Royal Mail could axe Saturday postal deliveries after £319m loss

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Royal Mail could be allowed to scrap Saturday postal deliveries as a part of a evaluation anticipated to avoid wasting the firm lots of of hundreds of thousands of kilos.

Ofcom, the UK’s communications regulator, will publish a evaluation subsequent week outlining choices on how Royal Mail can “evolve to more closely meet consumer needs”.

The transfer could save the postal service between £125m and £225m a yr in a call to be made between parliament and the corporate, Ofcom mentioned.

An Ofcom spokesperson mentioned: “We will be inviting views on this, not consulting on specific proposals. It would ultimately be for the UK government and parliament to determine whether any changes are needed to the minimum requirements of the universal service.”

It comes after Royal Mail posted a £319m loss for the primary half of this monetary yr and known as for a discount in postal deliveries to simply 5 days per week between Monday and Friday.

The service blamed a requirment to ship letters six days per week for rising stamp costs as inflicting the rise in day by day prices.

Last summer season the federal government denied its request to cease delivering publish on Saturdays – a transfer which might have wanted approval by MPs.

Announcing the evaluation, Ofcom mentioned: “The last few years have demonstrated the importance of postal services, but the way people use them is changing, and we expect these trends to continue.”

It added that the variety of letters despatched and acquired had declined 46 per cent during the last decade, as folks and companies moved to digital options. With the decline within the variety of letters delivered every day it mentioned “the cost of delivery is increasing”.

Martin Seidenberg, the chief govt of Royal Mail’s homeowners, International Distribution Services, mentioned in its buying and selling assertion this week: “With Ofcom due to publish options for the future of the universal service imminently, now is the time for urgent action.

“We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20bn letters when we are now only delivering 7bn.”