Royal Mail to scrap second-class post on Saturdays

Royal Mail may end the delivery of second-class letters on Saturdays and only deliver them on alternative weekdays. under reforms being planned by Ofcom.

The regulator considers the changes to the second-class service are needed as part of a review of the the Universal Service Obligation (USO) under which Royal Mail is required by law to deliver letters six days a week and parcels five days a week.

Ofcom said the postal delivery service needed modernising. “If the universal postal service does not evolve to align with customer needs, it risks becoming unsustainable, and people could end up paying higher prices than necessary,” it said. The changes could save Royal Mail hundreds of millions of pounds.”

Lindsey Fussell, Ofcom’s group director for networks and communications, said: “No change is not really an option. Postal users’ needs are at the heart of our review. “If we decide to propose changes to the universal service next year, we want to make sure we achieve the best outcome for consumers.

“We’re now looking at whether we can get the universal service back on an even keel in a way that meets people’s needs. This won’t be a free pass for Royal Mail – under any scenario, it must invest in its network, become more efficient and improve its service levels.” The move is not expected to be confirmed until next year.

Martin Seidenberg, chief executive of International Distribution Service which owns Royal Mail, which agreed a £3.57bn takeover by Czech billionaire Daniel Kretinsky in May, said: “Letter volumes have fallen from their peak of 20 billion to just 6.7 billion a year today meaning the average household now receives just four letters per week. Yet whilst most countries have adapted their universal service requirements to reflect the new reality, in the UK the minimum requirements have not changed.

“Our proposal for the future of the universal service has been developed after speaking to thousands of people across the country and is designed to protect what matters most for customers. It can be achieved through regulatory change with no need for new legislation.

“The universal service faces a very real and urgent financial sustainability challenge. Change cannot come soon enough.”

The loss-making business told Ofcom the changes could reduce costs by £300m a year if implemented. Unions warned it could result in thousands of job losses. The changes would reduce 7,000 to 9,000 daily delivery routes over the next 18 to 24 months, Royal Mail said.

Ofcom said that regardless of reforms Royal Mail needed to improve its delivery record. The postal service is currently required to deliver 93 per cent of first-class post within one working day and 98.5 per cent of second-class within three working days. Despite this, it only delivered 73.7 per cent of first class and 90.7 per cent of second-class post was delivered on time between 2022-23 and was fined £5.6m.

“We have been pressing the company on what it is doing to turn things around, and we are currently investigating its latest failure to hit its annual delivery targets. Regardless of how the universal service evolves, Royal Mail’s delivery performance must improve,” Ofcom added.

Tom MacInnes, at Citizens Advice, said: “With Royal Mail failing to meet its targets for nearly half a decade, the current Universal Service Obligation (USO) clearly doesn’t protect consumers as it should. Reforms to the USO need to address this. They can’t just be a disguise for cuts that prioritise saving Royal Mail money over providing a good standard of service.

“We agree that improving reliability and affordability is essential. But cutting deliveries won’t automatically lead to the more reliable service people need. Ofcom has acknowledged some of Royal Mail’s failings but we need to see that recognised with action. The regulator needs to make sure we have a USO that serves its basic purpose of protecting consumers – not Royal Mail’s bottom line.”

Amanda Fergusson, chief executive of the Greeting Card Association (GCA), said: “We are concerned that (Ofcom’s) proposed timetable today takes us one step closer to the dismantling of a postal service that’s affordable and reliable.

“Our members have been clear that moving to a second class delivery service that’s limited to three days a week will mean customers buying and sending cards will have little idea when they’ll arrive.

“Those members, and the consumers they serve, rely on a postal service that’s reliable, affordable and national – they’ve already told us loud and clear they’re not getting it.

“Any changes to the USO ( universal service obligation) must prioritise the needs of small businesses and consumers – not Royal Mail profitability.”

The Professional Publishers Association (PPA), which represents trade and consumer magazine publishers, raised concerns over the impact of the proposed reforms on the industry.

Sajeeda Merali, chief executive of the PPA, said: “The PPA continues to express concern over Ofcom’s ongoing proposed reforms to Saturday deliveries and second-class usage, and the impact this will have on publishers of weekly time-sensitive magazines.

“Consumers who subscribe to these services expect reliable delivery, and delays compromise the value of these products.

“Titles such as The Week and the Radio Times are reliant on an efficient and timely delivery service to their many thousands of subscribers.”