Sony Pixel Power calrec Sony

Delivering postal users' needs in a digital age

26/11/2020

Delivering postal users' needs in a digital age Add to Your Pages

26 November 2020

Royal Mail needs to become more efficient and modernise its parcel network

New Ofcom research shines a light on changing attitudes to postal services

Reducing letter deliveries to five days a week would still meet the needs of nearly all people and businesses

But changing delivery requirements alone would not sustain the universal service in the long term

Ofcom is calling on Royal Mail to modernise its network and become more efficient, in order to sustain the universal service and keep pace with postal users' changing needs.

The postal market has changed dramatically in recent years. The number of letters people send and receive has fallen by around 5% each year since 2015, as people increasingly rely on email and other online communications.

Growth in online shopping has seen overall parcel volumes increase at a rate of around 10% per year since 2015. And these trends seem to have accelerated during the coronavirus pandemic, with Royal Mail reporting a 31% increase in its UK parcel volumes between April and September this year.

While the pandemic has made 2020 a particularly challenging year for Royal Mail, the issues facing the company due to the changing market and consumer behaviour were apparent before the pandemic started to have an impact.

Parcel delivery: Royal Mail must modernise and become more efficientOfcom's annual monitoring report on the postal market sets out data and trends within the postal sector, and examines Royal Mail's performance. In 2019/20, 2.8 billion parcels were sent and received in the UK one billion more than in 2013 in a market now worth over 10bn in revenues.

Our analysis of Royal Mail's efficiency shows that costs in the part of the business responsible for the universal service increased last year. The company failed to make efficiency gains or meet the targets it set itself for improving productivity.

Unless Royal Mail can modernise its network to adapt to parcel customers' changing needs, and operate more efficiently, the sustainability of the universal service could be at risk in the longer term.

Letter delivery: does the universal service reflect users' needs?Under legislation, the universal postal service requires Royal Mail to deliver letters six days a week (Monday to Saturday) and parcels five days a week (Monday to Friday) to every address in the UK, at a uniform price.

With the market continuing to change rapidly, Ofcom has carried out a comprehensive review of the needs of postal users across the UK, to see if the delivery requirements Royal Mail has to meet still reflect what people and businesses need today.[1]

We have asked people and businesses how they feel about a range of hypothetical changes to the universal service, to find out what would meet their needs. Any changes to the universal service's minimum requirements could only be made by Government and Parliament, but the findings give an insight into how people's attitudes to postal services have evolved.[2]

Our research found that the current six-day-a-week letter delivery requirement meets the needs of 98% of residential users and 97% of small and medium businesses (SMEs) in the UK. Reducing this to five days a week, but leaving all other elements of the service unchanged, would still meet the needs of 97% of residential and SME users.[3]

This suggests that reducing the letter deliveries requirement to five days a week would reflect postal users' reasonable needs. It would potentially allow Royal Mail to make net cost savings of around 125-225m per year.

However, Royal Mail continues to face significant financial challenges and this saving alone would not be sufficient in itself to ensure the longer-term sustainability of the universal service.

Lindsey Fussell, Ofcom's Networks and Communications Group Director, said: Our research suggests that people's needs would still be met if letter deliveries were reduced from six days a week to five.

It would ultimately be for Parliament to decide whether this change is needed. However, Royal Mail must still modernise and become more efficient, to keep pace with customers' changing needs.

Next stepsWe have researched whether the minimum requirements of the universal service reflect the reasonable needs of postal users. It would be for the UK Government to determine whether any changes are needed to these minimum requirements and to bring any proposals before Parliament.

Separately, we are reviewing the future regulatory framework for post. This will consider issues affecting the broader postal sector, as people's reliance on parcels continues to grow. For example, we will look at continuing the requirements for Royal Mail to provide wholesale access to its network, and whether extra consumer protections are required in the parcels market. We will consult on these issues next year and conclude this review in 2022.

NOTES TO EDITORS

Nationally representative samples of 4,596 UK adults and 971 businesses were surveyed at the end of 2019. This was supplemented by discussion groups across the UK. We subsequently surveyed 2,366 adults in summer 2020 to assess how far users' views may have changed as a result of the Covid-19 pandemic. Our review has focused on the minimum requirements of the universal service, but we also asked for people's views on hypothetical changes to other features. We carried out our last review of postal users' needs in 2012/13.

The Postal Services Act 2011 sets out the minimum requirements of the universal postal service and the need for the provision of that service to be financially sustainable and efficient. Ofcom can specify other features of the universal service, such as requiring the choice of a first-class and second-class serv
LINK: https://www.ofcom.org.uk/__search/s/redirect?collection=web&url=https:...
See more stories from ofcom

More from OFCOM

12/02/2021

Ofcom fines O2 10.5m for overcharging customers

Ofcom fines O2 10.5m for overcharging customers Add to Your Pages 12 February 2021 O2 broke Ofcom's rules by failing to provide customers with accu...

04/02/2021

Ofcom revokes CGTN's licence to broadcast in the UK

Ofcom revokes CGTNs licence to broadcast in the UK Add to Your Pages 04 February 2021 London, 10:15 GMT, 4 February 2021: Ofcom has today withdrawn the ...

03/02/2021

New plans for seamless broadband switching

New plans for seamless broadband switching Add to Your Pages 03 February 2021 Proposals for a new one touch' process to cut out the hassle of broad...

17/12/2020

Gigabit broadband reaches four in ten Scottish homes

Gigabit broadband reaches four in ten Scottish homes Add to Your Pages 17 December 2020 New Ofcom figures reveal broadband and mobile coverage across Sc...

17/12/2020

Gigabit broadband reaches one in four homes

Gigabit broadband reaches one in four homes Add to Your Pages 17 December 2020 New figures reveal broadband and mobile coverage across the UK 8m homes ...

15/12/2020

Maggie Carver appointed Ofcom interim Chair from January

Maggie Carver appointed Ofcom interim Chair from January Add to Your Pages 15 December 2020 The Government has appointed Maggie Carver as Ofcom's in...

12/12/2020

BT fined for breaking Ofcom rules in Northern Ireland tender

BT fined for breaking Ofcom rules in Northern Ireland tender Add to Your Pages 11 December 2020 BT failed to meet regulatory obligations during procurem...

09/12/2020

Traditional UK broadcasting at risk without radical shakeup, Ofcom warns

Traditional UK broadcasting at risk without radical shakeup, Ofcom warns Add to Your Pages 08 December 2020 New laws and rules needed for public service...

26/11/2020

Delivering postal users' needs in a digital age

Delivering postal users' needs in a digital age Add to Your Pages 26 November 2020 Royal Mail needs to become more efficient and modernise its parce...

25/11/2020

Broadcasters must look beyond London and reach the whole UK

Broadcasters must look beyond London and reach the whole UK Add to Your Pages 25 November 2020 Ofcom calls on industry to reflect wider range of geograp...

25/11/2020

Ofcom appoints six new Content Board members

Ofcom appoints six new Content Board members Add to Your Pages 24 November 2020 Ofcom has appointed six new members to its Content Board. Ofcoms Conte...

07/11/2020

Vulnerable customers must be treated fairly

Vulnerable customers must be treated fairly Add to Your Pages 23 July 2020 Ofcom sets out how phone, broadband and pay-TV companies should treat those w...

28/10/2020

Mobile firms to be banned from selling locked' handsets

Mobile firms to be banned from selling locked' handsets Add to Your Pages 27 October 2020 New rules to help customers put off from switching becaus...

16/10/2020

Reappointment of Mairi Kidd to MG ALBA board

Reappointment of Mairi Kidd to MG ALBA board Add to Your Pages 30 April 2020 Ofcom has today announced the reappointment of Mairi Kidd to the board of M...

16/10/2020

Ofcom awards six new community radio licences (May 2020)

Ofcom awards six new community radio licences (May 2020) Add to Your Pages 12 May 2020 Ofcom has today announced the award of six new community radio li...

16/10/2020

Broadband networks stand firm during pandemic

Broadband networks stand firm during pandemic Add to Your Pages 13 May 2020 Ofcom analysis shows UK broadband speeds have withstood a surge in demand du...

16/10/2020

Jonathan Oxley to step down

Jonathan Oxley to step down Add to Your Pages 13 May 2020 Ofcom has today announced that Jonathan Oxley, Group Director for Competition and Board member...

16/10/2020

Ofcom appoints Alison Marsden as Director of Content Standards, Licensing and Enforcement

Ofcom appoints Alison Marsden as Director of Content Standards, Licensing and En...

16/10/2020

New Board appointment for Channel 4

New Board appointment for Channel 4 Add to Your Pages 29 May 2020 Ofcom has today announced the appointment of a new non-executive director to the Board...

16/10/2020

Ofcom's General Counsel Polly Weitzman to move on

Ofcoms General Counsel Polly Weitzman to move on Add to Your Pages 01 June 2020 Ofcom has today announced that Polly Weitzman, Ofcom's General Couns...

16/10/2020

UK's internet use surges to record levels

UK's internet use surges to record levels Add to Your Pages 24 June 2020 Adults spending record 4 hours a day online on average, as coronavirus chan...

16/10/2020

Royal Mail fined 1.5m for missing 2018/19 delivery target

Royal Mail fined 1.5m for missing 2018/19 delivery target Add to Your Pages 10 July 2020 91.5% of first-class post was delivered next working day in 20...

16/10/2020

Ofcom awards three new community radio licences in Northampton

Ofcom awards three new community radio licences in Northampton Add to Your Pages 22 July 2020 Ofcom has today announced the award of three new community...

16/10/2020

Broadband customers to save millions following Ofcom review

Broadband customers to save millions following Ofcom review Add to Your Pages 28 July 2020 Out-of-contract customers could save over 270m a year in tot...

16/10/2020

Ofcom confirms plans for spectrum auction early next year

Ofcom confirms plans for spectrum auction early next year Add to Your Pages 03 August 2020 January auction for important airwaves to boost mobile capaci...

16/10/2020

UK talks for longer during lockdown

UK talks for longer during lockdown Add to Your Pages 08 October 2020 Callers spent around 50% longer on their mobiles during early stages of the corona...

08/04/2020

Ofcom sets out licensing plans for small-scale DAB

Ofcom sets out licensing plans for small-scale DAB Add to Your Pages 07 April 2020 Local radio listeners will be able to tune into new digital stations ...

03/04/2020

Changing attitudes of viewers and listeners revealed

Changing attitudes of viewers and listeners revealed Add to Your Pages 03 April 2020 TV and radio programmes that are unsuitable for children, or which ...

25/03/2020

Helping broadband and mobile users stay connected

Helping broadband and mobile users stay connected Add to Your Pages 25 March 2020 As families work and learn at home, Ofcom launches practical tips to g...

25/03/2020

Ofcom awards six new community radio licences (March 2020)

Ofcom awards six new community radio licences (March 2020) Add to Your Pages 25 March 2020 Ofcom has today announced the award of six new community radi...

13/03/2020

Ofcom finalises rules for mobile airwaves auction

Ofcom finalises rules for mobile airwaves auction Add to Your Pages 13 March 2020 New airwaves will boost mobile capacity and enhance 5G services Airwa...

10/03/2020

Ofcom welcomes shared rural network' agreement to improve mobile coverage

Ofcom welcomes shared rural network' agreement to improve mobile coverage Add to Your Pages 09 March 2020 The Government has announced it has reach...

03/03/2020

Ofcom awards four new community radio licences (February 2020)

Ofcom awards four new community radio licences (February 2020) Add to Your Pages 03 March 2020 Ofcom has today announced the award of three new communit...

15/02/2020

Companies must tell customers about their best deals

Companies must tell customers about their best deals Add to Your Pages 14 February 2020 Providers must now tell you when your contract's up, and wha...

12/02/2020

Ofcom Board appoints Dame Melanie Dawes as Chief Executive

Ofcom Board appoints Dame Melanie Dawes as Chief Executive Add to Your Pages 12 February 2020 The Ofcom Board has today announced the appointment of Dam...

12/02/2020

Ofcom response to Government announcement on online harms regulation

Ofcom response to Government announcement on online harms regulation Add to Your Pages 12 February 2020 Jonathan Oxley, interim Chief Executive: We sha...

04/02/2020

Parents' rising concern over children online (Wales)

Parents rising concern over children online (Wales) Add to Your Pages 04 February 2020 Gaming and self-harm among biggest concerns Half of older childr...

04/02/2020

Parents' rising concern over children online

Parents' rising concern over children online Add to Your Pages 04 February 2020 Gaming and self-harm among biggest concerns Half of older children ...

30/01/2020

Ofcom awards four new community radio licences (January 2020)

Ofcom awards four new community radio licences (January 2020) Add to Your Pages 30 January 2020 Ofcom has today announced the award of four new communit...

21/01/2020

Ofcom response to the CMA's super-complaint update

Ofcom response to the CMA's super-complaint update Add to Your Pages 21 January 2020 Lindsey Fussell, Ofcom's Consumer Group Director, said: We...

09/01/2020

Helping customers get fair treatment and fair prices

Helping customers get fair treatment and fair prices Add to Your Pages 09 January 2020 New scorecards help customers compare phone and broadband firms ...

08/01/2020

Supercharging investment in fibre broadband

Supercharging investment in fibre broadband Add to Your Pages 08 January 2020 Ofcom sets out conditions to help bring full fibre nationwide Improving t...

20/12/2019

Latest Scottish broadband and mobile coverage revealed

Latest Scottish broadband and mobile coverage revealed Add to Your Pages 20 December 2019 Number of homes with access to superfast broadband increased b...

20/12/2019

Latest UK broadband and mobile coverage revealed

Latest UK broadband and mobile coverage revealed Add to Your Pages 20 December 2019 Full-fibre broadband now available to around three million homes So...

18/12/2019

Celebrity Big Brother tops TV complaints for the decade

Celebrity Big Brother tops TV complaints for the decade Add to Your Pages 18 December 2019 Ofcom publishes most complained-about shows of the 2010s An ...

17/12/2019

Ofcom plans ban on mobile firms selling 'locked' phones

Ofcom plans ban on mobile firms selling locked phones Add to Your Pages 17 December 2019 New rules also proposed to make broadband switching easier Mob...

21/11/2019

Ofcom's Mansoor Hanif to step down

Ofcoms Mansoor Hanif to step down Add to Your Pages 21 November 2019 Ofcom has today announced that Mansoor Hanif has stepped down from his role as Chie...

07/11/2019

Ofcom appoints Jonathan Oxley as interim Chief Executive

Ofcom appoints Jonathan Oxley as interim Chief Executive Add to Your Pages 06 November 2019 The Ofcom Board has today announced that Jonathan Oxley will...

29/10/2019

Releasing airwaves for mobile services next year

Releasing airwaves for mobile services next year Add to Your Pages 28 October 2019 Ofcom updates on proposals to auction new frequencies Airwaves wil...

25/10/2019

Ofcom welcomes mobile firms' agreement to build a shared rural network'

Ofcom welcomes mobile firms' agreement to build a shared rural network' Add to Your Pages 25 October 2019 Ofcom spokesperson: We warmly welc...