Consignia to sell Royal Mail train fleet as rail delays hit performance targets

The Royal Mail wants to sell off its fleet of mail trains as part of a sweeping transport review, which could result in a big drop in the volume of post moved by rail.

Consignia, the parent company for Royal Mail, said yesterday that it hoped to stop operating its £50m fleet of 16 high-speed electric trains and instead buy "power by the hour" from train leasing companies.

The move follows a huge decline in the reliability of rail services since the Hatfield crash last October, which has had a knock-on effect on letter deliveries.

Consignia executives are worried that the upgrading of both the east and west coast mainlines over the next few years will lead to even more rail disruption.

From the end of next year, the organisation faces heavy fines if it fails to meet its performance target of delivering 92.5 per cent of first class letters the next day.

At present a quarter of the 80 million letters posted each day are transported by rail while 55 million are moved by road and 5 million by air. The Royal Mail operates nearly 60 trains a night and 40 air services while its fleet of 40,000 vehicles covers 640 million miles a year.

By far the most heavily-used rail route is the west coast mainline where the number of mail trains arriving on time fell to as low as 10 per cent in the immediate aftermath of Hatfield. Although performance has since recovered, it remains about 10 percentage points below the Royal Mail's target of 95 per cent.

The review could result in a big increase in the amount of mail delivered by road and air. Alan Williams, Consignia's director of public affairs cautioned, however, that air was almost twice the cost of rail while road, although cheaper, was also slower. "We are not pre-judging the outcome of the review. We have made no decision to come off rail."

But he did say that the Royal Mail's £62m contract with English Welsh and Scottish Railways, which runs until 2006, was likely to be renegotiated when the review is completed at the end of this year. Royal Mail is currently seeking £15m-£20m in compensation from EWS to cover extra costs it incurred following the Hatfield crash. EWS also owns and operates the fleet of 18 "travelling post offices" which sort mail as it is transported by rail around the country.