Yahoo Finance Ofcom launches investigation into Royal Mail after it missed delivery targets
Regulator Ofcom said it has launched an investigation into Royal Mail’s failure to meet its delivery targets in the past year – and could hand out a fine.
The British delivery firm fell short of its performance targets across the 2022 to 2023 financial year for first and second class mail and deliveries.
Some 73.7% of first class mail was delivered within one working day across the year. The target was 93%.
For second class mail, 90.7% was delivered within three working days, compared with the target of 98.5%.
And 89.35% of delivery routes were completed on the required day, well behind the 99.9% target.
Ofcom said it takes quality of service very seriously and could fine Royal Mail if it cannot reasonably explain why it missed the targets.
It added: “In deciding whether the company is in breach of its obligations, we will consider if there were any exceptional events – beyond the company’s control – that may have explained why it missed its targets.”
The pandemic can no longer be used as an excuse for poor delivery performance, Ofcom said.
Last year, an investigation into its missed targets was closed after the regulator ruled that greater staff absences and social distancing regulations resulting from Covid had impacted service.
It also decided not to open an investigation into Royal Mail’s service levels during the 2020 to 2021 financial year because of the “uniquely difficult circumstances” of the pandemic.
But Ofcom dished out a £1.5 million fine for not delivering first class mail on time during the financial year ending 2019.
The probe follows last week’s news that boss Simon Thompson will step down by the end of the year.
His departure was announced weeks after a lengthy dispute with the main postal union came to an end.
Grant McPherson, chief operating officer of Royal Mail, said: “Improving quality of service is our top priority.
“We are committed to accelerating Royal Mail’s transformation and restoring service levels to where our customers expect them to be.
“We’re sorry to any customers who may have been impacted by our performance during a year that has been one of the most challenging in our history.
“With the plans we have in place to drive service levels and reduce absence, we hope and expect to see further progress in the coming months.”
Royal Mail also stressed that its service improved over the first three months of the year, where 94.5% of second class mail was delivered within three working days and 78.9% of first class mail delivered within one.
Furthermore, 18 days of strike action organised by the Communication Workers Union (CWU) “materially impacted” the quality of service, it argued.
It also blamed a high level of staff absences affecting operational performance.
Last month, Royal Mail agreed a deal with the CWU which would see staff get a 10% salary increase and a £500 one-off payment.
The firm said it hopes the agreement will reduce absences, spread out workloads, and rapidly improve quality of service.
The proposed deal will be put to a ballot of union members in the coming weeks.
