In a troubling turn of events, Royal Mail has failed to deliver approximately a quarter of its first-class post on time in recent months. This marks a significant deterioration in the postal service’s delivery performance, even as it faces an ongoing investigation for missing delivery targets set by the communications watchdog, Ofcom.
According to a recent report from International Distribution Services (IDS), the parent company of Royal Mail, only about 76% of first-class mail arrived within the stipulated one working day in the three months leading up to September 29. This figure is lower than the already concerning 79% achieved in the previous quarter. Furthermore, just 92% of first-class post reached its destination within two days.
The situation is no better for second-class mail, with nearly 93% being delivered on time within three working days – a drop from the 94% recorded in the three months to the end of June. These figures paint a grim picture of Royal Mail’s current state, as it struggles to meet the annual targets set by Ofcom.
Ofcom’s Standards and Royal Mail’s Shortcomings
Ofcom’s rules require Royal Mail to deliver a minimum of 93% of first-class post within one working day and 98.5% of second-class post within three days, across the entire UK. The watchdog has previously described Royal Mail’s performance as “not good enough” and has launched an investigation into the company’s failure to meet delivery time targets in the year leading up to March 2024.
This is not the first time Royal Mail has found itself in hot water with the regulator. In November of last year, Ofcom imposed a hefty fine of £5.6m on the company for failing to meet its first- and second-class delivery targets in the financial year ending March 2023.
Addressing the Issue
In response to the latest figures, Royal Mail’s Chief Operating Officer, Alistair Cochrane, stated that delivering a high-quality service to customers remains the company’s top priority. The postal service claims to be taking action to improve its quality of service and adapt to the structural decline in letter volumes.
A Looming Takeover
The deteriorating delivery performance comes at a critical juncture for Royal Mail, as it faces a potential £3.57bn takeover by Czech billionaire Daniel Křetínský’s EP Group. Křetínský, who is Royal Mail’s largest shareholder, agreed on the takeover with IDS in May. However, the deal is currently under examination by the government under the National Security and Investment Act, given the foreign nature of the buyer and the iconic status of the formerly state-owned service.
According to sources close to the matter, Křetínský has agreed to additional concessions to ensure the deal’s completion. The specifics of these concessions remain undisclosed, but they are likely aimed at addressing concerns over the potential impact of foreign ownership on the national postal service.
An Uncertain Future
As Royal Mail grapples with its performance issues and the impending takeover, the future of the UK’s postal service hangs in the balance. The company faces the daunting task of improving its delivery times, meeting regulatory targets, and navigating the complexities of a foreign takeover – all while adapting to the changing landscape of mail and parcel delivery in the digital age.
The coming months will be crucial for Royal Mail, as it strives to regain the trust of its customers, satisfy the demands of the regulator, and chart a course forward under new ownership. The nation will be watching closely, hoping that this beloved institution can weather the storm and emerge stronger, ready to serve the UK for generations to come.
