Ofcom relaxes Royal Mail delivery targets to cut costs
Royal Mail will be allowed to deliver first and second class letters more slowly after its delivery targets were slashed by the communications watchdog in a bid to cut costs.
From the end of July, Britain’s postal service will be allowed to deliver second class letters on alternate weekdays, Monday to Friday, instead of six days a week, under new rules from Ofcom.
The share of first class mail that must be delivered next-day will be cut from 93 per cent to 90 per cent, while the share of second class mail delivered within three working days will be trimmed back from 98.5 per cent to 95 per cent, which Ofcom insisted was still a high share by international standards.
It’s thought that relaxing the rules will save Royal Mail between £250m and £425m annually if successfully implemented, reversing the £348m loss the company made in its 2023/24 financial year.
Ofcom said it took the move in response to research suggesting that affordability and reliability are more important to people than speed of delivery, but they value having a next-day service available for when they need to send the occasional urgent item.
“These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival,” said Natalie Black, Ofcom’s Group Director for Networks and Communications.
“But changing Royal Mail’s obligations alone won’t guarantee a better service – the company now has to play its part and implement this effectively. We’ll be making sure Royal Mail is clear with its customers about what’s happening, and passes the benefits of these changes on to them.”
Black added that Ofcom had launched a review of the affordability of increases in stamp prices and plans to publicly consult on this next year.
Ofcom said it was still concerned that people have experienced long delays where letters have taken weeks to arrive. To address this issue, the watchdog set Royal Mail new enforceable backstop targets so that 99% of mail has to be delivered no more than two days late.
In April, Royal Mail’s parent company IDS was acquired by EP Group, a Czech-based company owned by billionaire Daniel Křetínský, for £3.6bn, marking the first time the postal service has come under foreign ownership.