The Royal Mail share price, also known as International Distributions Services PLC (LON: IDS), traded sideways despite losing out on a potential contract with the British Post Office service. Earlier today, the Post Office announced a new agreement with DPD to launch an online parcel service.
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The lack of a significant reaction from investors, as seen in the sideways trading action witnessed in Royal Mail (LON: IDS) shares, indicates that many were not surprised by the new partnership.
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The deal with DPD is not the first one between the companies since they launched a Click & Collect service in 2021. The partnership, Parcels Online, will allow customers to select and pay for UK and international parcel services online, with parcels dropped off at their nearest Post Office branch.
The Parcels Online service will first be available at 3,600 Post Office branches before expanding to 4,000 branches later in the month. This is just one of many contracts that Royal Mail has lost out to its rivals due to past strikes that crippled the company’s operations for months last year.
The future of Royal Mail hangs in the balance after the company failed to meet its delivery targets in all postcodes, indicating that its performance is lacking. Stiff competition from other parcel delivery firms has seen the company lose market share in every UK postcode it serves.
Recent reports from company sources indicate that Royal Mail lost a tenth of its business to competitors due to the strikes organised by the CWU last year. The insiders also confirmed that the next three months will be crucial for the company as it looks to reposition itself as a more competitive player in the cut-throat parcel delivery industry.
Neill O'Sullivan, Post Office managing director of parcels and mail, said: “A significant proportion of the consumer parcels market is now purchased online, and we want to be present in that space, with a competitive and appealing offer. I believe Parcels Online is further evidence of our commitment to innovate, invest in new solutions for our customers, drive footfall and remuneration opportunities for Postmasters as well as ensure we remain competitive in this market.”
The Royal Mail (IDS) share price.
The Royal Mail (LON: IDS) share price traded sideways today despite losing the Post Office as a client.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.