Royal Mail's US shipments are moving smoothly after the British post and parcel group had to adapt to Washington's ending of tariff exemptions for low-value packages, the CEO of its owner International Distribution Services said today.
The US tariff relief for shipments under $800, known as the "de minimis" exemption, ceased on Friday, causing turmoil in postal services globally.
But Royal Mail, which had been among the more than 25 foreign postal services to have suspended mail to the US in the run-up to the cutoff, resumed US shipments on Thursday, a day before the deadline.
The new service "has been a complex process for us to get up", IDS Group CEO Martin Seidenberg said. "However, we have done it in time."
"Shipments are flowing, there's no disruption - it's working," he said.
Royal Mail has implemented a service where customers can send parcels by paying any duties upfront, as well as a handling fee to cover additional costs of clearance into the US.
Seidenberg was speaking after Royal Mail posted its first annual profit on an adjusted basis in three years amid efforts to boost volumes by modernising operations and adding more lockers, as well as cutting costs.
"While this is very positive news, we shouldn't get overexcited. There's still more to do," Seidenberg said, as IDS under its new Czech owners also works with British regulators to improve deliveries and affordability.
Czech billionaire Daniel Kretinsky's EP Group closed its acquisition of IDS in June after committing to protect the more than 500-year-old Royal Mail and its workers and customers.
IDS, which comprises Royal Mail and the international parcels network GLS, logged adjusted operating profit of £278m for the year ended March 30, compared to a year-earlier loss of £28m.
In its first set of figures since the group's £3.6 billion takeover by Czech billionaire Daniel Kretinsky's EP Group, owner International Distribution Services (IDS) said Royal Mail delivered underlying earnings, excluding voluntary redundancy costs, of £12m for the year to March 31.
This compared with losses of £336m the previous year.
But, with redundancy costs included, Royal Mail still remained in the red with underlying operating losses of £8m, it said.
IDS said the underlying improvement at Royal Mail came "despite an increasingly competitive and challenging trading environment".
The wider group, which also owns the GLS parcel business, reported underlying earnings of £278m compared to losses of £28m in the previous year.
The figures come after a milestone year for the group, which saw Royal Mail taken into foreign ownership for the first time in its more than 500-year history.
The year has also seen regulator Ofcom rubber-stamp reforms allowing Royal Mail to ditch second class letter deliveries on Saturdays and change the service to every other weekday, which the group can start rolling out from July 28.
Martin Seidenberg, group chief executive of IDS, said: "It has been a year of change for IDS."
"Royal Mail returned to profit for the first time in three years, marking an important milestone in the company's turnaround," the CEO said.
"With IDS's acquisition by EP Group complete, and universal service reform decided, now is the time for us to drive the business forward and capitalise on our momentum," he added.
The group said it had started "detailed work" ahead of rolling out changes to second class deliveries, as part of reforms to the universal service, with the firm "using the learnings from pilots".
It added it would continue to invest heavily in postal lockers following the EP Group takeover, with Royal Mail having boosted its out of home locations by almost 70% to about 24,000 by the end of August and launched its own branded lockers.
GLS continued to expand its network to more than 110,000 out-of-home access points and more than doubled the size of the GLS locker network to more than 20,000 by the end of August, the company said.
"Under the ownership of EP Group, we will continue to invest in the rapid expansion of our out-of-home network across both businesses to meet the changing needs of our customers around the globe," Mr Seidenberg said.
