Royal Mail set to reduce delivery days and cut targets for first and second class post

The postal service has also been told to deliver Second Class mail every other weekday and cut its delivery targets for both First and Second Class letters in a bid to cut costs.

Royal Mail has been delivering fewer letters every year - just 6.6 billion a year now compared to 20bn 20 years ago.

Since 2008 the number of addresses has risen from 28m to 32m, but revenue has plummeted from £6.9bn to £3.7bn at the same time.

And revenue does not equal profit. Royal Mail made a loss of £348m in 2023/24, and in 2022/23 it made a loss of £419m.

Ofcom, the postal industry's regulator, has proposed the new delivery dates, estimating alternate day delivery would save Royal Mail between £250m and £425m if implemented successfully.

Delivery targets are also being cut.

Currently First Class post must be delivered the next day in 93% of occasions. This will reduce to 90% under the plans.

Second Class mail must be delivered within three days 98.5% of the time, but Ofcom has proposed dropping this to 95%.

This is so customers don't have to pay more for their post, Ofcom said.

NimbleFins previously reported how the cost of a First Class stamp is now £1.65, having risen five times in two years.

This is despite post regularly not being delivered on time, which has resulted in Ofcom fining Royal Mail more than £16m.

Cutting costs could “enable it to improve reliability and redeploy existing resources to growth areas such as parcels”, Ofcom said. But added the reforms were “unlikely to be enough on its own to secure the longer-term financial sustainability of universal service”.

It added: “Royal Mail must invest in its network, become more efficient and improve its service levels in both parcels and letters.”

Explaining the delivery changes, Ofcom said: "Given the postal market has changed significantly since Royal Mail’s delivery standards were set two decades ago, we believe it is right to re-assess these targets with the future in mind, as has been done in many other countries already.

"Maintaining the current higher standards would carry higher costs which would need to be recovered through higher prices. Research indicates that people are more willing to accept a reduced quality of service than price rises to pay for investment in higher quality." Ofcom research also found only 4% of users think they would be very significantly impacted by the proposed changes to Second Class deliveries.

It is asking the public for its opinions on the proposals by April 10, before an official decision is published in the summer. To have your say click here.

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