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Royal Mail Group Limited ("Royal Mail")
31 May 2022
2 December 2022
After an investigation, we decided that it would not be appropriate to find Royal Mail in breach of its quality of service performance targets for 2021-22
DUSP condition 1.9.1, and Schedule 7 to the Postal Services Act 2011
Ofcom has today announced our decision that it would not be appropriate to find Royal Mail in breach of its quality of service (QoS) targets for the 2021-22 regulatory period.
Ofcom can consider evidence submitted by Royal Mail of any exceptional events, beyond the company’s control, that may have explained why it missed its targets. Having examined Royal Mail’s submission, we accept that, for much of 2021-22, Covid-19 continued to have a significant, pervasive and unprecedented impact on Royal Mail’s operations. This included:
- unexpected changes in traffic mix (i.e. unusually high volumes of parcels and a lower volume of letters);
- increased and unpredictable staff absences; and
- continued challenges presented by social distancing measures.
In our view, had it not been for the impact of Covid-19, Royal Mail’s performance levels would have been significantly higher, and it is possible that it may have met its targets. As such, and as noted above, we decided it was not appropriate to find Royal Mail in breach of its regulatory obligations for 2021-22.
More information about our decision is available in the non-confidential decision document (PDF, 271.5 KB) published today.
Ofcom has today opened an own-initiative investigation into Royal Mail’s compliance with its quality of service performance targets during 2021-22.
Our rules require Royal Mail to meet specified quality of service performance targets in the provision of universal service products. Among other targets, Royal Mail must:
- complete 99.9% of delivery routes on each day that a delivery is required;
- deliver 93% of First Class mail within one working day of collection;
- deliver 98.5% of Second Class mail within three working days of collection; and
- in respect of stamped and metered mail, deliver 91.5% of First Class products within one working day in each postcode area of the UK (apart from three excluded postcode areas).
Performance against these targets is measured as an average performance level on an annual basis excluding the Christmas period.
On 10 May 2022, Royal Mail announced that it did not meet the above performance targets in 2021-22, as it:
- completed 94.09% of delivery routes for each day in which a delivery was required;
- delivered 81.8% of First Class mail within one working day;
- delivered 95.4% of Second Class mail within three working days; and
- did not meet the postcode area target in any of the 118 postcode areas.
Ofcom takes compliance with quality of service targets very seriously. In light of Royal Mail’s reported performance, Ofcom’s investigation will examine whether there are reasonable grounds for believing that Royal Mail has failed to comply with its obligations under DUSP condition 1.9.1 in respect of the year 2021-22.
Enforcement team (enforcement@ofcom.org.uk)
CW/01260/05/22