Industry News

Ofcom Review Finds Five-Day Letter Deliveries Would Still Reflect Postal Users' Needs

OFCOM has published the results of its Review of Postal Users’ Needs,which assessed the performance of Royal Mail delivery requirements and whether the service still reflects the needs of its customers.

The review found that Royal Mail would be able to cut Saturday letter deliveries and still meet the needs of 97% of consumers and small businesses, suggesting that reducing letter deliveries to five days a week would still reflect postal users’ reasonable needs.

OFCOM has indicated that the move from delivering letters six days per week, which is mandated as part of its current Universal Service Obligation (USO), to five days would potentially allow Royal Mail to make savings of around £125m-£225m per year.

The report notes the dramatic change in the postal market in recent years as the number of letters sent and received continues to fall (average 5% decline each year from 2015), and simultaneously the growth in online shopping has seen overall parcel volumes increase (at a rate of around 10% per year since 2015).

These developments appear to have accelerated during the coronavirus (Covid-19) pandemic, with Royal Mail reporting a 31% rise in its UK parcel volumes between April and September 2020.

However, OFCOM notes that eliminating Saturday service alone would not be enough to make the universal service sustainable in the long term. 'Unless Royal Mail can modernise its network to adapt to parcel customers' changing needs, and operate more efficiently, the sustainability of the universal service could be at risk in the longer term' they said.

Furthermore, any change to Royal Mail's USO would need to be made by Parliament.

PPA has previously responded to rumours of long-term changes the the USO following the suspension of Saturday deliveries earlier in the pandemic. We wrote to Royal Mail earlier this year expressing concern about the impact of these changes on publishers who rely on Royal Mail a key route to market for delivery of subscription copies. PPA also raised concerns with Government ministers and regulators, who would have to approve any changes.

In response, Royal Mail Interim CEO Stuart Simpson said: “We want to play our part in helping publishers to adapt to these new trends and ensure that printed magazines remain available to those who want them delivered to their home or work address.

“We recognise the challenges specific to the publishing sector and will work with you to explore potential mitigations if we believe change is necessary.”

Remarking on the decision to suspend letter deliveries on Saturday May 2 until June 13, Mr Simpson added: “I recognise this had an impact on many of your members and regret that we were not able to give more notice. We would always seek to give as much Notice of operational changes as possible and hope that such a sudden alteration will not be necessary again."

PPA continues to advocate on behalf of publishers to Royal Mail, Government and Regulators to ensure the USO can be maintained in a sustainable way while meeting the needs pf publishers.

To help with our ongoing efforts, we are calling on members to participate in a confidential **[survey](https://www.surveymonkey.co.uk/r/PPA-Postal-Survey) on the anticipate future postal needs, allowing the PPA to represent an accurate picture of publisher views to Royal Mail, Ofcom and Government before any changes are decided.**

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