POST-EVENT ARTICLE

Inside Royal Mail’s Bold Linehaul Revamp: The Hidden Power of the Middle Mile

As the logistics sector navigates waves of disruption - from evolving customer expectations to automation and regulatory reform – Nick Dunn of Royal Mail and Bob Black of Blue Yonder came together at Leaders in Logistics: Last Mile to share how data, technology, and people are driving transformation at scale.

Serial waves of disruption have reshaped the logistics landscape in recent years, from shifting customer expectations and the rise of marketplaces like Amazon and Temu to intensifying competition and the march of automation. In response, operators have reinvented themselves, overhauling legacy systems and embracing technology to stay ahead. Yet, despite all this change, the fundamentals remain the same: ensuring the swift, secure delivery of letters and parcels to customers – even if the final hand-off is now just as likely to be a parcel locker as a front door.

‘We’ve been through evolution, development, acquisition and consolidation, integration and now we’re into the transformation and optimisation phase,’ noted Bob Black, Vice President, Industry Strategies at Blue Yonder.

Transforming a legacy business

‘Royal Mail has been through more transformation in the last two years than in the previous 500’
Nick Dunn, Royal Mail

No operator has been immune to these cycles of disruption.

‘Royal Mail has been through more transformation in the last two years than in the previous 500,’ said Nick Dunn, National Distribution Director at Royal Mail. With more than 100,000 employees and a fleet of over 50,000 vehicles, the company’s scale makes every efficiency gain significant.

This is partly down to regulatory reform, with the Universal Service Obligation being overhauled to reflect wider changes in society. Letter volumes are now a third lower than they were 20 years ago, yet the number of households Royal Mail must serve has grown. ‘We are in the midst of the USO reform, which in itself drives the necessity to reshape our network,’ explained Dunn.

Finding new efficiencies

In 2024, Royal Mail introduced the Extended Network Window, which allowed later start times across most of its delivery network. The move halved its number of flights – improving sustainability – and expanded the capacity and flexibility of its overnight operations.

‘We were also able to have later acceptance times to inject into our network, which is very important,’ said Dunn. ‘In our latest financial results, Track 24 product growth was almost 30% and the cubic size of parcels increased by 7%, requiring more deck space, so the efficiency of the network is more and more important.’

These efficiencies rely on automation and intelligent use of data. ‘At this scale, agility is absolutely key,’ noted Dunn.

Bob Black of Blue Yonder agreed, noting that most companies are data rich but insight poor. Those that get the data analytics right have a competitive edge, unlocking solutions allowing operators to reconcile the customer demand for convenience, choice and price with the on-the-road realities of delivery.

‘Amazon are great at this,’ he said. ‘They will give you dynamic pricing which makes it look like flexibility and choice for you, but it’s really directing you to the best option for them.’

Automation at scale

Automation is playing an increasingly important role. Royal Mail now has 37 mail centres with their own parcel sorting machines – some have more than one – and there are two superhubs, one near Warrington and the other in Daventry, which process 1.5 million items alone.

‘Automation gives the business the agility and responsiveness to volume changes,’ said Dunn, adding that this trend will continue. ‘We can’t afford to stand still. Our customers are very demanding and it’s a competitive market. We need the latest technology to compete.’

Optimising the middle mile

‘Some of our planning tools are a couple of decades old and reaching the end of life,’ said Dunn. ‘We need tools that can enable us to optimise the middle mile and operate end to end.’

He points out that currently the national and regional distribution networks are planned separately and that software that could bring all this data together to optimise the network end-to-end would be transformative.

This is where the company has been working with Blue Yonder in a collaborative workshop involving real Royal Mail planning data. ‘We locked ourselves away for six weeks, making sure the data was clean and accurate and Blue Yonder showed us the art of the possible and how the whole network could be planned as one,’ he said.

This gives the capability to be more agile in the use of vehicles and drivers to reduce stranded hours. ‘When I arrived at Royal Mail, one of my counterparts told me our empty mile network was the second largest network in the UK,’ observed Dunn. ‘Using Blue Yonder’s software versus our current ways of working, we were able to take a couple of per cent out of that and at our scale that’s substantial.’

Quick wins from the front line

Transformation isn’t just about analytics and automation, however. It’s also about people. ‘You need to have that innovation mindset in the business, where people feel able to trial and fail, learn and move on. This type of innovation really drives the market and is very disruptive for legacy companies.’

‘Transformation isn’t a one-off, it’s a forever.’
Bob Black, Blue Yonder

It’s important that the people are brought on this journey. Indeed, Bob Black said this is where the quick wins lie. ‘Your frontline people know the pain points and the small changes that make a significant difference. Your small wins are people driven.’

And this is only the beginning. As Black points out, there are no silver bullets when it comes to optimisation across networks of this scale. ‘You need to progressively work through this,’ he said. ‘Transformation isn’t a one-off, it’s a forever.’

About Blue Yonder

Blue Yonder is the world leader in digital supply chain transformation. Retailers, manufacturers and logistics service providers worldwide rely on Blue Yonder to optimize and accelerate their supply chain from planning through fulfillment, delivery, and returns. Blue Yonder’s AI-driven supply chain platform and multi-enterprise, multi-tier network enable more accurate forecasting and dynamic management of capacity, inventory and transport. Blue Yonder helps businesses navigate modern supply chain complexity and volatility with more resilient, sustainable supply chains to delight customers, scale profitably, and run flawlessly. blueyonder.com