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The UK postal industry may look completely different if Ofcom’s proposal to limit Royal Mail’s delivery to only second-class letters and parcels on alternate weekdays, excluding Saturdays, is approved. Ofcom has said that the Universal Service Obligation, or USO, needs to be reformed to accommodate an industry where stamp prices keep rising, but fewer letters are being sent each year. Under the USO, Royal Mail must ensure that post is delivered six days a week, from Monday to Saturday, and parcels are delivered for five days, from Monday to Friday, for a fixed price.
Ofcom has also suggested reducing Royal Mail’s target of delivering first-class post on the next day from 93% to 90%, with a similar reduction proposed for second-class mail arriving within three days, from 98.5% to 95%. The regulator’s recommendations come after the company was fined more than £16m over the past 18 months for poor delivery performance, which Ofcom has deemed “not good enough”.
The reduction of second-class deliveries is expected to save Royal Mail between £250m to £425m, according to Ofcom. This should not only improve the company’s reliability but also allow it to grow in areas such as parcels. The proposal was developed after Royal Mail consulted with thousands of people and is designed to protect what matters most, including maintaining the one-price-goes-anywhere service and first-class deliveries up to six days a week.
While Emma Gilthorpe, CEO of Royal Mail, welcomes the need for change to protect the future of the USO, the Post Office has voiced its objections. The Post Office has underlined concerns over the effect of the proposed changes on vulnerable people and postmasters who are already operating in difficult trading conditions.
Ofcom has opened a consultation of the new proposals, which can be viewed on its website until 10 April 2025. A final decision is expected in the summer of 2025. A pilot scheme will see 37 of Royal Mail’s 1,200 delivery offices participate, which will deliver second-class mail on alternate weekdays, starting in February
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