Under the Universal Service Obligation (USO) Royal Mail is required to deliver letters six days a week Monday to Saturday, and parcels five days a week from Monday to Friday, to every address in the UK for a uniform price.

The Ofcom annual monitoring report looked at the 2019/20 mostly pre-pandemic period in which 2.8bn parcels were sent and received in the UK. 

In its latest results Royal Mail revealed that growth in online shopping, which has also increased because of the Covid-19 situation, had resulted in parcels overtaking letters for the first time.

In September Royal Mail also said it was exploring “what a rebalanced Universal Service might look like”.

Ofcom stated that reducing the USO letter delivery requirement to five days a week “would still meet the needs of 97%” of residential and SME business users, and would potentially save Royal Mail between £125m-£225m a year.

“However, Royal Mail continues to face significant financial challenges and this saving alone would not be enough to ensure the longer-term sustainability of the universal service,” Ofcom warned. It also criticised Royal Mail for failing to make efficiency gains or meet the targets it had set itself for improving productivity.

Lindsey Fussell, Ofcom’s networks and communications group director, commented: “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.

Union the CWU said it would be the worst possible time to scrap the USO, and the six day service remained “essential”.

The CWU also said it was ironic that the report had been published the day before Black Friday, one of the busiest posting days of the year, “when no other person in the country is thinking about how to cut their postal services”.

Deputy general secretary Terry Pullinger stated: “Ofcom makes reference to the current USO being letters six days and parcel five days, and yet despite making a huge case for the need to be more efficient in delivering parcels, does not recommend moving USO parcels to six days.

“This move would totally benefit the nation, offering affordable, guaranteed, one price goes everywhere universal service six days a week, and if you are going there with parcels why would you not still deliver any available letters – surely that is efficient.”

He said the CWU would support that change, and would also support the introduction of a seven day parcels service.

Separately, direct mail printers and mailing houses have raised concerns about current Royal Mail services levels in some, but not all, areas of the country with deliveries of some campaigns delayed by up to six days.

Local reports from areas including Sheffield, Liverpool, Oxford the Yorkshire Dales and parts of Essex have highlighted regional issues with post, with some residents receiving one large batch of letters a week – or even fortnightly – instead of daily deliveries.

While there is sympathy for the Royal Mail’s situation in battling Covid-related staff absences and changes to working practices because of the pandemic, one DM boss told Printweek he was concerned the organisation was prioritising parcels over mail, and that the opportunity for printed promotions to shine was being tarnished.

A mailing expert commented: “Service levels have fallen through the floor. We’re worried that it is hampering the entire resurgence of DM.”

A frustrated DM printer said: “Our Mailmark dashboard is meaningless. I’m getting the impression they don’t know where the items are. If we knew what the delays were likely to be we could at least plan accordingly.”

Earlier this month the SMP highlight how the Covid-19 situation had provided a boost to mail, and the Guardian also recently reported on brands rebooting catalogue mailings.

Royal Mail had not commented on the service issues at the time of writing.

In its latest research the group stated that spending more time at home during lockdown had resulted in a “huge upswing in the amount of engagement customers are giving to physical mail”.

Ofcom is also undertaking a review of the future regulatory framework for post that will consider issues affecting the broader postal sector as people’s reliance on parcels continues to grow. It will publish a call for inputs in Q4 2020/21.