Royal Mail calls for reduction in deliveries in postal reforms

(Reuters) -Royal Mail on Wednesday urged British regulator Ofcom to speed up reforms to the universal postal service, including cutting back non-first class deliveries to every other day, to cut costs.

The Royal Mail, which has been struggling with losses and trying to transform and modernise its business as it shifts its focus to parcels, has seen a drop in letter volumes from a peak of 20 billion a year in 2004-05 to seven billion in 2022-23.

“If we want to save the Universal Service, we have to change the Universal Service,” said Martin Seidenberg, CEO of Royal Mail parent International Distributions Services (IDS).

“We have serious concerns that the urgency of the situation is not properly recognised by Ofcom,” he added.

Royal Mail wants Ofcom to introduce reforms by April 2025 at the latest.

The postal service has a legal obligation to deliver letters Monday-Saturday and parcels Monday-Friday as well as offer two delivery speeds – First Class for next day and Second Class for delivery within three days.

It has proposed delivering all non-first class mail every other weekday.

IDS expects to reduce costs by 300 million pounds ($377.3 million) per year, if the proposed reforms were implemented.

The changes would reduce 7,000 to 9,000 daily delivery routes over the next 18 to 24 months and lead to fewer than 1,000 voluntary redundancies, it added.

While there would be no change to the one-price-goes-anywhere service to all parts of the UK and first class mail will be delivered six days a week, standard bulk business mail would arrive within three weekdays instead of two currently, the company said.

Ofcom, which in January called for inputs on the future of the universal postal service, did not immediately respond to Reuters request for comment.

Royal Mail named Heathrow airport executive Emma Gilthorpe as its new CEO on Tuesday. ($1 = 0.7951 pounds)

(Reporting by Eva Mathews and Yadarisa Shabong in Bengaluru; Editing by Savio D’Souza and Shounak Dasgupta; Editing by Sharon Singleton)



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