Post Office bosses are in talks to handle Amazon and Hermes parcels for the first time 

The Post Office is in talks to handle parcels for Amazon and Hermes for the first time in a potentially huge boost for Britain’s 11,500 branches.

Yesterday it revealed it had signed its first deal with Royal Mail which is ‘non-exclusive’, freeing it from a centuries-old arrangement.

The move could allow it to clinch lucrative tie-ups with online retail giant Amazon and parcel delivery specialist Hermes.

Royal Mail remains the biggest parcel delivery company in the UK, handling around 1.2billion in 2018.

However, Hermes, whose clients include top retailers John Lewis and Next, and Amazon are growing fast and now ship more than 550million parcels between them.

The move will be seen as a threat to Royal Mail’s stranglehold over the parcel industry but will boost the Post Office’s income and provide relief to postmasters and postmistresses who have seen pay cut drastically in recent years.

In a video message to them, chief executive Nick Read said: ‘The new agreement allows us to work with other third parties, marking an important milestone. The growth of online retailing means there is much more competition…We can provide online retailers access to the UK’s biggest parcels pick-up and drop-off network.’

He added: ‘You won’t be too surprised to know that we have been approached by third-party providers already.’

The taxpayer-owned Post Office, founded in 1660, has been struggling to make a profit for years because of the decline in incomes from letters and Government services, and the growth of online transactions. But as shops and banks have closed it is hoping to seize opportunities by making the most of its extensive network.

It is expanding the banking services it offers.

During the pandemic post offices have been a lifeline for many, selling essential produce locally and keeping an eye out for vulnerable customers.

Post offices could provide a location for ‘click and collect’ parcels and drop-off returns.

Local branches are run as independent businesses, and Post Office Ltd – a Government-owned firm – pays postmasters a fee for each transaction.

Fees for everything from selling a stamp, processing a banking transaction or renewing a passport have fallen by £118million to £365million a year since 2012. If parcel delivery took off, it could give a boost as postmasters would benefit each time a customer drops off or picks up a parcel.

The Post Office is already handling more than 16million parcels a week, which is up by a fifth in the pandemic.

Postmasters receive 60 per cent of their pay from handling parcels and letters.

They were awarded a £37million pay rise this year following a campaign by the Mail.

Amazon and Hermes last night declined to comment.