an outstanding achievement.” We must also realize that the company is still undergoing a transformation. Although we’re making progress, it’s important to remember that the transformation has not yet taken place.
This company needs to invest in the future. The Parcelshops and the parcel lockers are where we started, but expanding these networks will require investments. The risk of transformation is never zero. It’s an economic risk.”
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