Since last summer, the transport sector has been dominated by one thing: strikes. Passengers and parcels have repeatedly ground to a halt, and concerns about low demand have been overshadowed by fears that businesses won’t have enough staff to function.
Royal Mail is an obvious starting point in the world of industrial transport. The courier’s parent company, International Distributions Services (IDS), reported a £57mn operating loss in November, down from a £404mn profit the year before. This doesn’t convey the scale of Royal Mail’s problems, however – the figures are flattered by the group’s international business, General Logistics Systems (GLS).
Royal Mail itself banked a £219mn operating loss, driven by weak parcel volumes, failure to deliver productivity improvements and mass walk-outs. It’s unclear when any of these things will improve and, in the meantime, the business remains highly operationally geared. It is very possible, therefore, that it will spiral into further losses. If – as threatened – management does separate profitable GLS from Royal Mail, things could get even worse.