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Posted: Fri 2nd Feb 2024
Royal Mail could reduce delivery of letters to five days a week by dropping Saturday, or even cut deliveries to as little as three days, according to proposed reforms.
The changes proposed by Ofcom said Royal Mail could save around £100m to £200m by switching from six to five days a week, or £400m to £650m by moving to three days.
Another proposal is making changes to existing first class, second class and business products so that most letters are delivered through a service taking up to three days or longer, with a next-day service still available for urgent post.
Dame Melanie Dawes, Ofcom's chief executive, said:
"Postal workers are part of the fabric of our society and are critical to communities up and down the country. But we're sending half as many letters as we did in 2011, and receiving many more parcels. The universal service hasn't changed since then, it's getting out of date and will become unsustainable if we don't take action.
"So we've set out options for reform so there can be a national discussion about the future of universal post. In the meantime, we're making sure prices will remain affordable by capping the price of second class stamps."
Under the universal service obligation (USO), Royal Mail is legally required to deliver letters six days a week and parcels from Monday to Friday, but the number of letters being sent has dropped significantly and Royal Mail says the current system is "not sustainable" and reforms are "urgently needed".
The company's service levels have also deteriorated with many customers complaining that deliveries, including important medical and legal documents, regularly don't arriving on time. Ofcom fined Royal Mail £5.6m last year for its poor performance.
A spokesperson for the prime minister said that the government "would not countenance" allowing Royal Mail to drop its six-day-a-week letter postal service.
Ofcom's consultation on its proposals is open until 5pm on 3 April.
Many small businesses use the Royal Mail to deliver products and documents to customers. The large letter size is often used by entrepreneurs.
We asked some small business owners to share their views on the potential reforms and their general thoughts on the service provided by Royal Mail.
Becci Coombes, Enterprise Nation member and founder of hyggestyle.co.uk:
"I would say that the service currently provided by Royal Mail is one of the stumbling blocks to successfully growing a small business. As a rural enterprise we have traditionally relied on the Royal Mail to ship all our orders, but as we grow sadly I cannot see that they are the right service for us moving forward.
"We work hard to despatch all our orders within 24 hours, putting in all the extra love we can (free gifts, free gift-wrapping, recipe cards with every parcel etc) but unfortunately once we hand those parcels over we are at their mercy.
"It is so disappointing as a business to watch parcels arrive damaged, or end up significantly late or lost during peak times. It is impossible to speak to an account manager regarding any problems and we have continual issues with their business website. Their failure to hit targets directly impacts our reputation.
"The prices paid by us are higher than private customers (they can arrange free collection too, whereas we have to pay). If the Royal Mail was only to deliver five days a week but significantly improve their service I would theoretically be happy with that, but I fear that if they move to this new model, the service will stay just as unreliable, with any savings they make being absorbed rather than targeted at improving their efficiency, improving working conditions for their staff or reducing their ever skyrocketing prices.
"They seem to have missed the point that there are other delivery companies who are increasing their service, not reducing it, so I am unsure how they will stay competitive.
"Our customers also appreciate the fact that their deliveries arrive on a Saturday, so I am seriously considering switching to an alternative provider who could ensure flexibility for deliveries, lower prices and greater reliability if the five day model does indeed come to fruition."
Rachel Smith, Enterprise Nation member and founder of iamrachelshop:
"Small business like mine often work from home and do not have regular hours. I sometimes order silver supplies on a Friday knowing it is likely that they will be delivered by Royal Mail on a Saturday. I also post orders out to customers every day of the week so this may cause customers to receive their jewellery a couple of days later than expected if posted at the end of the week.
"It would be fine if Royal Mail could guarantee 1st class post was delivered within 48 hours but some parcels can take up to a week to reach the buyer!"
Jo Blood, Enterprise Nation member and managing director of Posture People:
"A decision to stop Saturday deliveries would have no impact on me. Our business only operates Monday to Friday, so any post delivered on Saturday would only be looked at on Monday.
"I actually commend the Royal Mail for having a long hard look at their business and taking some actions to ensure that the service can continue into the future (albeit with a new very slightly shortened service).
"As a business owner everyone has to make tough decisions when circumstances change; why should the Royal Mail be any different? Not allowing them to do this could hasten the end of the service, which would be a far worse outcome than not having post on a Saturday."
Stella Coombe, Enterprise Nation member and founder of forsocksake:
"The constant increases in delivery costs for such small/light items along with less actual deliveries have a big impact on my margins and my ability to meet customer expectations. I faced a choice: increase my prices or move my brand to Amazon, which delivers seven days per week and does it fast and fully tracked.
"I am now in the process of moving my brand over to Amazon. Frankly, Amazon are everything that Royal Mail are not. They are a logistics company built for the 21st century and using their FBA service means not having to deal with any more 'where is my parcel emails' from customers which negatively impacted on my brand reputation and which will only increase with the axing of Saturday deliveries."
