The Royal Mail is under investigation by regulator Ofcom for failing to meet delivery targets for the second year in a row, potentially leading to significant fines.
Ofcom's findings reveal that nearly a quarter of first-class and almost one in 10 second-class deliveries were late over the past 12 months, marking the worst performance since records began in 2007. Despite receiving a warning about late deliveries last year, Royal Mail's performance has not improved.
Citizens' Advice, in support of the investigation, highlights that over 6 million people have encountered issues caused by postal delays in the past month alone. Matthew Upton, Executive Director of Citizens' Advice, criticizes Royal Mail's consistent poor service, emphasizing the importance of reliable delivery, especially for essential items such as medical letters and urgent bills.
While Ofcom refrained from imposing fines on Royal Mail for its 2021-22 performance due to the impact of Covid-19, the regulator recently stated that the company's deliveries continue to fall significantly short. Ofcom guidelines state that no more than 7% of first-class post should arrive more than one working day after collection, and less than 1.5% of second-class post should arrive past the three-day window. However, Royal Mail consistently fails to meet these targets.
The influence of Covid-19 as an excuse for subpar performance has diminished according to Ofcom, which suggests that the pandemic can no longer be used as a justification. Last year, nearly one in five first-class items and 5% of second-class items failed to meet their target delivery timeframes.
Royal Mail could face fines of up to 10% for regulatory breaches, amounting to approximately £800 million. While fines for this year's breaches are anticipated to be lower, they are still expected to be in the seven-figure range. Royal Mail was previously fined £1.5 million for similar failures in 2020.
The investigation by Ofcom will likely explore the role of lengthy strikes by postal workers and challenging business conditions in Royal Mail's underperformance. In the past five years, the company has failed to meet at least one of its regulatory targets in four instances. The 500-year-old service, privatized in 2013, faced 18 days of strikes in the latter part of 2022, resulting in a £200 million cost to the business. Resolving disputes with the Communication Workers Union, which may be facilitated by a proposed 10% pay rise, could potentially alleviate future strike actions.
Grant McPherson, Chief Operating Officer of Royal Mail, acknowledged the need to improve the quality of service and expressed the company's commitment to accelerating its transformation to meet customer expectations. Royal Mail apologizes to customers impacted by its performance during a challenging year that has affected its delivery standards. Photo by Dickelbers, Wikimedia commons.
