- Royal Mail wants to maintain first class deliveries six days a week
Royal Mail has proposed a slew of operational changes in a bid to save £300million a year.
Royal Mail, owned by International Distributions Services (IDS), wants to deliver all non-first class and second class mail every other weekday, amid regulator Ofcom’s call for universal service reform due to falling letter volumes.
Under the proposals, the delivery of standard bulk business mail for things like bills or statements would be ‘aligned to Second Class’, so they would arrive within three weekdays instead of two.
Proposals: Royal Mail wants to deliver non first-class or second-class post every other weekday
Royal Mail said it wants to maintain daily deliveries of first class letters between Monday and Saturday under the new proposals it has set out for reform.
The government previously opposed the reduction of a six-day service.
Parcel deliveries would be unchanged and still be delivered ‘up to seven days a week’, it said.
Similarly, the proposals would see customers continue to be given the chance to buy either first or second class stamps.
There would be a net reduction in daily delivery routes of 7,000 to 9,000 over the course of around 18 to 24 months under the proposals, Royal Mail said.
The company expects there to be no compulsory redundancies and ‘fewer than 1,000 voluntary redundancies’.
The reduction would be managed through ‘natural turnover’ wherever possible, it said.
Calling for change: Martin Seidenberg is the group chief executive of IDS
Martin Seidenberg, group chief executive of IDS, said: ‘The fact that letter volumes have dropped from 20billion to seven billion a year means that the Universal Service is now unsustainable.
‘If we want to save the Universal Service, we have to change the Universal Service. Reform gives us a fighting chance and will help us on the path to sustainability.
‘Our proposal is based on listening to thousands of people across the United Kingdom to ensure it meets their needs.
‘We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.
‘We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait.’
Royal Mail called on Ofcom to modernise the Universal Service. It said it wants to see additional ‘reliability targets’ and ‘realistic speed targets’ introduced for first and second class services.
It also wants tracking to be added to Universal Service parcels to ‘reflect customer demand.’
The group said it costs the firm between £1million to £2million every day to provide the Universal Service to the UK.
Royal Mail added on Wednesday: ‘The proposal for reform can be achieved with regulatory change without the need for legislation.
‘Royal Mail is urgently calling for Ofcom to act faster on implementing change, with the introduction of new regulations by April 2025 at the latest.’
It expects letter volumes to fall to around four billion in the next five years.
Under current rules from Ofcom, every year Royal Mail is required to deliver 93 per cent of first class post within one working day and 98.5 per cent of second class mail within three working days. These targets are not always met.
Royal Mail said the proposed operational changes would ‘create a more financially stable future for the business and its shareholders, protecting tens of thousands of jobs.’
Royal Mail posted a loss £419million for 2022-23 and a loss of £319million for the first six months of 2023-24.
Ofcom will provide an update on the proposals in the summer.
