Workers in England, who make up the bulk of the 2,727 City Link work force, face redundancy as the UK parcel delivery company collapses.
Major questions need to be asked about City Link, not just about how staff were informed on Christmas Eve/Day, but how the company got in to such a financial mess in the first place.
We know that times are hard for English Businesses, including City Link who have struggled over the past few years, but according to the figures from the Centre for Retail Research there is an estimated 15% growth in online sales for 2014, sales which by their very nature requires delivery.
Unlike larger stores who will have deliveries in bulk and individual customers collect from the store, online sales are individual customers, who get deliveries by multi-drop drivers, this requires a network of vehicles and staff to make sure customers get their goods on the dates promised.
However the courier/next day delivery sector has been “oversubscibed” now for a few years and whilst the industry has seen an increase in online sales, this has caused prices to tumble and margins to fall.
To reduce costs many large courier networks now use subcontract/self-employed networks which pays a low wage because the margins are low.
We know fuel costs have reduced over recent months which would help the margins but this has only recently occurred and wages have not been increasing, interest rates have been low for a long time, so why as a large delivery company suddenly gone out of business?
What knowledge did senior managers, and for that the Trade Unions, have about the financial crisis that was looming.
I am sure the true facts of City Links collapse will become public in due course and many questions will be answered, in the mean time we hope the former employees get through this difficult time and that a new year will give new hope and prosperity.
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