Opinion: The postal system is letting down our small businesses

When we think of small businesses, we tend to think of the goods and services they supply, but small business are also significant consumers of goods and services. Many rely on postal services to order raw materials and send goods to their customers.

After facing the challenges of the pandemic, and the rising costs of utilities, it’s important that these businesses, regardless of their size, nature, or profit margin, can access fair and affordable postal services.

Recently Citizens Advice Scotland commissioned YouGov to ask 500 Scottish small to medium enterprises (SMEs) how they feel about postal services and what changes they’d like to see. We are publishing the findings in full tomorrow. But you won’t be surprised to hear that affordability was a big issue, with 60% of SMEs telling us that the cost of sending items with Royal Mail was expensive.

Despite the boom in online shopping and the use of parcel delivery companies, SMEs are more likely to use Royal Mail when they send goods to customers. One reason for this is that Royal Mail must deliver all parcels at a flat rate to any UK address. This means that unlike other parcel companies, Royal Mail doesn’t apply surcharges based on location for rural deliveries.

67% of SMEs told us that delivering parcels at a single rate to any UK location is important. Around 1 in 4 SMEs had encountered extra surcharges on inbound deliveries from other parcel operators, resulting in additional costs. The Federation of Small Businesses (FSB) has welcomed our research, highlighting that for many of their members postal services are critical and that cost should not be a barrier to conducting business.

Royal Mail’s quality of service has regularly fallen short of its targets since the beginning of the pandemic. Many Scottish consumers experienced delays or non-delivery of letters and parcels over the Christmas period. This is a concern for small businesses who rely on parcel deliveries to serve their customers, especially during the festive shopping season. And when issues do arise, they often aren’t resolved.

Three-quarters of SMEs who complained to a parcel operator were dissatisfied with the response. SMEs need to know that parcels will be delivered to customers on time and have confidence that when mistakes happen, they can be resolved in a simple, efficient way. The postal regulator, Ofcom, is considering what changes are necessary to improve postal services for the next 5 years. Here at CAS, we have our own ‘shopping list’ of changes we want to see.

Small businesses must have access to reliable postal services which work equitably across all parts of Scotland; they need a postal system that is affordable for all; the regulatory framework should ensure that people and businesses get the services that they pay for, and when things do go wrong, it needs to be quicker and easier to get things put right.

At CAS we don’t believe this is too much to ask. Madeleine Kennedy is a policy officer at Citizens Advice Scotland.