Royal Mail says Ofcom postal reforms would increase costs for customers

9th Apr 2025 09:57

(Sharecast News) - Royal Mail has expressed concerns about Ofcom's proposed reforms to the universal postal service, saying they could add "significant costs" to customers.

Royal Mail, part of the International Distribution Services (IDS) group, said in a statement on Wednesday that the regulator's package of proposed changes "will not deliver the efficient, reliable and financially sustainable Universal Service that customers need".

While Royal Mail and Ofcom have jointly proposed to remove the requirement for the postal service to deliver Second Class letters six days a week - instead agreeing to deliver on every other weekday - Royal Mail said that Ofcom's other proposals, such as new reliability targets, are too stringent.

Ofcom's suggested reliability targets - that 99.5% of First Class and Second Class letters are delivered within three and five days, respectively - are "over specified and will add significant cost to the delivery of the Universal Service", Royal Mail said.

Universal Service, which refers to the requirement that basic postal services are provided to all at affordable prices, already costs loss-making Royal Mail between £325m and £675m every year on a net cost basis.

Royal Mail also expressed concerns about proposals for more stringent business postal services, and called to remove "unnecessary" regulation that prevents it from offering parcel tracking for Universal Service customers.

"It is vital that Universal Service reform delivers a postal service which is reliable, affordable and better meets what customers need for both letters and parcels," said IDS chief executive Martin Seidenberg.

"These changes we seek are important measures to ensure we can protect the one-price-goes-anywhere Universal Service for many years to come."