Royal Mail will now deliver second-class letters only on weekdays, no longer providing Saturday service, following a regulatory reform announced by Ofcom aimed at reducing costs amid declining letter volumes. First-class mail delivery will remain six days a week, as mandated under the updated Universal Service Obligation (USO).
Ofcom Reshapes UK Postal Services Amid Declining Letter Use
The industry regulator Ofcom has confirmed significant changes to Royal Mailโs delivery obligations, allowing the company to cut second-class letter deliveries from six to five days a week. The decision reflects wider shifts in mailed correspondence, with fewer letters being sent annually, leading to increasing operational costs and rising stamp prices.
Under the existing USO, Royal Mail is required to deliver letters six days each week Monday to Saturday and parcels five days a week. Ofcomโs reform modifies this framework, aiming to ensure the universal postal service remains financially viable in a changing communications landscape.
Natalie Black, Ofcomโs Group Director for Networks and Communications, emphasized the necessity of reform. โThese changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival,โ she said. However, Black also warned that modifying delivery obligations alone will not resolve service problems. โThe company now has to play its part and implement this effectively.โ
Adjusted Delivery Targets to Reflect New Realities
Alongside reducing second-class delivery days, Ofcom has revised delivery targets to balance service reliability with operational feasibility. The target for first-class mail delivery next-day has eased slightly from 93% to 90%. The three-day delivery target for second-class mail has been adjusted from 98.5% to 95%.
To address concerns over extended delays, a new measure requires 99% of mail to be delivered no more than two days late. This aims to curb the frequency of excessively delayed mail, providing a clearer incentive for Royal Mail to improve punctuality even as service targets are relaxed.
Royal Mail Welcomes Reforms as โSupport for Sustainabilityโ
International Distribution Services (IDS), Royal Mailโs parent company, described the announcement as positive for UK customers. IDS Chief Executive Martin Seidenberg highlighted the extensive consultation process informing the changes.
โThese changes follow extensive consultation with thousands of people and businesses to reflect their needs and the realities of how customers send and receive mail today,โ Seidenberg said. He characterized the revised USO as providing the โfoundation for a reliable, efficient and financially sustainable Universal Service.โ
Despite these reassurances, the company acknowledges the operational challenges posed by declining volumes. Royal Mailโs letter volumes have fallen sharply in recent years from 11 billion annual letters in 2000 to fewer than 5 billion in 2023 and continuing to meet six-day delivery obligations has strained resources.
Background: The Universal Service Obligation and Postal Industry Trends
The Universal Service Obligation obliges Royal Mail to deliver postal items to every address across the UK at a uniform price, maintaining six-day delivery for letters and five days for parcels. Introduced to guarantee nationwide universal postal access, the USO has increasingly come under pressure as digital communication reduces letter volumes.
Royal Mailโs revenues have been squeezed by this decline, even as operational costs for maintaining daily deliveries across rural and urban regions remain high. The COVID-19 pandemic accelerated shifts toward electronic communications and online shopping, reshaping parcel volumes but reducing traditional letter usage.
With fewer mailed items, Royal Mail has repeatedly raised stamp prices to cover fixed network costs, a move impacting affordability for consumers and small businesses relying on postal services.
Broader Implications for Consumers and Businesses
Postal service users, including small enterprises and vulnerable demographics reliant on physical mail, may experience changes in delivery timetables and reliability. While urgent first-class mail will continue to receive six-day coverage, second-class mail may take longer without Saturday delivery, potentially affecting correspondence such as bills, notices, and non-urgent communications.
Consumer advocacy groups have called on Royal Mail and Ofcom to ensure that service quality does not decline disproportionately, particularly in rural communities where alternatives may be limited.
Dr. Sylvia Harvey, a postal services expert at the University of Manchester, commented on the reformโs wider context: โThese changes reflect a pragmatic response to evolving market conditions. However, sustaining trust in the universal service requires ongoing investment and transparency from Royal Mail.โ
The Future of Royal Mail and the Universal Service
The reforms signal a significant shift in the future trajectory of the UKโs postal system, balancing economic sustainability with public service requirements. The regulatory framework now allows Royal Mail to realign services with contemporary usage, but execution remains crucial.
โAs digital coexistence continues, Royal Mailโs challenge will be to innovate its offerings while maintaining the universal access that millions depend on,โ noted Professor Harvey.
Ofcom has affirmed it will continue monitoring Royal Mailโs performance against new targets, with enforcement mechanisms to ensure compliance and protect consumers.
Conclusion
The UKโs postal service is undergoing fundamental changes as declining letter volumes drive a regulatory overhaul. Ofcomโs decision to reduce second-class letter delivery to five days a week and relax service targets aims to balance financial sustainability with service reliability. While these reforms have been welcomed by Royal Mailโs leadership, successful implementation and ongoing oversight will determine their impact on customers and the broader postal ecosystem.
For more detailed analysis and ongoing coverage of US labor markets, trade policies, UK government, finances and markets stay tuned toย ย PGN Business Insider.
