Post Office to abandon parcels?
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• Parcels carriers were in a flurry of ''Speculation this week following reports that the Post Office may pull out of the • unprofitable parcels traffic, Last year PO parcels are said to have lost £7m. In an effort to induce the striking post office workers to return to work or submit the pay dispute to arbitration, post office mandarins have been thinking aloud about the strike's effects on commercial viability of the postal services.
Said a Post Office spokesman last weekend of the possible ending of parcels post: "We are considering whether in fact it will be necessary in view of other means of transportation of parcels, by carriers, British Rail, air freight, and so on."
Almost immediately British Railways announced that they would be 'quite happy" to take over part of the parcels service if the Post Office went ahead with the idea of scrapping it.
Mr Geoffrey Vieler, managing director, Posts and Giro, talked of an investment of £18m on parcels mechanization as recently as January 11, when he addressed the Institute of Transport. New parcels sorting arrangements involving distribution by a road fleet designed for container operations would add some 1000 vehicles to the current Post Office fleet. This increase in assets "could well be exploited to bring us an increased share of the parcel market", said Mr Vieler. "In particular we shall have greater flexibility for breaking into the bulk point-to-point market, which appears to be highly lucrative to our competitors."
It may be surmised that British Railways, whose express parcels service is also thought to be in the red, would like to handle the dense inter-city parcels flows. Other public and private parcels carriers would no doubt be candidates for the heavily trafficked inter-city parcels. services. But it is highly doubtful if the Governmeni would conhive at a hiving-off of th( profitable sectors of Post Office parceb services if the result for people in remot( areas was a Penally expensive service.
Equally, # may be doubted whether roar or rail transport unions would co-operate ir a major re-distribution of parcels within tin state sector.
Note: Parcels integration was discussec in Management Matters, January 29.