British postal company Whistl is officially terminating its small loss-making final-mile delivery operation, which it already suspended last month, and will focus on core mail and parcel services in future, leaving Royal Mail with a de facto monopoly on letters delivery in the UK.
The widely-expected move, with 2,000 job losses in London, Manchester and Liverpool, comes after a potential financial backer for the planned national rollout of end-to-end (E2E) services pulled out due to changes in British regulatory and market conditions.
Whistl’s owner, Dutch group Post NL, confirmed in a statement that it had “assessed alternative scenarios for Whistl’s E2E operations” and had decided to end these E2E operations. The withdrawal will cost PostNL an estimated €25 – 30 million, which will be booked as a one-off cost.
Whistl, the second-largest postal operator in the UK, remains committed to further developing its successful activities, including downstream access (DSA) service, door drop media, packets & parcels and logistics, the Dutch company emphasised. The company collects and sorts over 80 million items of mail a week, accounting for 55% of the DSA market. The delivery business handled only about 3 million letters a week.
Whistl UK added separately that “the PostNL and Whistl management team have undertaken a thorough strategic review of the E2E operation and have concluded, unfortunately, that there is no viable alternative solution that will ensure a sustainable future for the current service and therefore it will not continue”. It explained that the rollout of E2E was put on hold due to numerous regulatory issues, which “impacted on our ability to invest in the service, expand our coverage, and ultimately to meet the targets of the original business plan and deliver a long term sustainable service".
The company said it is in consultations with the affected employees through their union and employee representatives, and “hopes workers will be able to find new jobs very quickly”.
In 2014, Whistl increased its revenues by 3.2% to €753 million but its profitability was impacted by start-up losses related to the end-to-end services.
