Royal Mail could deliver on three days, regulator says

Royal Mail could reduce the number of days it delivers letters from six per week to five or even three, under proposals to reform the service.

A report from the regulator said the postal service was “getting out of date” and action needed to be taken.

Ofcom said another option would be extending the number of days it takes for most letters to be delivered.

Royal Mail has said previously it was “simply not sustainable” to maintain its current delivery network.

The company, which was privatised between 2013 and 2015, is legally obliged to deliver a universal service, which means it currently has to deliver letters six days per week, Monday to Saturday.

But in recent years, the volume of letters being posted has plummeted, with half the number being sent compared to 2011 levels, while parcel deliveries have become more popular, Ofcom said.

Dame Melanie Dawes, Ofcom’s chief executive, said the options for reform were being put out for “national discussion”, with an update scheduled for the summer.

“Something’s got to give, or the service is going to be too costly and either stamp prices will go up or it will become unsustainable,” she told BBC Breakfast.

The government said earlier this week that it would not support Royal Mail scrapping postal deliveries on Saturdays, with the prime minister’s spokesman arguing they were “important for businesses and particularly publishers”.

Ofcom estimated the company could save between £100m and £200m if delivery days were cut to five per week, and between £400m and £650m if there were just three postal days.

However, reforming the postal service by cutting delivery days would require the government and parliament to change the current legislation.

An alternative option would be to to reduce the speed of delivery for most letters to within three days would save £150 to £650m, Ofcom said, but the regulator said there would still need to be a next-day service available for any urgent letters.

In the first half of the current financial year, Royal Mail posted a £319m loss and the business, which is owned by International Distribution Services plc, has been calling for urgent reform since 2020.

It has said previously that it would like to go from delivering six days a week to five, from Monday to Friday only.

Martin Seidenberg, Royal Mail’s group chief executive, suggested the UK was “being left behind” in having not yet reformed its postal service, adding that the company had been “calling on government and Ofcom to tackle this issue for four years”.

“The lack of action means that we are now facing a much more serious situation,” he said.

Ofcom said Royal Mail’s recent poor performance, which led to the company being fined £5.6m in November last year for missing delivery targets, showed that “people are not currently getting a reliable service”.

Dame Melanie said customers “haven’t known what they can rely on” from the service, but said reducing delivery days or extending delivery times did not represent an “easy pass” for the company.

“They must deliver an improvement in their service. That is necessary whatever happens next,” she said.

Morgan Wild, interim director of policy at the charity Citizens Advice, said any changes to the universal postal service must prioritise consumers “not Royal Mail’s bottom line”.

“We agree that improving reliability is essential. Late post has real consequences – people miss vital medical appointments, legal documents and benefit decisions,” he said.

“Cutting services won’t automatically make letter deliveries more reliable, so we must see proposals to tackle the cause of Royal Mail’s persistent failings.”