Royal Mail fined £5.6m for failing to meet delivery targets
Royal Mail has been fined £5.6 million by regulator Ofcom for a “significant” failure to meet its postal delivery targets in the past financial year.
Ofcom imposed the penalty following an investigation launched in May after Royal Mail fell short of its performance targets across the 2022 to 2023 financial year for first and second class mail deliveries.
Ofcom had said it would examine the service’s failure to meet targets during a year marked by strikes to determine if there were any “exceptional events” to explain the missed target.
Royal Mail is required to deliver 93 per cent of first-class mail within one working day of collection and 98.5 per cent of second-class mail within three working days.
Its workers are also required to complete 99.9 per cent of routes on each day that a delivery is required.
Despite this, Royal Mail said only 73.7 per cent of first-class mail was delivered on target, 90.7 per cent of second class and only 89.4 per cent of delivery routes had been completed.
The postal watchdog said that, even after taking into account strike action disruption, extreme weather and the closure of the runway at Stansted Airport, Royal Mail’s first and second class performance was still only 82% and 95.5% respectively.
Ofcom said: “This means that Royal Mail breached its obligations by failing to meet its targets by a significant and unexplained margin.
“This caused considerable harm to customers, and Royal Mail took insufficient steps to try and prevent this failure.”
Last year, an investigation was closed after the regulator ruled that greater staff absences and social distancing regulations resulting from Covid had hit the service.
In 2019, Ofcom fined the Royal Mail £1.5m for missing its first-class mail target.
Royal Mail admitted it was “very disappointed” with its delivery performance in 2022-23, but said it was a “uniquely challenging” year.
A spokesman for the company, which is owned by FTSE 250-listed International Distributions Services, said: “Quality of service was materially impacted by the long-running industrial dispute which included 18 days of strike action.
“We are pleased that Ofcom has acknowledged that elements outside of Royal Mail’s control had a significant impact on service levels and has adjusted the figures to 82% for first class and 95.5% for second class mail.”
“We take our commitment to delivering a high level of service seriously and are taking action to introduce measures to restore quality of service to the level our customers expect.”
