Royal Mail sees four-day delivery delay as 115,000 staff strike

Royal Mail Plc said letters and parcels due for delivery Friday may not arrive until Tuesday as 115,000 postal workers strike in the biggest single action of Britain’s summer of labor unrest.

The walkout means regular post won’t be processed until Saturday, when mailings from the National Health Service and other public bodies will be given priority, according to a company spokesperson. Monday’s national holiday will reduce deliveries and add to the period required to catch up with the backlog, he said.

Items sent using the Special Delivery and Tracked24 services, along with Covid-19 test kits and medical prescriptions, should still arrive on time as 4,000 middle managers are drafted in to maintain some deliveries.

Royal Mail is one of Britain’s largest private-sector employers, with Friday’s strike over pay and restructuring proposals involving more than twice as many people as recent actions on the rail network. Three more daily walkouts are planned, one next Wednesday and two the following week, while the Communication Workers Union holds a mandate for further action.

The dispute may prove to be among the most intractable of Britain’s so called summer of discontent, with workers’ demands for higher wages amid spiraling inflation being met by management calls for fundamental changes to delivery schedules and working practices.

Royal Mail, which traces its history back more than 500 years and was listed on the London Stock Exchange in 2013, is seeking a revamp after the Covid crisis accelerated a trend for online shopping, spurring parcel deliveries as a slump in letter volumes continued, so that packages now account for 60% of business.

While the company has invested £900 million ($1.1 billion) in new infrastructure, it says old ways of working are holding it back, with losses running at £1 million a day as the boost from the pandemic eases.

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Royal Mail has granted staff a 2% raise and is offering a 2% productivity bonus plus 1.5% based on an agreement on changes to the business. The CWU says the settlement was imposed on members and is “derisory” when set against inflation and the windfall gains seen by the company during coronavirus lockdowns.

Chief Executive Officer Simon Thompson says he’s ready to discuss a higher settlement if the the union agrees to significant reforms, though the last formal talks ended several weeks ago.

“What we’ve been trying to do for over four months is to talk about the change we need to win in the market and to pay our team more,” he told Times Radio Friday. “We have working practices that are based on our letters history and we need to change those so that we can compete in the parcels market.”

Thompson has said that Royal Mail could be split in two, with the UK arm separated from the profitable international logistics unit if unions continue to frustrate efforts to reorganize.

Royal Mail has separately become an investment target for Czech billionaire Daniel Kretinsky as he moves to raise his stake above 25%. The step will trigger an inquiry under the UK National Security and Investment Act, the company said in a statement Thursday.