Royal Mail has announced its plans for reform, which include maintaining daily deliveries of first class letters from Monday to Saturday. The company’s parent company is seeking to cut costs and has proposed that second class letters be delivered every other weekday. The changes are expected to give the company a “fighting chance” as it faces a review of its future by regulator Ofcom. The government has previously opposed cutting back on a six-day service, which is what Royal Mail is attempting.
Royal Mail is committed to providing a one-price-goes-anywhere “universal service” and must find ways to continue delivering this service while adapting to changing consumer habits. With the rise of parcel deliveries, the volume of letters being posted has declined significantly. While this has been great for profitability, it has created delivery issues for important letters, including those containing legal documents or information on medical appointments.
Regulator Ofcom has set out various options for reform of the service and has asked for consumer and business feedback before providing an update in the summer. In response, Royal Mail has submitted its own proposals. These include the maintenance of the one-price-goes-anywhere service throughout the UK. Parcels will continue to be delivered every day of the week as they currently are. The delivery speed of mail dispatched by big shippers used for items like bills will take up to three weekdays instead of two.
Pending Ofcom approval, the proposal should cut costs by up to £300m each year. Around 7,000 to 9,000 delivery routes would be cut within two years of the changes, potentially leading to job cuts. The company anticipates cutting fewer than 1,000 jobs with no compulsory redundancies if the proposed cuts are implemented. Martin Seidenberg, CEO of Royal Mail’s parent, International Distributions Services, said that the universal service had become “unsustainable.” He argued that change was required to save that service and ensure its continued existence.
Possible problems with this plan include employee and public push back against job cuts and reduced delivery days. If delivery days are reduced, the government, which historically opposed changing the current six-day service, may reconsider its stance
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