The Royal Mail owner has appointed a new chief executive, who will seek to turn his fortunes around after last year’s protracted industrial dispute helped the group lose £748m.
First on the to-do list for Martin Seidenberg as head of International Distribution Services (IDS) will be finding a new chief executive for Royal Mail, two months after Simon Thompson said he would resign after a two-year battle with the postal workers union.
The former head of GLS, an Amsterdam-based parcel delivery company owned by IDS since 2020, does not technically replace Thompson, but the position he now assumes was created after a shake-up of executive positions.
Seidenberg, 50, joined GLS in 2015 after spending 15 years at Deutsche Post DHL and has been a member of the IDS board since April 2021. He will receive a base salary of £700,000 a year from August, when start working, and you will move to the UK.
It enters the fray at a difficult time for the logistics giant, as Royal Mail had a £1bn loss in the last financial year that was blamed on the strike and low productivity.
The dismal performance led IDS to report a £748m loss for the year to March 26, compared with a £577m profit in the same period a year earlier.
Seidenberg must now appoint the chief executives of GLS and Royal Mail. Thompson officially steps down in October, having taken up the role in early 2021. His reign has been defined by an acrimonious battle with the Communications Workers Union (CWU). ) and difficult appearances before parliamentarians who accused him of “incompetence or disorientation”.
Earlier this month, the workers agreed to a wage deal that could help end the pay dispute, but Seidenberg will still have to mend relations with the CWU and win back the trust of postal staff.
Royal Mail’s total revenue fell 4% in the first quarter and it delivered 10% fewer parcels and 8% fewer letters in the period. GLS had revenue growth of 7.4%.
IDS said the government and Ofcom needed to take “urgent action” to change their service obligation as letter volumes have fallen 30% since before the pandemic.
The company has long argued that the universal service obligation that requires it to provide a “one price goes anywhere” postal service to any address in the UK six days a week is not financially sustainable. The government prevented Royal Mail from stopping mail delivery on Saturdays in June this year.
Royal Mail Chairman Keith Williams said: “Under Martin’s leadership, GLS has grown to account for almost 40% of group revenue and has consistently delivered significant benefits to the group.
“With Royal Mail entering a new phase of its transformation after the vote on the CWU deal and GLS on a positive trajectory, we can move both companies forward under Martin’s leadership to deliver change, growth and value across the group.”
Seidenberg said it was “a privilege to be appointed to lead IDS and ensure that both Royal Mail and GLS reach their full potential.”
He added: “With the Royal Mail brand, the unrivaled scale and the postmen and women who connect every home and business in the country, we have plenty of opportunities ahead of us.
“But we must take advantage of it. By enabling Royal Mail to better meet the changing demands of our customers, we can deliver benefits for customers, employees and shareholders alike.”