Royal Mail proposes reducing deliveries of second-class letters: The small business reaction

Royal Mail has proposed reducing delivery of second-class letters to every other weekday, as part of its efforts to cut costs.

The suggestion was included in a proposal to Ofcom which the struggling company said would save it £300m.

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 arrive on time. Ofcom fined Royal Mail £5.6m last year for its poor performance.

In its proposal, Royal Mail also said the delivery speed of standard bulk business mail, used by large mail shippers for bulk mailings such as bills and statements, should be aligned to second-class, so they arrive within three weekdays instead of two currently.

Ofcom previously proposed Royal Mail dropping Saturday deliveries, but the company did not include that saying it recognises "the importance of next day and Saturday deliveries, especially for the NHS, publishers and senders of greeting cards".

Martin Seidenberg, group CEO of International Distributions Services plc (the holding company responsible for Royal Mail), said:

"The fact that letter volumes have dropped from 20 billion to seven 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 United Kingdom 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."

Royal Mail: What small business owners think

Many small businesses use second-class letter services to deliver products and documents to customers. We asked some founders to share their views on the potential reduction in second-class deliveries.

Bryony Lewis, Enterprise Nation member and founder of T & Belle:

"If these plans go ahead, it would probably force me to switch to first-class postage as the standard shipping option on my website in order to maintain delivery time estimates. Small businesses are already under an incredible amount of pressure from huge corporations like Amazon to offer free or cheap but also fast shipping options to customers.

"With Royal Mail postage prices also going up again recently, I cannot absorb these kinds of increased costs, which would mean that my customers would be hit by a double increase in postage cost."

Becci Coombes, Enterprise Nation member and founder of hyggestyle.co.uk:

"Our experience following the postal strikes was that the service provided by the Royal Mail was definitely not "first in, first out" following any delays; a significant amount of post ended up on the bottom of a large pile somewhere in their system and took many days to clear.

"Post which should take 48 hours currently is routinely taking up to a week, so our concern is that any item not delivered on one of their "off days" is going to end up even further delayed.

"This is yet another blow to small rural businesses who rely on the Royal Mail as the only available service provider, and yet more damage to their reputation as a reliable courier in an increasingly competitive market."

Sarah Laker, founder of Stationery Supplies, two independent stationery shops in Marple and Wilmslow in Cheshire:

"There is something really rather wonderful about receiving a handwritten letter or card through the post; the thought that someone cares about you enough to choose, write and send a card, connecting you both across the miles is really rather wonderful.

"The UK is unique in its love of greeting cards. It's a £1.5bn industry made up of paper mills, publishers, printers, designers and the retailers that sell them.

"Card giving is on the rise despite the poor service currently offered by Royal Mail, and the thought of second class being reduced to two days a week is simply awful. This great British tradition will be severely affected, as will all the businesses along the chain.

"I feel that we should be looking to restore customer confidence in Royal Mail and ensuring an affordable, regular and reliable service for all."

Kayleigh Priest, founder of Kayleigh Marie Designs:

I think it's really poor form to keep increasing prices, yet try to actually reduce the service. Many small business owners, like myself, rely on Royal Mail to post orders and the second-class option has always been a more cost effective option for customers who are choosing the smaller, letter sized prints. 

"By reducing how often they are delivered means those customers will have to wait longer and Royal Mail no doubt will continue increasing the price. It's getting to the point where smaller prints are going to end up unviable from a delivery and cost point of view.  

"It doesn't feel like they have made any communication with the general public or small businesses about how these proposed cuts would actually affect us."

Alison Boutoille, Enterprise Nation member and founder of CityStack:

"I designed our product to ensure it would fit in a mailbox and could be sent as a large letter. The majority of our products are shipped using the second-class delivery option, and the price for first-class has once again increased significantly this month.

"Consequently, our customers will be forced to choose between enduring long wait times or paying a hefty fee for expedited shipment, which is particularly frustrating given that our product itself isn't expensive."