Tour of Royal Mail Logistics function

Transcription

1 Tour of Royal Mail Logistics function Euan McMurdo Logistics Director 13 June

2 Disclaimer This presentation is being provided for informational purposes only. None of Royal Mail plc, its affiliates or their respective directors, officers and employees shall accept any liability whatsoever for the consequences of any reliance upon or actions taken based on any of the information in this summary. This presentation contains various statements and graphic representations (together, forward-looking statements ) that reflect management's current views and projections with respect to future events and financial and operational performance. The words target, objective, growing, scope, platform, future, forecast, expected, estimated, accelerating, expanding, continuing, potential, sustainable and similar expressions or variations on such expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements or graphic representations are made. These forward-looking statements, as well as those included in any other material discussed as part of this presentation, involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond Royal Mail Group's control and which may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. All statements (including forward-looking statements) contained herein are made as of the date of this presentation and Royal Mail Group disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. This presentation does not contain or constitute an invitation, inducement or offer to underwrite, subscribe for, or otherwise acquire or dispose of any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

3 Our core network handles c.14 billion letters and over 1 billion parcels a year, delivering to more than 30 million addresses, 6 days a week Collections Outward Processing National Logistics Inward Processing Delivery Upstream International Hub Downstream International Hub Post Offices c.11,700 Post boxes c.115,000 Collection Hubs c.1,000 Walk Bundling Centres (Unaddressed Mail) Outward Mail Centres Cross dock at RDCs 37 Direct journeys Inward Mail Centres 37 Local Distribution Delivery Offices c.1,350 HCT and Foot Shared Van Rural Delivery Delivery Points >30m Businesses c.76,000 Regional Distribution Centres (RDCs) 6 Downstream Access Operators Direct Access Customers Dedicated Business Delivery Logistics owned 2

4 Journey of a letter from Land s End to John O Groats Our first class service means delivery next day everywhere Delivered to customer by 4pm John O Groats Arrives at Inverness Mail Centre at 4.28am Sorted by 6.10am Arrives at Wick Delivery Office by 9am Arrives at Inverness Airport by 3.25am Arrives at EMA by 12.20am Plane to Inverness Airport departs 1.25am Land s End Collected from postbox by 4pm Arrives at Truro Mail Centre by 6.40pm Arrives at Exeter Airport by 10.20pm Plane to East Midlands Airport (EMA) departs 11.30pm 3

5 Regional Distribution Centre overview Six strategically placed distribution centres manage a full range of parcels and bulk mail customers Rugby National DC New Atherstone site will maximise the capacity for managing increased demand during the Christmas period 4

6 Logistics functional areas Euan McMurdo Logistics Director Dennis Welton Head of Central Postal Control Paul Gatti Fleet Director 110 workshops c.48,000 vehicles Largest vehicle fleet in UK Growing 3 rd party business David Dunn Head of Special Events and Assets 250k wheeled containers (yorks)-500k at Christmas c.4,000 casuals employed at six parcel sort centres Organisation of peak, bank holidays and elections Uniform Wayne Jay National Distribution Director c.6,000 professional drivers 36 national vehicle operating centres (VOCs) 44 regional VOCs 15 trains (60 carriages) Paul Hampson Head of Strategy Design and Network Optimisation Optimisation tools for national and regional distribution Efficiency in transport network 5

7 Wayne Jay National Distribution Director Paul Hampson Head of Strategy Design and Network Optimisation 6

8 Distribution: connecting people and businesses across the UK via our road, rail, air and sea pipelines c.23,000 truck journeys per day from 80 vehicle operating centres 39 flights each day from 14 airports 10 rail services a day from 4 rail terminals 96 sailings a week 7

9 Distribution: covering the length and breadth of the UK to connect processing and delivery sites Progress so far: Route optimisation removed 12.2m miles from network in last three years Introduced national tools and optimisation approach, now extended to regional distribution Maximised utilisation of vehicles Ongoing efficiency harvesting Introduced vehicle tracking Added flexibility - changing profile of fleet from single to double-deck trailers Reduced the number of air services Launched national network reviews since

10 Distribution: covering the length and breadth of the UK to connect processing and delivery sites Next steps: Implement National network review 2018 Continue to review and upgrade our distribution fleet Sale of empty legs to third party customers, reducing empty running and generating income Introduce new air contracts with two suppliers - expanded capacity, improved contingency (Hot Spare). Refurbish and upgrade trains 9

11 Paul Gatti Fleet Director 10

12 Royal Mail Fleet: the largest vehicle fleet in the UK Progress so far: Expanded size 1,200 double deck trailers now in fleet, including 88 extra long trailers Deployed telemetry on all trucks and around 35% of small vans Fitted all newly purchased vehicles with telemetry 100 electric vans now purchased Launched our commercial services internally and externally Established our 3 rd party business Recognised by our peers in the fleet industry by winning a number of awards in , covering service, maintenance and repair, innovation and operations Fleet of the year 11

13 Royal Mail Fleet: the largest vehicle fleet in the UK Fleet commercialisation: Growing our third party business and improving the service delivered to our internal customers Customers include: British Gas Hitachi ARI RAC Autocare offers discounted MOT and services to employees, friends and family Network of 110 workshops and over 1000 technicians 12

14 Fleet innovation Progress so far: In : We saved approximately 500,000 litres of diesel using telemetry. That equates to 1,300 tonnes of carbon dioxide equivalent (CO₂e) Use of air transport reduced to save around 3,000 tonnes of CO₂e per year Emitted 4.8 per cent less CO2e per cubic metre of items carried, compared with the previous year 13

15 Fleet innovation Next steps: Encourage manufacturers to accelerate the production of alternative fuel vehicles Continue to invest in electric vehicles and other innovations, such as: adjustable roof height on trailers dual fuel and gas vehicles Review new safety technology, such as collision prevention and adaptive cruise control Introduce forward facing cameras 14

16 Central Postal Control (CPC): 24/7/365 eyes and ears of the Royal Mail pipeline Based in Camden Control Centre Maximises connectivity for our customers Unique, real-time and detailed Intelligence: Highways England UK Air Traffic Control Network Rail Police Security agencies Tactical network changes to maintain performance Coordinates and leads the response to any actual or potential threats to Royal Mail Group 15

17 Costs avoided UKPIL delivered c. 640m annualised costs avoided over 3 years¹ - ahead of target Collections Processing Logistics Delivery Central functions Network reviews Double-deck trailer plan Streamlining local distribution Telemetry Reducing air costs Improving driver behaviour 1 Cumulative over financial years , and

18 How the Union agreement affects Logistics Catching up with network review Reviewing our legacy agreements Closely working with the CWU to continue to make efficiencies Supporting later acceptance times Implementing shorter working week You can't avoid change that we ve made, it's not a no change agreement, it s how we deal with change Terry Pullinger, CWU Deputy General Secretary (Postal) 17

19 National Distribution Centre 460 operational staff and 22 managers over a 7 day a week operation 210 drivers and 286 duties across the 7 day operation Only Royal Mail site that has an outlet to every operational site in the network Responsible for 60% of the nations quality Last Year NDC cross docked 8,239,704 containers Last year 36,218,932 tracked parcels were processed 18

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