RM trying to cut costs to be competitive on price with other companies is a race to the bottom.
There isn't one of them, or the combination of all of them for that matter, who can deliver the volumes the market produces. RM could sell themselves as the only UK delivery company that actually delivers on it's promises....for a premium price.
But can they justify a premium price? I've had two item delivered by EVRi this week, whilst one was a day late as the driver couldn't find my house, I've would nothing to really complain about as both items arrived undamaged.
If tomorrow I had to send something, or receive it, and the cost was £3 for RM v £2.50 for EVRi then I'm not sure I'd choose RM.
There isn't one of them, or the combination of all of them for that matter, who can deliver the volumes the market produces. RM could sell themselves as the only UK delivery company that actually delivers on it's promises....for a premium price.
[/quote]
They can promote that idea but there is still a limit to what customers are willing to pay so the premium couldn't be much more than the standard competitive price. The other thing is that Royal Mail is so dysfunctional the reliability of the business is inconsistent across the UK. I cannot see that reliability increasing any time soon.
DM26 is meant to bring stability but without a doubt it is going to lead to high sickness levels and yet more turn over in staff so I can't see Royal Mail meeting that standard. Unfortunately Royal Mail was once known for its reliability and trust on the doorstep. The leadership have absolutely destroyed that reputation over the preceding years. I doubt it will come back.
Managers consistently scan parcels as attempted when they haven't left the depot or as inaccessible. Despite being against policy ,a culture of putting parcels in bins, over gates, on doorsteps has been cultivated by posties, encouraged by managers so we are no better than other couriers at times. Stopping this wont help because customers want us to do this to and complain if we don't!
The unfortunate thing is that some of the other couriers are more reliable than royal mail at times because of their worse pay, terms and conditions. If they don't deliver the parcels they don't get paid! Or they lose their route! We on the other hand have a time to work to which can make us less reliable in peak periods for example.
I am not saying we are the most unreliable courier but this premium idea just isn't realistic. It won't transform our jobs or alievate financial stress, There is a limit that customers will pay and frankly our reputation does not merit being labled as delivering on its promises. It would be gaslighting at best!
The fact is could Royal Mail sustain itself just by delivery of letters. Would the Uso be functional? No.
Is the USO now dependent on parcels revenue? I would argue yes so in essence there is a cross subsidy going on.
I would like to see this years annual report of letters/ parcels revenue and proportion.
Personally I find it sad, I would much rather deliver mail than parcels.
Parcels received £4.3 billion in revenue while letters received £3 billion in the latest annual report 2025/26, so they account for over 40% of the revenue.
RM isn't just another parcel courier and still has a legal obligation to maintain the nationwide network. The fact that RM still generate billions in revenue from letters isn't something that they will want to lose. That is why finding a business model where parcels support the network without sacrificing the very things that made RM different i.e. trusted brand, nationwide coverage and its reliability very difficult.
Becoming another low-cost courier is unlikely to solve that problem.
When letters were at the peak in 2004 at circa 20 billion stamps where 30p and 21p
Fast forward to today it’s 5/6 billion but costs are £1.80 and 91p
Plus DSA wasn’t a thing if I remember
So at no time have RM made less revenue than 22 years ok so letters must still be very valuable part
Look at the graph, where do you expect letters to be in 5 years time?
I think people start needing to be realistic about where letters are are going to end up.
You do not have the required permissions to view the files attached to this post.
The fact is could Royal Mail sustain itself just by delivery of letters. Would the Uso be functional? No.
Is the USO now dependent on parcels revenue? I would argue yes so in essence there is a cross subsidy going on.
I would like to see this years annual report of letters/ parcels revenue and proportion.
Personally I find it sad, I would much rather deliver mail than parcels.
Parcels received £4.3 billion in revenue while letters received £3 billion in the latest annual report 2025/26, so they account for over 40% of the revenue.
RM isn't just another parcel courier and still has a legal obligation to maintain the nationwide network. The fact that RM still generate billions in revenue from letters isn't something that they will want to lose. That is why finding a business model where parcels support the network without sacrificing the very things that made RM different i.e. trusted brand, nationwide coverage and its reliability very difficult.
Becoming another low-cost courier is unlikely to solve that problem.
When letters were at the peak in 2004 at circa 20 billion stamps where 30p and 21p
Fast forward to today it’s 5/6 billion but costs are £1.80 and 91p
Plus DSA wasn’t a thing if I remember
So at no time have RM made less revenue than 22 years ok so letters must still be very valuable part
[/quote]
When letters were at the peak in 2004 at circa 20 billion stamps where 30p and 21p
Fast forward to today it’s 5/6 billion but costs are £1.80 and 91p
Plus DSA wasn’t a thing if I remember
So at no time have RM made less revenue than 22 years ok so letters must still be very valuable part
[/quote]
The revenue from letters is less than half from the peak of 2004 despite them costing more. So this argument is redundant and bad economics.
Look at the graph, where do you expect letters to be in 5 years time?
I think people start needing to be realistic about where letters are are going to end up.
No one disputes that letter volumes have fallen dramatically but your graph only tells half the story. What it doesn't show is revenue, profit or even the value of the letters that remain.
Letter revenue in 2017/18 was £4.152 billion. In 2012/22 it was 3.71 billion. And the last financial accounts 2025/25 £3 billion
In 5 years time? Well, suppose we only deliver 4 billion letters but the average revenue per letter rises again, like we have recently seen - the revenue might not halve. That graph is a bit like judging a supermarket by the number of customers walking though the door without looking at how much they are spending.
Don't you think that if letter volumes have fallen by 70% yet RM still generates roughly £3 billion a year not suggest that it may become a smaller but a higher value part of the business in the future? Those 1c letters might even be treated like Specials....
On the face of it, shareholder value is the dumbest idea in the world.