Royal Mail says strikes have cost it millions

Royal Mail postal worker
Royal Mail postal worker

The owner of Royal Mail says the recent wave of strikes at the postal firm have cost it £200m so far.

The row with the Communication Workers Union over pay and conditions has led to 18 days of walkouts since August.

Royal Mail also said the number of voluntary redundancies it needed to hit job cut targets would be much lower than first expected.

The number would be "significantly" less than the 5,000-6,000 it had forecast last year, it said.

This was due to a combination of the company cutting the number of agency and temporary workers it used, and also down to staff turnover.

Royal Mail is trying to revamp its business as it moves away from delivering letters - which is no longer profitable - to parcel deliveries, which is a growing market thanks to the popularity of online shopping.

As well as dealing with the ongoing dispute with the CWU, this month Royal Mail has also been trying to tackle problems caused by a cyber-attack which meant it was unable to send letters and parcels overseas.

While it is accepting new letters for overseas delivery, parcel deliveries have been disrupted.

On Thursday, Royal Mail said it would resume its International Tracked & Signed as well as International Signed services for parcels and letters to all destinations for business account customers and customers buying postage online.

However, it continued to ask customers "not to submit any new Tracked or Untracked (Standard/Economy) export parcels into our network just yet".

The increasingly bitter dispute with the Communication Workers Union (CWU) has been going on since the summer, and the union has said it will re-ballot for industrial action.

Like other current industrial action, such as the disputes in the NHS and at rail operators, pay is a key issue, with workers seeking wage rises as the cost of living soars.

Inflation - the rate at which prices rise - is currently at the highest level for about 40 years.

Royal Mail has offered a pay package it says is worth up to 9% over 18 months - but the CWU wants more given the rate of inflation.

The union also objects to proposed changes to working conditions, such as ending a number of allowances and the introduction of compulsory Sunday working.

Royal Mail owner International Distributions Services (IDS) said that up to 12,500 CWU employees had returned to work on strike days. About 115,000 CWU workers have been involved in the walkouts.

It also said that "robust contingency planning" meant it delivered more than 110 million parcels and 600 million letters in December.

However, IDS said the letter and parcels business had lost £295m in the nine months to the end of December.

Revenues in the nine-month period fell 12.8% from the year before. This was partly down to the strike action but also caused by a continued fall in the number of letters being sent and "weaker retail trends".

IDS said that despite there having been more strikes than it expected, it still expected annual operating losses to be between £350m and £450m for the full year.

However, it added this forecast assumed no further days of strike action in the January to March period, and that the "CWU accept a pay settlement in line with the best and final pay offer".

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