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Letter deliveries could be halved under Royal Mail reforms

The Royal Mail wants to reduce the delivery of second class letters to every other weekday under proposals to reform the postal service.

The plans will see first class post continued to be delivered six days a week but second class post deliveries will be halved to three deliveries a week and business mail outs of brochures and flyers even less often.

The loss-making Royal Mail said the sweeping changes could reduce costs by £300m a year if implemented but unions warned it could come at the cost of 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 added.

International Distribution Services (IDS), Royal Mail’s parent company said the plans, developed ‘after listening to thousands of customers to ensure it meets their changing needs’, would deliver a “more efficient, more reliable and more financially sustainable service”.

It said the moves would protect the one-price-goes-anywhere Universal Service obligations (USO), allow consumers the choice of First and Second Class services, with First Class letters still delivered six days a week.

The USO legally requires the Royal Mail to deliver letters to all addresses in the UK six days a week but the postal service has been missing its targets with with intermittent deliveries and delays despite increasing the price of stamps. Last year it was fined £5.6m by Ofcom for a “significant” failure to meet its postal delivery targets in the 2022-2023 financial year.

Royal Mail urged Ofcom to act swiftly to introduce the reforms warning of an urgent need for change because of a sharp fall in letter sending which has seen the number of letters being sent each year has declined from a peak of 20 billion a year in 2004/5 to 7 billion in 2022/3. Royal Mail forecasts volumes will likely drop to about 4 billion in the next five years.

The drop-off has increased the risk of making the UK’s postal service financially and operationally unsustainable according to the regulator Ofcom.

No changes are currently proposed to the one-price-goes-anywhere service to all parts of the UK and first class mail will be delivered six days a week. It wants to be able to deliver standard bulk business mail within three weekdays instead of two currently it said.

Martin Seidenberg, IDS chief executive, said: “The fact that letter volumes have dropped from 20 billion to 7 billion a year means that the Universal Service is now unsustainable. If we want to save the Universal Service, we have to change the Universal Service.

“Reform gives us a fighting chance and will help us on the path to sustainability. Our proposal is based on listening to thousands of people across the UK to ensure it meets their needs. We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.

“We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait.”

IDS said the reforms would enable posties to deliver to around seven out of ten addresses on every walk, compared to just four out of ten currently. It would result in a net reduction in daily delivery routes of 7,000-9,000 over the course of around 18-24 months. It said it expects no compulsory redundancies and fewer than 1,000 voluntary redundancies.

Businesses have reacted cautiously to Royal Mail’s reform plans. Tina McKenzie, of the Federation of Small Businesses, said: “Taking the axe to daily deliveries for second class would be a drastic cut which would hit the many small businesses which rely on it, and will in all probability leave some with no choice but to fork out for first class.

“However, Royal Mail’s concession to retain a six-day-a-week service for first class letters is a good step in the right direction, compared to its original dire proposal – voiced via Ofcom – to torpedo daily deliveries altogether. The Government rightfully said it was committed to keeping the six-day service as it is, and that is something that would have required legislation to change.

“We do recognise that savings need to be made, therefore the idea that bulk business mail, like bills and statements, will arrive within three working days instead of two is a difficult but sensible way to make savings without causing an enormous amount of disruption.

“It’s good that Royal Mail has listened to us on some parts of its consultation response. We hope that Ofcom will reflect on the detrimental impact of diminishing six-day-a-week deliveries, and remind itself that its role is to protect consumers rather than be a cheerleader for service cuts by an organisation it’s supposed to regulate.”

In a separate Ofcom submission, greetings card retailers urged the regulator to cut a midweek delivery day rather than Saturday if it decides on a reduction to the UK’s letter services,

The Greeting Card Association says halting the delivery of standard letters on Tuesday or Wednesday would be far less damaging than suggestions to drop Saturday deliveries.

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