Royal Mail Persists with Saturday Post-Elimination Efforts Following Union Concessions

May 1, 2024

Royal Mail’s efforts to discontinue second-class Saturday deliveries continue, with parent company International Distributions Services (IDS) pushing for reforms to the Universal Service Obligation (USO). The USO currently mandates six-day postal delivery, but with letter volumes declining significantly since 2011, Royal Mail argues that the current model is financially unsustainable.

IDS proposes maintaining Monday to Saturday delivery for first-class post while moving to alternate-day delivery for second-class mail. Martin Seidenberg, IDS’s CEO, emphasizes the need for reform to ensure financial sustainability and growth. However, any changes to the USO would require approval from Ofcom and potentially Parliament.

Ofcom has called for a national debate on postal service reform and plans to provide an update in the summer. Royal Mail’s proposals aim to improve service speed, reliability, and cost efficiency, potentially saving up to £300 million per year. Despite support from some quarters, including Prime Minister Rishi Sunak, opposition remains, and any changes would need parliamentary approval.

Previously resistant, the Communication Workers Union (CWU) now acknowledges the financial challenges facing Royal Mail. Late last year, IDS reported significant operating losses, prompting speculation about a possible takeover. EP Group, led by Daniel Křetínský, made a £3 billion bid for IDS, sparking a surge in IDS’s share price. While IDS’s board rejected the proposal, further discussions remain possible.