Jump to content
House Price Crash Forum
Saving For a Space Ship

Whistl Suspends Delivery Service - 2,000 Jobs At Risk (Tnt Goes Bang)

Recommended Posts

Whistl suspends post delivery service putting 2,000 jobs at risk

http://www.bbc.co.uk/news/business-32686828

Surely not in the ever expanding internet retail age?

Postal business Whistl - formerly TNT Post - has suspended its door-to-door delivery service in London, Liverpool and Manchester and is consulting 2,000 workers on redundancy.

The move follows a decision last month by potential investment partner LDC not to fund its expansion plans.

Whistl will continue to provide a service, but will revert back to using the Royal Mail for the "final mile".

Shares in Royal Mail rose 3.3% after the news was announced.

Last month, LDC, a division of of Lloyds Banking Group, decided against investing in Whistl because of "ongoing changes in UK postal market dynamics and the complexity of the regulatory landscape".

At the time, Whistl said it would hold back from expansion but planned to continue its existing service.

Whistl said: "Following the announcement from LDC that it would not proceed with the proposed investment... to fund further rollout of E2E [end-to-end] we have now commenced an extensive review of the viability and potential for the rollout of an e2e postal delivery service in the UK."

Zero hours

Whistl said it would begin consultations with employees affected by the suspension of the end-to-end service, and with their union representatives.

The Manchester Evening News carries what it says is a copy of the letter to employees, which says most of the staff were on zero-hours contracts and will not be paid during the consultation process.

Community, the recognised trade union at Whistl, says its members are "extremely worried for their futures"....

Edited by Saving For a Space Ship

Share this post


Link to post
Share on other sites

How long since City Link?

Is this an industry with a serious overcapacity problem?

Is it the most inefficient companies who are dropping out, or is the Zombie Economy propping up the living dead at the expense of the operationally-efficient?

Share this post


Link to post
Share on other sites

It's only the "final mile" services from the depot to the door that they're axing.

They'll go back to their former system of using the Royal Mail to bring you your junk mail (and occasional useful correspondence).

Share this post


Link to post
Share on other sites

Just to be clear this isn't TNT

TNT sold its logistics business sometime ago and that is now known as CEVA

TNT de-merged its Universal Post Service and this is currently known as Whistl, it was up for sale?

All that is left of TNT is TNT Global Express however that may have some of the tech problems that City Link had.

Royal Mail was only saved because it took over the Universal Parcel Post from Parcelforce after the Letters business basically crashed and burned. Parcelforce now only concentrates on Express Parcels.

If you thought there was a trend with downsizing then think again, look at DHL a massive company owned by Deutsche Post DHL everything from Express Parcels through logistics to operating third party warehousing for the biggest retailers

Share this post


Link to post
Share on other sites

I would suspect that the parcel delivery industry is similar to the utilities in that the economies of scale achievable within the network result in increasing economies of scale and hence constantly declining marginal costs of production - in essence a natural monopoly.

As such it seems likely that one, or at most two, carrier networks will emerge from this period of industry consolidation. The industry itself isn't "sick" - it's just responding to market forces and consolidating around one or two large players.

Share this post


Link to post
Share on other sites

I would suspect that the parcel delivery industry is similar to the utilities in that the economies of scale achievable within the network result in increasing economies of scale and hence constantly declining marginal costs of production - in essence a natural monopoly.

As such it seems likely that one, or at most two, carrier networks will emerge from this period of industry consolidation. The industry itself isn't "sick" - it's just responding to market forces and consolidating around one or two large players.

Doesn't quite fit the facts. If there were no trouble (most likely overcapacity) in the industry, then the failing companies would leave a gap for someone else to fill. Meaning there'd be buyers for the assets, including of course a new employer for the workers.

Share this post


Link to post
Share on other sites

Doesn't quite fit the facts. If there were no trouble (most likely overcapacity) in the industry, then the failing companies would leave a gap for someone else to fill. Meaning there'd be buyers for the assets, including of course a new employer for the workers.

The reason that there are (unfortunately) no new employers for the workers, or buyers for the assets is that the competitors already have a fully built out network and don't need the extra capacity to take on the incremental turnover.

The fixed costs in running a nationwide parcel delivery service must be huge, but once you've paid them the incremental cost for delivering one more parcel is tiny. The point I was trying to make is that it is almost inevitable that this sector will be dominated by one or two very large players. As a result the activity we are are seeing in terms of corporate failures is probably more to do with the internal economics of the sector that wider macro-economic issues.

Share this post


Link to post
Share on other sites

The problem with a lot of these large corporate logistics operations, and the entities that own and run them, is they what they leverage is not slick, lean, efficient and well marketed business operations. Instead their, pretty much only, strength is their ability to access large amounts of cheap finance and funding.

Similarly, if you built a really slick robot automated e-commerce operation. It sounds like a great idea but it's probably not nearly as advantageous as making your base of operations, for tax purposes, Luxembourg. And even with your vastly superior automated warehouse in an internecine price war with Amazon you'd probably still run out of money before they'd run out of access to finance and funding.

Edited by SNACR

Share this post


Link to post
Share on other sites

Just to be clear this isn't TNT

TNT sold its logistics business sometime ago and that is now known as CEVA

TNT de-merged its Universal Post Service and this is currently known as Whistl, it was up for sale?

All that is left of TNT is TNT Global Express however that may have some of the tech problems that City Link had.

Royal Mail was only saved because it took over the Universal Parcel Post from Parcelforce after the Letters business basically crashed and burned. Parcelforce now only concentrates on Express Parcels.

If you thought there was a trend with downsizing then think again, look at DHL a massive company owned by Deutsche Post DHL everything from Express Parcels through logistics to operating third party warehousing for the biggest retailers

I thought DHL had made an exit from quite a few sectors over the years. Pretty sure some parcel divisions and container road logistics plus some others.

Share this post


Link to post
Share on other sites

I thought DHL had made an exit from quite a few sectors over the years. Pretty sure some parcel divisions and container road logistics plus some others.

They still own Excel www.exel.com/exel/exel_about_exel.jsp and run warehouses for big retailers, they have a sizable presence at DRIFT in Northants, they have recently put in planning permission to expand their already massive hub at East Midlands Airport

Share this post


Link to post
Share on other sites

The reason that there are (unfortunately) no new employers for the workers, or buyers for the assets is that the competitors already have a fully built out network and don't need the extra capacity to take on the incremental turnover.

The fixed costs in running a nationwide parcel delivery service must be huge, but once you've paid them the incremental cost for delivering one more parcel is tiny. The point I was trying to make is that it is almost inevitable that this sector will be dominated by one or two very large players. As a result the activity we are are seeing in terms of corporate failures is probably more to do with the internal economics of the sector that wider macro-economic issues.

we could sort all this out, rather than having a battle of the fittest, by organising a national postal organisation, maybe with convenient places to leave letters for collection, have them picked up, sorted and delivered to the door of the recipient...just a thought.

Share this post


Link to post
Share on other sites

With reference to my comments about DHL, Excel is still a trading name in North America, in the UK it is now known as DHL Supply Chain although some warehouses still have the Excel 2 branding, DHL also operates another company in the UK called Williams Lea which deals with BPO

Edited by Hectors House

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   90 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.