One million households set to be affected by Royal Mail’s pilot scheme
Royal Mail is understood to be trialling cuts to Saturday second-class deliveries from next month, with almost a million households set to be affected.
According to national newspapers, the 509-year-old British institution – that’s in the process of being bought with its parent company International Delivery Services (IDS) by Czech billionaire Daniel Křetínský’s EP Group – is about to roll out the scheme at 37 of its 1,200 delivery officers across the UK, scrapping the weekend second-class deliveries.
The exact locations have not been revealed but the pilot is expected to take place at around three offices in each of Royal Mail’s 12 regions to ensure an even spread across the country, while first-class letters deliveries will still be made on all six days – as will parcels even though the universal service obligation to do so only applies to letters.
A Royal Mail spokesman said: “The pilots are designed to ensure everything runs smoothly and we can deliver a better customer experience if we deploy any universal service changes.”
The postal service has been lobbying for change since the pandemic in 2020 as letter volumes fell from a peak of 20billion a year in 2004-2005, to 6.7bn, claiming the business loses up to £2million a day due to the legally-binding USO forcing it to deliver letters to all 32million UK addresses six days a week and parcels on five days.
But David Falkner, Cardology co-owner and the GCA lead on Royal Mail relations, has pointed out: “The narrative of the letters business being a longstanding millstone around Royal Mail’s neck is misleading. Not only do Royal Mail need letters revenues to spread fixed costs within more competitive markets, the most recent results show the letters business revenues grew 12.7% year-on-year, the fastest across IDS.
“The real financial burning platform is the slowdown in Royal Mail’s parcel business, where it faces competition.”
Following RM’s continuing agitation, industry watchdog Ofcom held a consultation early in 2024 which resulted in the watering down of the delivery service’s original demands to cut all Saturday letter deliveries, which would require an Act Of Parliament to change the USO.
Both now say cutting second-class letters, where the price is regulated and currently held at 85p, would be sufficient, with first-class deliveries meaning the USO would be upheld, despite those prices being unregulated and the 22% hike to £1.65 in October being the second inflation-busting rise in 2024, and the fifth increase in three years, making the stamp cost 117% more over the past four years while service levels have fallen.
Alongside these trials in February, Ofcom is due to launch a consultation on the proposal to deliver second-class letters every other working day, with a final decision expected to be made in the summer and the changes rolled out nationwide in 2026 if the plan is agreed.
The Royal Mail spokesman added: “We will only look to implement our new operating model if Ofcom’s new regulations come into force. Until then, the current regulatory framework remains in place and any proposals are subject to change.”
