PFW: Building the Future

With the rise in both domestic and international online shopping, we’re seeing rapid growth in the parcels market. These volumes are only going to keep rising and our customers' expectations are changing too. Across the world, people want their parcels faster and with more convenience. The size of the items being shipped is increasing, and we are seeing more products with complex needs wanting to be delivered. 

Royal Mail Group, inclusive of Parcelforce, has the potential to be the best in the industry, offering products and services for parcels of all sizes. To do this we must evolve to meet the demands of our customers and exceed what our competitors offer. 

However, despite a strong 2024, Parcelforce continues to face key obstacles that prevent us from adapting for our customers: 

• Operating at a loss, with a drop in both revenue and volume, limiting us in being able to invest in our future, 
• Using a product pricing structure that puts us in unnecessary competition with Royal Mail and, 
• Current IT systems that are coming to the end of their life and would cost more than £30 million to replace. 

The need for change is essential, and the Royal Mail Group Executive Board recognises that Parcelforce has a crucial role to play in the future of the group, so have decided to invest significantly in our people and network.

Parcelforce: Building the Future

We are introducing Parcelforce: Building the Future, a programme of work aiming to integrate the strongest capabilities of both Parcelforce and Royal Mail into a combined single network for medium and large parcels. 

The project will allow both companies to work better together and benefit from each other’s strengths. It will give our collective customers a convenient and reliable end-to-end solution for parcels and allow us to grow further opportunities for our people. 

The project has several strands, including:

• Operational interoperability, which will allow all products to be collected, processed and delivered by both networks, increasing the reach of both companies for our customers, and reducing duplication of work. 
• The alignment of the customer offering and ways of working across the Commercial and Operational teams, removing the competition between our companies and helping each to grow.
• Shutting down the Parcelforce legacy IT systems and moving to a common IT platform. This will allow the free movement of parcels between the networks, increased parcel visibility and smoother operating between the companies. 

We are already seeing the shifting of Royal Mail parcel volumes to Parcelforce. The next phase will see the integration and standardisation of Parcelforce and Royal Mail's technology and systems, so we have one shared digital network. 

This change won’t be easy. Through 2025 all our Parcelforce colleagues will need to learn new systems and ways of working but, for the long-term benefit of our customers and our people, we know that we can get this right. 

Watch a video about the project here.

What does this mean for our customers? 

By creating a single parcel network with Royal Mail, our customers will benefit from greater choice, more flexibility and more control. We will be able to create a Parcelforce that has: 

• Improved products and services for our customers across the nation and beyond. 
• Better sustainability with a lower carbon footprint per parcel. 
• Simplified product offering allowing for a better understanding of our pricing model and increased convenience for our customers.

Next steps

Training of all colleagues on the new systems is expected to take place from April 2025, with the deployment of the new ways of working rolling out between June to September 2025.

We will be working closely with both our trade unions and colleagues across Operations and Commercial to ensure you have the support and training our Parcelforce colleagues need to make this transition as smooth and successful as possible. We are committed to communicating regularly and providing opportunities to feedback.

We’re excited to start this next chapter for Parcelforce. Together we believe we can become the industry leaders and experts in the parcel market, build a company that is even more trusted and valued by its customers and provide new opportunities for our people.