The Royal Mail is considering a significant overhaul of its services, with the possibility of reducing its letter delivery days from six to either five or even three, according to a report from the
regulatory body Ofcom. The regulator highlighted the outdated nature of the postal service and emphasized the need for action. Royal Mail, which has been struggling with a decline in letter volumes and a need for urgent reform, stated that its current delivery network is unsustainable.
The company, privatized between 2013 and 2015, is obligated to provide a universal service, delivering letters six days a week and parcels five days a week. However, with a drastic reduction in the number of letters being sent and a surge in parcel deliveries, Ofcom estimates that Royal Mail could save significant costs by cutting delivery days.
Ofcom's report suggested potential savings of £100m to £200m for a five-day delivery week and between £400m and £650m for a three-day delivery week. Another option proposed by Ofcom is extending the delivery time for most letters to within three days, saving an estimated £150 to £650m. However, any changes to the delivery schedule would require legislative amendments.
While Ofcom's research highlighted concerns about Royal Mail's reliability, especially after the company was fined £5.6m for missing delivery targets, the Communication Workers Union (CWU) expressed opposition to a three-day delivery service, fearing it would adversely affect jobs and the company.
Royal Mail, which posted a £319m loss in the first half of the current financial year, has been urging for reform since 2020. The company's CEO, Martin Seidenberg, emphasized that the lack of action has led to a more serious situation.
Ofcom's chief executive, Dame Melanie Dawes, stressed the need for improvement in the postal service, considering the recent performance issues. The regulator's research highlighted that customers prioritize affordability and reliability in letter postage.
The potential changes are subject to a national discussion, with an update scheduled for the summer. The government has indicated a reluctance to support the scrapping of Saturday postal deliveries, citing their importance for businesses and publishers. The discussion around postal service reform is ongoing, with various stakeholders expressing their concerns and priorities.