Royal Mail boss unveils revamp to drag service into 21st Century

Business

Keith Williams is a man of many modes of transport. The corporate veteran spent 18 years at airline British Airways – the final five as chief executive and chairman – and will in the New Year publish his long-awaited review into the rail industry.

Now he is the boss of Royal Mail – and drones are firmly on his radar.

Williams wants to use the unmanned vehicles to fly letters to remote areas in the UK. ‘If you take, say, the Scilly Isles – an expensive piece of water [to cross] – they might be ideally suited to a drone,’ he says.

Planes, trains… and post: Royal Mail chairman Keith Williams is a man of many modes of transport

It’s one of a number of radical ideas that form part of a blueprint being drawn up by the interim executive chairman to modernise the 500-year-old British institution.

Williams is also examining putting barcodes on stamps to make it easier to track letters and parcels. And he reveals to The Mail on Sunday that Royal Mail may soon offer a regular Sunday delivery service. Medicines could also be taken door-to-door by posties on their rounds.

The 64-year-old is, in part, responding to a report by regulator Ofcom last month that showed Royal Mail could save £225million by scrapping Saturday letter deliveries as it would have no significant impact on customers. The company is yet to respond and stresses no decisions have yet been taken.

Williams points out that Royal Mail’s unique selling point is its commitment to delivering post to the entire nation. And it’s clear he intends to double down – albeit not without an extra cost to customers. ‘We will probably need to deliver parcels seven days a week,’ he says.

‘The competition [other parcel delivery firms] already does that. If the customer demand is there then we should meet that.

‘You then get to what is the difference between a parcel and a letter. Ofcom has said five days of letters suits most purposes, if you look at it, that might well be right for the majority of letters.

‘But if people need a premium service for delivery of something, then we should probably deliver it and we should deliver it across the country.’

So is he saying that customers will have to pay a premium if they want their letter or parcel delivered on a Saturday or Sunday?

‘Ultimately, the consumer determines what they want and the price they’re willing to pay for it,’ Williams agrees.

The number of Christmas cards being sent in the post has risen by a tenth this year

It’s been a hectic seven months since he took charge after the ousting of Royal Mail’s German former chief executive, Rico Back, in May.

The second English lockdown in November coincided with Black Friday and early Christmas shopping. Covid-19 restrictions are also set to boost the number of Christmas cards being sent by 10 per cent this year, Williams says.

Royal Mail has hired an extra 33,000 Christmas workers to handle demand – more recruits than the Royal Navy – as parcel revenues outstrip letters for the first time.

But it may still not be enough. Social media is already teeming with complaints of late deliveries. Williams has hastily signed up for extra capacity in Northampton and Milton Keynes: ‘We’ve got temporary warehouse space that we’ve brought online very quickly because just the sheer volume of parcels coming in has been difficult to cope with.’

We meet at Royal Mail’s deserted shared offices which overlook the Thames. Williams, who sports a wild crop of grey hair, has a surprising touch of the kindly uncle about him for a FTSE boss, lightly discussing how he likes to plane-watch from his home in Windsor.

His office feels like a tribute to a former lover: his high-vis British Airways jacket with ‘The Guv’ on the back is slung over a chair and an old stamp carrying an image of Concorde is blown up on the wall.

As we talk, the link between the two businesses becomes clear. Williams arrived at BA 12 years after its privatisation; Royal Mail floated on the stock market only seven years ago now, in 2013.

‘The business here reminded me very much of BA in 1998 – too many people involved in each decision so things were being visited and revisited all the time rather than getting on with stuff,’ Williams says.

‘The rapid growth in parcels has created an enormous opportunity for Royal Mail in the UK but we’ve just not been well positioned to take advantage of it – and that’s the short and medium-term challenge for the UK business.’

Key to Williams’ mission is modernising Royal Mail’s working practices. He cuts an exasperated figure when describing how staff clock on and off and enter payroll data manually. His plan is to use scanning systems to automate processes to analyse how posties can take more efficient routes.

The overhaul is at the heart of a long-running battle with unions, who are worried about staff layoffs and tracking.

‘If you’ve finished your route and come back and scan out 20 minutes early this isn’t about trying to dock your pay for that 20 minutes, it’s giving us the intelligence to know what your walk has looked like,’ he says.

‘This is not about monitoring their every movement.’

The good news is that union sources describe relations with Williams as much better than under Back – even after 2,000 management jobs were cut this year amid a slump in letter volumes.

Williams says he only joined the Royal Mail board in 2018 as a part-time gig to fill the void after stepping down as John Lewis deputy chairman. ‘I never really anticipated being where I am today,’ he admits.

But he says he felt Back – who wanted to push Royal Mail towards parcel deliveries – needed to go because ‘we needed more pace in the business’.

It was the right idea, Williams says, but Back was acting too slowly and if modernisation can now be sped through, more roles can be created.

Royal Mail is spending £300million on parcel hubs which are now being built in the North West and the Midlands, with the first due to open in 2023. There’s another £50million being spent on upgrading posties’ handheld devices.

Interviews for the new chief executive are in their final stages and both external and internal candidates are being considered. The role is currently held by interim chief executive Stuart Simpson. I wonder whether Back, who was in Switzerland at the time, got the sack over video conference call? ‘I didn’t do it by text!’ Williams laughs.

And what about his largest shareholder, Czech energy tycoon Daniel Kretinsky, who has steadily been building up his stake this year?

Williams seems unperturbed and says he and Kretinsky want the same thing: ‘That we manage the business effectively both in the UK and internationally.’

With Amazon and rival couriers rapidly encroaching on Royal Mail’s market share, you can see why Williams is keen to act fast.

WILLIAMS IS PLANNING TO SHAKE UP RAIL FARES TOO
Royal Mail boss Keith Williams says his report into the future of Britain’s rail industry is likely to be published in ‘January or February’.

The transport nut argues that fares reform is urgent; that the franchising system has ‘been through its lifecycle’; and that the industry needs to become less ‘fragmented’ because that is ‘creating inefficiency’.

He was tasked with a review of the rail industry by the Government in 2018.

Ministers have spent £4billion keeping the trains going during the pandemic and Williams says they now have the perfect opportunity to revamp services ahead of commuters returning to work. He adds: ‘The single largest challenge is going to be bringing people back to rail – reflecting the way in which they’re going to commute and work in the future.’