Nov 26, 2020

Royal Mail could save £225m by ditching Saturday post, says Ofcom

Royal Mail could end Saturday deliveries without a detrimental effect to the public and small businesses, according to a report from Britain's media watchdog. Ofcom found that reducing the letters service to five days a week would potentially allow Royal Mail to make net cost savings of £125m-£225m per year by 2022/23, while still meeting the needs of 97 per cent customers. Any change to the universal service obligation - which imposes a duty on Royal Mail to deliver letters six days a week at a flat price throughout the country - would require an act of parliament. During the first six months of 2020, letter volumes at Royal Mail were down 28 per cent year-on-year, with associated revenues down 20.5 per cent. Royal Mail last week reported a fall in pre-tax profit of 90 per cent to £17m for the six months to September 27, from £173m a year earlier, although revenue jumped 10 per cent to £5.67bn. Mr Williams said the company had increased its automation of parcel sorting and was investing in two new parcel hubs, but added that "Too many parcels are still sorted by hand," and that the business had "Not adapted quickly enough to the decline in letters."

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