Royal Mail wants to keep first class deliveries on six days

https://www.bbc.co.uk/news/business-68721814#0

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Royal Mail wants to maintain daily deliveries of first class letters between Monday and Saturday under new proposals it has set out for reform.

Its parent company is under pressure to cut costs and has suggested second class letters should be delivered every other weekday.

Its boss said the changes would give it a "fighting chance" as the regulator Ofcom reviews options for its future.

The government previously opposed the reduction of a six-day service.

Royal Mail, which was split from the Post Office and privatised a decade ago, is legally obliged to deliver a one-price-goes-anywhere "universal service".

In recent years, the volume of letters being posted has plummeted while parcel deliveries have become more popular - and more profitable.

But many customers have complained about delays to deliveries for important letters detailing medical appointments, or including legal documents. The company has been struggling financially, making a heavy loss of £419m last year.

What’s gone wrong at Royal Mail?

The regulator has set out various options to reform the service which it said was out of date, and called for feedback from consumers and businesses.

Ahead of an update from the watchdog due in the summer, Royal Mail published its response with its own proposals on Wednesday. They include:

Maintaining the one-price-goes-anywhere service for the whole of the UK

First class letters delivered daily, six days a week (Monday to Saturday)

Changing deliveries of all non-first class letters to every other weekday

Parcels delivered up to seven days a week as currently

The delivery speed of mail for big shippers used for things like bills arriving within three weekdays instead of two

If the plans - aimed at saving up to £300m a year - are approved by Ofcom, it would mean daily delivery routes are cut by between 7,000 to 9,000 within two years, and would likely lead to job cuts.

Royal Mail said there would be "fewer than 1,000" voluntary redundancies and expects no compulsory redundancies as part of the proposed overhaul.

Martin Seidenberg, chief executive of International Distributions Services, Royal Mail's parent company, said that the universal service was now "unsustainable".

With letter volumes dropping from 20 billion to seven billion a year, Mr Seidenberg suggested: "Reform gives us a fighting chance and will help us on the path to sustainability."

'We have to change universal service'

"If we want to save the universal service, we have to change the universal service," Mr Seidenberg added.

He also voiced "serious concerns" that the situation was not being treated with enough urgency by the regulator.

The firm wants the watchdog to introduce changes by April 2025 at the latest. Royal Mail said there would be no need for changes to legislation if its proposals were accepted.

It is understood that reforming the postal service by cutting delivery days would require the government and parliament to change the current legislation.

Under Ofcom's current rules, each year Royal Mail is required to deliver 93% of first class post within one working day and 98.5% of second class within three working days, but in 2022-23 the company only delivered 73.7% of first class and 90.7% of second class mail on time.

The company's poor performance around deliveries led to it being fined £5.6m for missing delivery targets in late 2023.

Previously, the government has opted against cutting any delivery days, arguing Saturday deliveries provide flexibility and convenience.

The boss of the UK's Greeting Cards Association, Amanda Fergusson, said the reforms suggested by Royal Mail would "ignore" the needs of the businesses it represents.

"They expect a postal service that's national, reliable, and affordable and they're not getting it," she said.

Royal Mail also wants the regulator to introduce new reliability targets for first class and second class services to give customers more confidence.