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Business / Erosion of postal delivery service or much needed reform?

The mail arrives at Belmont, Unst. photo: Royal Mail

ISLES MP Alistair Carmichael has called on postal regulator Ofcom to reject proposals from Royal Mail to cut back on delivery services.

On Wednesday the company published proposals to cut services including changing the delivery of all non first class letters to every other weekday, though first class would continue to be delivered six days a week.

The plans are aimed at saving up to £300 million a year.

Royal Mail is making losses and the company says reform of the universal service obligation is urgently needed.

If approved the changes would mean daily delivery routes are cut by between 7,000 to 9,000 within two years, and would likely lead to job cuts.

Orkney and Shetland MP Carmichael said these latest proposals made even less sense “than what we have had earlier from Royal Mail” and urged the company to take advantage of its dominant market position.

“Sending postmen out with first class mail and leaving second class mail behind in the delivery office makes no sense,” he said.

“Instead of finding ways to reduce the service provided, Royal Mail should be sorting out their board level management to get the full benefit of the enormous advantage that they have from being the only company delivering door to door every day across the country.

Orkney and Shetland MP Alistair Carmichael. photo: Shetland News

“Royal Mail have labour issues like every other sector in the country but being able to deliver to every house in the country should allow them to absolutely dominate the market – they shouldn’t have to be doing this.

“These proposals are a non-starter, and the government and Ofcom should reject them out of hand.

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“They are bad for people who rely on the postal service and they are, ultimately, bad for Royal Mail as they undermine the basic concept of the universal service.”

But Martin Seidenberg, the chief executive of International Distribution Services which owns Royal Mail, said the universal service obligation was no longer sustainable and in urgent need of being reformed.

Royal Mail posted losses of £419 million in 2022/23 and £319 million for the first six months of 2023/24, he said.

“The fact that letter volumes have dropped from 20 billion to seven billion a year means that the Universal Service is now unsustainable,” the chief executive said.

“If we want to save the universal service, we have to change the universal service. Reform gives us a fighting chance and will help us on the path to sustainability.

“Our proposal is based on listening to thousands of people across the United Kingdom to ensure it meets their needs.

“We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.

“We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait.”

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