Royal Mail threatens to stop Saturday deliveries to cut costs

FINANCIALLY STRAINED: A Royal Mail spokesman said the cost of the so-called universal service in its current form was becoming ‘unsustainable’ (Image: PA)

Saturday deliveries could be eliminated if Royal Mail has its way, according to regulator Ofcom. Ofcom is conducting a review of Royal Mail’s universal service obligations, which mandate letter deliveries from Monday through Saturday.

It came as the former FTSE 100 company said it will increase the price of a first-class stamp by 15p, bringing it to £1.25 starting in October. This change will result in the cost of a book of eight stamps reaching £10 for the first time.

Chief commercial officer Nick Landon also stated that the Royal Mail’s current obligation to deliver letters within six days was becoming unrealistic. He said: “We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes.”

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Landon also pointed out the substantial decline in letter volumes over recent years, with a reduction of more than 60 per cent from their peak in 2004/5 and a 30 per cent decrease since the pandemic. A separate statement issued by the Royal Mail said it was “vital” that the universal service “adapts to reflect this new reality”, reported the Express.

In 2020, research conducted by the regulatory body Ofcom indicated that offering letter services exclusively on weekdays would fulfill the requirements of 97 per cent of consumers and small to medium-sized businesses. The spokesman stressed that being forced to provide a service that fewer customers want, while also incurring significant costs, makes it harder to sustain the Universal Service Obligation (USO).

He said: “We want to work with all stakeholders including Ofcom, Government, our unions and our customers to enable change quickly and to protect the long-term sustainability of the one-price-goes-anywhere Universal Service.” Currently, the Universal Service Obligation (USO) mandates Royal Mail to deliver letters six days a week to all 32 million addresses in the UK at the same rate, regardless of where the mail is going.

In a statement issued recently, Ofcom stated that while postal services remain important, there’s been a 46 per cent decline in letter usage over the last decade due to increased digital alternatives. This decline in daily letter deliveries raises delivery costs.

Ofcom believes it’s a good time to assess the future of the universal service amidst ongoing public debate. “We therefore believe that now is a good time to consider the longer-term future of the universal service, ahead of any future review of the regulatory framework.”

How do you feel about Royal Mail’s proposal to end Saturday letter deliveries? How do you think this change will impact you? Let us know in the comments below.

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