The owner of Royal Mail has appointed a new chief executive, who will seek to turn around its fortunes after last year’s long-running industrial dispute helped push the group to a £748m loss.
The first thing on the to-do list for Martin Seidenberg as head of International Distributions Services (IDS) will be finding a new Royal Mail chief executive, two months after Simon Thompson said he would step down after 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 role he is now taking on was created after a reorganisation of executive jobs.
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 be paid a base salary of £700,000 a year from August, when he starts the job, and will move to the UK.
He enters the fray at a challenging time for the logistics giant as Royal Mail made a £1bn loss in the last financial year that was blamed on strike action and poor productivity.
The dire performance led IDS to report a loss of £748m for the year to 26 March, compared with a profit of £577m for the same period a year earlier.
Seidenberg must now appoint chief executives for GLS and Royal Mail. Thompson officially steps down in October, having taken up the post in early 2021. His reign has been defined by an acrimonious battle with the Communication Workers Union (CWU), and difficult appearances before MPs who accused him of “incompetence or cluelessness”.
Workers earlier this month accepted a pay deal that could help draw a line under the pay dispute, but Seidenberg will still have to mend relationships with the CWU, and regain the trust of postal staff.
Royal Mail’s total revenue fell by 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 its service obligation as letter volumes have fallen 30% since pre-pandemic.
The company has long argued the universal service obligation requiring 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 delivering post on Saturdays in June this year.
Royal Mail’s chair, Keith Williams, said: “Under Martin’s leadership, GLS has grown to nearly 40% of group revenue and it continuously delivered significant profit to the group.
“With Royal Mail entering a new phase of its transformation after the ballot on the agreement with the CWU, 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 Royal Mail’s brand, unrivalled scale and postmen and women connecting every household and business in the country, we have plenty of opportunity ahead of us.
“But we must seize it. By enabling Royal Mail to best serve our customers’ evolving demands, we can deliver benefits for customers, employees and shareholders alike.”
