Royal Mail boss Simon Thompson is reinventing a poster for the Internet age

Mailboxes up and down the country are sporting crocheted “tops” of Queens, crowns and korgis to celebrate the Jubilee.

But Royal Mail, now a stock exchange with thousands of small investors, traces its history back to a much earlier monarch, Henry VIII, who appointed Sir Brian Tuke as the first “Master of the Post Office” in 1516. Now, under its new chief executive Simon Thompson, the business is at a crossroads because the use of letters is declining away in the digital age.

The postal service is a minor miracle that we take for granted, says Thompson. Among them, Royal Mail’s 90,000 posts go more than a billion steps a day, delivering 31 million addresses.

On a mission: Simon Thompson says he invests in automation and people

– You can put something in one of our 110,000 mailboxes and it will reach its goal. It’s an achievement, it’s amazing. ‘

Either way, being Britain’s top job is no easy task.

The challenge proved too much for Thompson’s predecessor, German businessman Rico Back, who quits after a contentious battle with the unions. Revelations in the Daily Mail that Herr Back ran the company for his £ 2.3 million home with a view of Lake Zurich in Switzerland during the Covid crisis did not help.

Thompson, 55, whose previous roles include senior positions at Ocado and HSBC, took over earlier last year.

The grandson of a Darlington miner in County Durham, he is neither distant nor grand.

Finding himself unable to hire a car for a business trip from Hereford to Llandrindod Wells during the pandemic, he drove a red pickup truck rather than resorting to a driven limousine, somewhat to the indignation of Brian, its usual driver.

He also enjoyed a delivery circle in his hometown. It became a memorial trip when it included the terraced houses of Falmer Road, where his paternal grandfather “Tot” Thompson, who was very loyal to the leader of former miners Arthur Scargill, lived.

– I called my mom to tell her. She said, ‘Don’t you have people to do this for you?’ ‘

Joking aside, Thompson has his work cut out. He is up against sharp competition, endless industrial disputes, falling stock prices, a billionaire Czech investor with a very large investment – oh, and pressure for greener deliveries.

This week, he will launch a new environmental plan to advance Royal Mail’s net zero carbon emissions target from ten years to 2040. The aim is to significantly reduce the average emissions per package delivered in the UK – about the same as making a cup. of tea with milk.

But green ambitions, while important, will not be enough to secure the future of Royal Mail. Royal Mail formally broke up a decade ago from the Post Office and it is the latter, not the business run by Thompson, which is hit by a strike action this weekend.

Similarly, Royal Mail is not involved in the damage scandal that engulfed the Post Office due to former postmasters who were wrongly accused of fraud.

The company needs to gain the support of its staff for the modernization plans to succeed. “Last year, our disputes dropped by 75 percent – we’re excited about that,” Thompson says.

‘Our people face the same pressures of cost of living as everyone else, but it’s not just about pay, it’s about the change that will fund the pay rise. There are our discussions with the unions. ‘

At the heart of Thompson’s dilemma is that the golden age of the letter, featured in WH Auden’s famous poem Night Mail in 1936, is far from over.

The handwritten epistles of that era – ‘The chattering, the cathartic, the boring, the adoring / The cold and official and the outpouring of the heart’ – are, much less evocatively, typed and frothed through the ether by e-mail.

“In 2004-05 there were 20 billion letters sent, and now it’s 8 billion,” says Thompson. – The trajectories are really clear. More than half of our income is now from luggage. We are a parcel business that also makes letters. In the psyche of the company, it’s a huge change. ‘

Will customers have to pay more? The price of a first-class postage stamp has recently been raised by 10p to 95p and a second-class stamp has been increased by 2p to 68p. Thompson admits that more prices may come.

“With the inflation reality out there, we’re just going to have to keep looking at it,” he says.

He holds a stand at Mount Pleasant in London, a former Victorian prison that now serves as the main post-processing center for the capital. New sorting machines are being installed with an intelligent conveyor belt system and scanning technology. It is part of a multi-million pound investment program, aimed at 90 percent parcel automation by 2023-24.

Lady: The Queen decorates postcards across the country

Lady: The Queen decorates postcards across the country

‘This machine,’ he says, ‘is capable of making 7,500 packages an hour with ten operators. By manual processing, it would be about a third of that. ‘

Won’t some employees lose their jobs because of the changes?

‘We invest in automation as well as in people. It requires fewer people, but in terms of protecting jobs in the future, it is positive because it makes the business more sustainable. ‘

The set of delivery vans becomes electric as part of the push towards greening. ‘By spring next year, we’ll have 5,500 electric vehicles, more than one in ten,’ Thompson says. ‘The cost of fuel is 73 percent lower and maintenance 37 percent lower.’

The company has also tested electronic tricycles and golf cart electric vehicles as well as drones, which will first focus on island communities on Scillies, Shetland, Orkney and Hebrides.

Boots on the ground are still the greenest of all, says Thompson. – We love that the mail is on foot. We go everywhere every day. ‘

Royal Mail floated on the stock market in 2013 and about 20 per cent of its share capital is owned by small investors and employees.

They have to grind their teeth that the stock has plunged nearly 43 percent this year, after climbing into the pandemic. Not only are they continuing below the current price of £ 3.30, but the company has also recently been ejected from the elite FTSE100 Index of leading stocks.

Thompson won’t be drawn to stock performance, saying “we’re changing the business so we can compete, and that’s what I’m focusing on”. Nor will he discuss the share held by Czech businessman Daniel Kretinsky, who owns about 20 percent of the shares.

Would it matter if Royal Mail were taken over by a foreign predator and lost its identity as an independent British business?

‘Those thoughts don’t cross my mind. I have to reinvent Royal Mail for the next generation, that’s what I’m worried about. I don’t believe that Royal Mail has a divine right to exist, not at all, although I do believe that it is a company that society wants to exist. ‘

We could all send fewer letters, but if he could send one to anyone, living or dead, who would it be? ‘My grandfather,’ he says.

‘I’d probably ask him,’ Tot, what do you think of what I’m doing? ‘ I would ask him if he was okay that I was in administration. I’m not sure he would be. ‘

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