Royal Mail launches 72p parcel collection service

LaToya Harding
·Contributor
·2 min read
A Royal Mail postal van is parked outside homes
Royal Mail's Parcel Collect service will rival the likes of DHL, Hermes and DPD. Photo: Luke MacGregor/Reuters

Royal Mail (RMG.L) has revealed that it will start picking up parcels from people’s homes as online shopping continues to boom throughout the coronavirus pandemic.

The British postal firm, which is on track to make a loss for the year, is aiming to capitalise on the rising trend by charging 72p per parcel collection on top of standard postage costs.

Pre-paid return packages will be charged at 60p per item and it will collect up to five parcels per address, subject to limits of 61cm x 46cm x 46cm in volume and 20kg in weight.

The Parcel Collect service, which will rival the likes of DHL, Hermes and DPD, has been trialled in the west of England and will be available every day except Sunday.

Customers can only make bookings via Royal Mail’s “click and drop” online service, or by using the Royal Mail app, up to five days in advance until midnight on the day before collection.

The service will provide collection slots of between two and four hours and items will be collected from the door or from a safe place chosen by the customer.

Royal Mail said it was “one of the biggest changes to the daily delivery since the launch of the post box in 1852.”

Watch: Why a lot of Americans are starting their holiday shopping early this year

READ MORE: Royal Mail fined £1.5m for late first class letters

Nick Landon, chief commercial officer at Royal Mail, said: “Parcel Collect is a fantastic step forward for all of our customers. It makes it easier to use our services than ever before.

“The launch of Parcel Collect is part of our commitment to continuously make our services better and more convenient.”

Last month, the company said it expects to make a “material loss” in 2020 despite parcel deliveries rising by more than a third during lockdown.

Royal Mail, which was privatised in 2013, has suffered from rise in additional costs to cope with the pandemic and a continued decline in letter deliveries
Royal Mail, which was privatised in 2013, has suffered from rise in additional costs to cope with the pandemic and a continued decline in letter deliveries. Chart: Yahoo Finance UK

Royal Mail, which was privatised in 2013, has suffered from a rise in additional costs to cope with the pandemic and a continued decline in letter deliveries. In the three months to June, it delivered 788 million fewer letters compared to the same period a year ago. This represented a 33% fall.

In July, the company announced a cut of 2,000 management jobs in a bid to save £130m ($169.8m).

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “The move has potential in our view, allowing the group to put more volumes in more rural areas where the universal service is more costly to deliver.

“However, there will be challenges too — not least in additional infrastructure expenditure and initial operational complexity.”

Watch: Coronavirus restrictions tighten in London