Parcels, mail and e-fulfilment specialist Whistl fell into the red in 2022 as a decline in post-Covid online shopping, the Ukraine War, supply chain issues and the cost of living crisis all took their toll.

In its latest financial results, for the year to 31 December 2022, Whistl revealed pre-tax losses of £2.1m, compared to a pre-tax profit of £4.2m in the previous year. Group revenue plunged 48.4% overall, to £732.9m, down from £781.3m in 2021.

Revenue from its business mail - Whistl’s core division - tumbled 13.7% in the period to £488.2m (2021: £501.9m) whilst parcels revenue plummeted 29.7% in 2022 to £137.7m (2021: £167.4m).

Whistl’s international parcels business also saw revenue fall 3.6% to 28.1m (2021: £31.7m), whilst fulfilment revenue dropped slightly by 1.4% to £78.9m, from £80.3m in the previous year.

Whistl said the drop in its UK parcel volumes in 2022 reflected the fall in Covid-driven online deliveries but the company did not reveal the exact fall in its parcel volumes, pointing instead to Ofcom research which showed that overall total parcel volumes decreased by 5.7% to 3.8 billion items in 2021/22 compared with the 47% growth recorded in 2020/21.

Ofcom’s research also revealed a fall in domestic parcel volumes of 0.8% year-on-year to 3.4 billion items, compared to a 53% rise in the prior year, whilst next-day delivery items made up 65% of measured domestic parcel volumes in the period compared with nearly 60% in the previous year.

Ofcom also found that total parcel volumes across all UK postal operators decreased by around 6% to 3.82 billion items, with domestic volumes declining slightly by around 1%.

In its strategic report to the results Whistl said that against this background of falling overall parcel volumes it had continued to invest in the division, appointing former Whistl’s sales director for the North, Andy Underwood, as its first MD of parcels, with a brief to focus on large organisations and core strategic customers.

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Whistl also improved the mix and quality of parcels processed, offset lower parcel volumes through additional pricing and landed “significant contracts” in the horticulture sector.

In addition the company become the first parcel and delivery consolidator to become integrated as an Amazon delivery carrier and and also began offering customers Yodel’s new Xpect Mini and Medium two-hour delivery window services in 2022.

Turning to its international parcels business, Whistl said the division also saw a challenging year, thanks to the impact of the pandemic, Brexit, and the Ukraine War and related economic pressures, which had made it difficult for customers to forecast volume and obtain stock.

Parcel imports and exports declined by over 30% in 2022, which the report attributed to global supply chain disruption and the introduction of complex post-Brexit customs duties and import/export tariffs. International inbound volumes decreased by 32%, having risen 31% in 2021.

Whistl’s fulfilment division saw the least losses in 2022, the results revealed, down just 1.4% to £78.9m (2021: £80.3m). The report noted that, despite fluctuating customer volume, which was partly driven by supply chain disruptions, the division “performed well during a busy peak”.

However the ongoing skills shortage in the sector hit the division’s performance, with Whistl experiencing a lack of “quality expert staffing” during the year.

Commenting on the results, Nick Wells, Whistl executive chairman, said they largely reflect “the impact of these economic headwinds, plus the fact that 2021 comparatives are challenging, given that it was an exceptional trading year”.

He added: “In 2022 we remained resilient in the face of the economic challenges and in 2023 we remain confident we will grow and improve the operational efficiency and overall profitability of the group.”