Postal strike chaos predicted – Nov 19

Following the recent announcement that the Royal Mail would be holding strikes in the lead up to Christmas, we worked with our client, BearingPoint to publish an analysis on the impact on the retail sector if the Communications Workers Union (CWU) opted for a Royal Mail strike to coincide with Black Friday.

This analysis found that a Black Friday strike will force retailers to attempt to pass on 8.5million parcels, or 105,000 van loads of parcels to other parcel carriers – which could cost them millions in higher postal costs.

BearingPoint, that advises many of the UK’s top ten retailers on their operations (incl. their supply chains and logistics), also warned that other parcel carriers may not cope – as they don’t carry the level of additional capacity or infrastructure to respond to a strike at such short notice. The analysis was covered by Charged Retail, Retail & Leisure International, The Retail Technology Innovation Hub, The Retail Gazette, Logistics Manager and Handling & Storage Solutions.

The analysis also said that millions of retail orders will remain undelivered until after the strike ends, or parcels that can be delivered by other parcel carriers will cost retailers significantly more. For instance, even if carriers could deliver around half of the Royal Mail parcels (circ 4million parcels) from Black Friday, this could cost them an additional £8million – something which would be impossible to recoup from customers.

Stuart Higgins, a Partner at BearingPoint said:

“A Black Friday strike could represent a major threat to UK retail at a time when the sector is desperate for a much-needed sales boost following a very lacklustre performance this year. Let’s not forget that this final quarter of the year is the biggest single sales period by far for UK retail and the majority of UK retailers generate all their annual profits during this three-month peak period, which includes the critical Black Friday / Cyber Monday weekend.”