Royal Mail has committed to meeting its letter delivery targets by May next year through a £500 million turnaround plan. The postal company, now privately owned, will allow part-time postal workers to increase their hours to enhance service quality. This decision follows an agreement with the Communication Workers Union (CWU) to resolve a longstanding dispute over second-class mail. The implementation of a new letter delivery model will begin nationwide next month.
Under the new plan, Royal Mail will discontinue Saturday second-class deliveries and switch to delivering on alternate weekdays – three days one week and two days the following week. The company aims to enhance first-class next-day delivery to approximately 85% within nine months and achieve the 90% target set by regulator Ofcom within a year. Additionally, Royal Mail plans to deliver 93% of second-class letters within three days within nine months, reaching a 95% target by May next year.
Royal Mail, under the ownership of Czech billionaire Daniel Kretinsky, faced a record £21 million fine from Ofcom in October for failing to meet delivery targets in the previous year. To support the service improvement initiatives, the company plans to invest £500 million over the next five years, with around 6,000 part-time postal workers given the opportunity to extend their weekly hours as part of the second-class post reforms.
Stamp prices have risen recently, with a first-class stamp now priced at £1.80, and a second-class stamp at 91p. Despite the challenges, Mr. Kretinsky expressed regret over late deliveries but maintained that the situation was not deteriorating. Alistair Cochrane, Royal Mail’s CEO, acknowledged the need for improved service and highlighted the company’s commitment to enhancing performance across the UK with significant investment.
Ofcom emphasized the importance of a credible plan supported by investment for Royal Mail’s performance recovery. Natalie Black, Ofcom’s group director, urged Royal Mail to implement the plan effectively to ensure continuous improvement and get performance back on track. Last year, Ofcom approved Royal Mail’s plans to reduce second-class letter deliveries while maintaining first-class and parcel services unchanged.
The recent agreement with CWU aims to extend Universal Service reforms to additional delivery offices, with plans for full network implementation by December. Dave Ward, CWU’s general secretary, emphasized the importance of tangible changes on the ground to address customer service shortcomings at Royal Mail. He stressed the need for proper resource allocation, workforce retention, employee involvement in change deployment, manageable workloads, and effective issue resolution.