"It’s sad news that Whistl has blown time on its door-step letter service and is consulting 2,000 workers on redundancy," commented ParcelHero spokesman David Jinks MILT. "The traditional door-to-door letter service is a labour intensive low-margin market in which it’s hard to make money.
"Even though Whistl cherry-picked the market, choosing to deliver only in areas such as London, Liverpool and Manchester, it has still found the going tough. Very recently Whistl was forced to pull out of plans to extend its daily postal delivery services to Edinburgh, Glasgow and Birmingham, after potential investors LDC (an arm of Lloyds Bank) decided against investment in the company."
LDC say they pulled out because of "Ongoing changes in UK postal market dynamics and the complexity of the regulatory landscape." Whistl will continue to provide a service, but will revert back to using the Royal Mail in the run up to the closure of door-to-door deliveries.
"On the face of it this seems good news for the Royal Mail, who have been complaining loudly about having to deliver letters to the Highlands and islands for the price of a stamp while Whistl supposedly creamed the profits from the most profitable areas," Jinks added. "However, it does highlight the problems underlying the entire door-to-door postal services industry in the era of emails and the internet. Very low margins and an increasingly creaky infrastructure mean that the traditional postal market faces an uncertain future.
"It’s ironic that the parcels market ParcelHero operates in is booming as a result of the growth of internet based e-commerce, but the same technology is effectively sounding the death knell for the traditional door-to-door postie service," he concluded.