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Royal Mail and the Post Office set to end exclusive delivery partnership

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Royal Mail PLC (LON:RMG) is expected to lose its long standing exclusive connection with the Post Office as the latter begins negotiations to unshackle itself from the FTSE 250 post carrier.

According to a Times report, the Post Office is undergoing a process to unwind itself from obligations to only handle Royal Mail letters and parcels, allowing it to handle packages from rival delivery groups such as Amazon Inc (NASDAQ:AMZN).

READ: Royal Mail upgraded to ‘neutral’ by Credit Suisse as pandemic to support positive UK outlook

The end of the exclusive delivery arrangement, which was signed when Royal Mail and the Post Office formally separated around a decade ago, is expected to help the latter rejuvenate its outlets which have been beset by chronic losses and closures in rural locations.

Ending the agreement is expected to allow post offices to become hubs for click-and-collect services as well as pick up and drop off points for parcels as the pandemic drives a surge in demand for home delivery.

Another added benefit could be the removal of multiple competing delivery drivers across Britain’s roads.

Shares in Royal Mail were up 0.1% at 274.9p in early trading on Monday.

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