Royal Mail is set to shake up its delivery service after Ofcom put forward new plans.
Ofcom proposes ending Saturday deliveries for second-class mail, in a move that could save Royal Mail millions annually.
The regulator, after a consultation, believes this change won’t compromise needs while maintaining six-day-a-week first-class deliveries. This move could save Royal Mail between £250m and £425m yearly.
It comes as Czech billionaire Daniel Kretinsky recently acquired Royal Mail for £3.6bn, a deal approved by the government last year. Mr Kretinsky has committed to upholding the universal service obligation post-takeover.
Ofcom also suggests reducing Royal Mail’s delivery targets. First-class mail’s next-day delivery target would decrease from 93 per cent to 90 per cent, while second-class mail’s three-day delivery target would fall from 98.5 per cent to 95 per cent. These adjustments align with international and European standards. Royal Mail has faced significant fines exceeding £16m over the past 18 months for failing to meet existing targets.
Natalie Black, Ofcom’s group director for networks and communications, said: “The world has changed – we’re sending a third of the letters we were 20 years ago.
“We need to reform the postal service to protect its future and ensure it delivers for the whole of the UK.
“But we’re safeguarding what matters most to people – first class mail six days a week at the same price throughout the UK, and a price cap on second class stamps.”
Ofcom said its latest research revealed most people do not need letter delivery six days a week, with the number delivered each year having slumped from 20 billion two decades ago to around 6.6 billion now and set to drop further to 4 billion in the next few years.
Ofcom is to consult further on its proposals until 10 April, with a final decision to be made in the summer.
Emma Gilthorpe, chief executive of Royal Mail, said: “As Ofcom’s analysis shows, it is no longer financially sustainable to maintain a network built for 20 billion letters when we are now only delivering 6.7 billion.
“Reform is crucial to support a modern, sustainable, and reliable postal service for our customers, our company and our people.”
The Communication Workers Union (CWU) warned the overhaul must come with better working conditions for Royal Mail staff and service improvements.
Dave Ward, general secretary of the CWU, said: “The trials that we have agreed with Royal Mail are strictly conditional on the basis that we see a significant improvement in service reliability for customers, as well as terms and conditions for postal workers being improved – including improved attendance patterns, more Saturdays off, agreed long-term job security and the creation of a genuine platform for growing the company.
“Any failure to abide by these conditions will see our support withdrawn.”
“The prospective owners of Royal Mail, EP Group, have committed to restoring faith in the UK postal service – we will hold them to this,” he added.
