Ofcom investigates Royal Mail for failing to meet first class delivery targets

28 May 2024 , 11:41

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Ofcom investigates Royal Mail for failing to meet first class delivery targets

An investigation into Royal Mail is now underway following revelations that less than 75% of first class post was delivered on time over the last year.

International Distribution Services (IDS), the parent company of Royal Mail, revealed in its yearly financial results that 74.5% of first class mail arrived within one working day. This breaches Ofcom's guidelines which stipulate that 93% of first class mail should be prompt and excluding Christmas, be delivered inside this window.

Royal Mail also failed to meet its 98.5% target for second class post to reach recipients within three days, only 92.4% made it. Ofcom warned: "If it does not provide a satisfactory explanation and we determine that Royal Mail has failed to comply with its obligations, we will consider whether to impose a financial penalty."

The company was hit with a £5.6m fine from Ofcom as recently as last year due to failing to hit targets for 2022/23. The financial results were part of a statement which also revealed that Royal Mail's losses actually reduced to £348 million, an improvement from £419million from the year closing March 31.

Nevertheless, Martin Seidenberg, IDS's boss, said: "We have improved quality, won back customers lost during industrial action, controlled costs and delivered Christmas for our customers. Positive momentum is building, although there is hard work in front of us to get back to profitability."

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IDS is currently awaiting a potential buyout offer from Czech billionaire Daniel Kretinsky, with no firm offer yet on the table. The company has stated that it is "minded" to accept a proposed bid of approximately £3.5 billion put forward on May 15.

Earlier this month, Business Secretary Kemi Badenoch emphasised the need to protect Royal Mail's universal service obligation in any sale of the firm. IDS has previously mentioned that Mr Kretinsky agreed to provide a set of "contractual undertakings" to safeguard key public interest factors.

This includes recognising Royal Mail's status as a significant part of national infrastructure, commitments to maintain six-day-a-week first class letter deliveries under the universal service, protect workers' rights and preserve the Royal Mail brand, as well as its UK headquarters and tax residence. Mr Kretinsky has until 5pm on May 29 to make a firm offer.

Lawrence Matheson