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Royal Mail could deliver on three days, regulator says

Postman
Postman

Royal Mail could reduce the number of days it delivers letters from six per week to five or even three, under proposals to reform the service.

A report from the regulator said the postal service was "getting out of date" and action needed to be taken.

Ofcom said another option would be extending the number of days it takes for most letters to be delivered.

Royal Mail said its current delivery network was "not sustainable" and that reform was "urgently needed".

The company, which was split from the Post Office and privatised a decade ago, is legally obliged to deliver a one-price-goes-anywhere universal service, which means it has to deliver letters six days per week, Monday to Saturday, and parcels Monday to Friday.

In recent years, the volume of letters being posted has plummeted, with half the number being sent compared to 2011 levels, while parcel deliveries have become more popular - and more profitable.

Royal Mail's performance has also deteriorated, with customers regularly not receiving post on time.

Dame Melanie Dawes, Ofcom's chief executive, said the regulator was sharing options for reforming the service, putting them out for "national discussion", with an update scheduled for the summer.

"Something's got to give, or the service is going to be too costly, and either stamp prices will go up or it will become unsustainable," she told BBC Breakfast.

'Saturdays sacrosanct'

The government has said it does not support the idea of scrapping postal deliveries on Saturdays.

Kevin Hollinrake, the postal services minister, told the BBC Royal Mail needed to "up their game" and that the government was "happy to have a conversation" about reforms.

But he insisted that Saturday deliveries were "sacrosanct" and that a six-day service would remain.

Ofcom estimated the company could save between £100m and £200m if delivery days were cut to five per week, and between £400m and £650m if there were just three postal days.

However, reforming the postal service by cutting delivery days would require the government and parliament to change the current legislation.

An alternative option would be to to reduce the speed of delivery for most letters to within three days. That would save £150 to £650m, Ofcom said, but the regulator said there would still need to be a next-day service available for any urgent letters.

Under Ofcom's current rules, each year Royal Mail is required to deliver 93% of First Class post within one working day and 98.5% of Second Class within three working days, but in 2022/23 the company only delivered 73.7% of First Class and 90.7% of Second Class mail on time.

Ofcom stressed that while delivery days could be cut, downgrading Royal Mail's delivery targets "was not an option".

Royal Mail posted a £319m loss in the first half of the current financial year, and the business, which is owned by International Distribution Services plc, has been calling for reform since 2020.

It has said previously that it would like to go from delivering six days a week to five, from Monday to Friday only.

Martin Seidenberg, Royal Mail's group chief executive, suggested the UK was "being left behind" in having not yet reformed its postal service.

"The lack of action means that we are now facing a much more serious situation," he said.

But the Communication Workers Union (CWU), which represent posties, said the union would not sign up to a three-day delivery service, claiming it would "destroy" Royal Mail and "impact thousands of jobs".

Ofcom said Royal Mail's recent poor performance, which led to the company being fined £5.6m in November last year for missing delivery targets, showed that "people are not currently getting a reliable service".

The regulator said its research, conducted in 2020, showed people valued affordability and reliability the most when it came to letter postage.

'No easy pass'

Ofcom said the UK was "not alone" in needing to reform its postal service. It noted Sweden, Belgium, Norway and Denmark have either reduced delivery days or extended delivery times for letters in recent years.

Dame Melanie said UK customers "haven't known what they can rely on" from the service, but said reducing delivery days or extending delivery times did not represent an "easy pass" for the company.

Peter Rimmer from Ormskirk, Lancashire, told the BBC he receives a delivery "once a week if I'm lucky" to his home on the edge of the town.

The former communications director, 78, said his post arrives in a bundle from a different postie each time.

Last week, he was met with disbelief when a Christmas card posted on the 8 December arrived with the correct address and first class stamp on it. "It's not a regular service," he said.

Morgan Wild, interim director of policy at the charity Citizens Advice, said any changes to the universal postal service must prioritise consumers "not Royal Mail's bottom line".

"We agree that improving reliability is essential. Late post has real consequences - people miss vital medical appointments, legal documents and benefit decisions," he said.

"Cutting services won't automatically make letter deliveries more reliable, so we must see proposals to tackle the cause of Royal Mail's persistent failings."

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