Why is Royal Mail failing to deliver? IG News

Irshadgul News report,

Royal Mail could face hefty fines after failing to meet its delivery targets last year as communications regulator Ofcom launched an investigation into the beleaguered postal service.

Quality of service targets require Royal Mail to deliver 93% of first class mail within one working day of collection; deliver 98.5% of second class mail in three business days; And complete 99.9% of delivery routes on the day delivery is required.

However, the company confirmed on Monday that it did not meet all of these targets, with only 73.7% of first-class mail delivered within one working day. It will not be the first time it has been punished for missing delivery targets after receiving a £1.5 million fine in 2019.

The Telegraph stated that tracing its history back to Henry VIII, “the Royal Mail was still one of Britain’s jewels”. But it has fallen on hard times as corporate mismanagement, competition and a terminal decline in letterwriting have left it struggling to stay above water.

What did the papers say?

The former state-owned monopoly service has endured a difficult decade since it was privatized in 2013 by David Cameron’s coalition government. The Guardian said “A long period of decline in the posting of letters and a rapid rise in online shopping, fueling increasing volumes and competition in the more lucrative parcels market, has taken much of this time to try to revive the trade”. “.

As e-commerce returns to pre-Covid levels after a surge in online goods and Covid test kit deliveries during the pandemic, Royal Mail is troubled by a vast, expensive network from Land’s End to John o’Groats, and authorized by the government is Universal Service Obligation (USO) to deliver to every postcode in the UK six days a week for a flat fee”, said the Times.

“It also has a highly unionized workforce that doesn’t want to reduce the value of pay and benefits,” the paper said. and “now the conduct of the nation’s papers is under the microscope”.

In February, in what Sky News described as a “contentious hearing” with MPs on the Business, Energy and Industrial Strategy (BEIS) select committee, Royal Mail chief executive Simon Thompson admitted to prioritizing more lucrative parcels over letters. Did.

Last week, he announced he was stepping down after a bruising two years at the helm, just days before the company’s annual results are expected to “show the 507-year-old postal service the damage from a bleak year.” in which it was battered by an 18-day strike, a reduction in parcel deliveries and a cyber attack on its international delivery operations”, said it’s money.

The biggest problem, according to The New Statesman’s Will Dunn, is that “the core service it is required to provide – universal distribution at fixed prices – is expensive to operate and has declined in popularity”. The number of letters addressed has decreased by 23% since 2019 and is now what it was in the mid-1930s. But while they may be in long-term decline, the papers still generated 44% of the company’s revenue in its last fiscal year.

The Telegraph said that “it will not be long until the letter is completely redundant, at which point” the Royal Mail will become a parcel delivery service like DPD, but probably less reliable.

what next?

According to data from Refinitiv, analysts expect Royal Mail to report a loss of £500 million for the year to the end of March, compared with a profit of £416 million in the previous year. A warning that it is losing more than £1 million a day and may be forced to call in administrators if the situation does not improve has sent the share price of its parent group International Distribution Services (IDS) has fallen by more than 30%. Year.

The challenge to a successor “is to continue the Royal Mail’s never-ending modernization program – but, in theory at least, Thompson has the difficult task of overseeing a deal with the union”, The Times reported. Said. The paper reported that the company plans to shed 10,000 roles from its 150,000-strong workforce as it seeks to tackle its costs and renegotiate Universal Service Obligation to ease its financial pressures. While it would continue to deliver parcels seven days a week, a long-term option would be to drop Saturday letter delivery.

It is worth noting, said Dunn, “The social value of Royal Mail’s services is high; Millions of people still rely on its communication services, a significant proportion of whom are elderly or vulnerable. And in an aging society, a regular door-to-door presence can be important; Some in the industry have suggested further diversification of services such as meter reading.”

He said “it is all but inevitable” that Royal Mail’s letter and parcel delivery arm would be split. “The government will then have to decide whether a company that has been integral to the British identity for five centuries deserves to be withdrawn as a public service or be allowed to become another bankrupt subsidiary of UK plc.” Is.”