Business leaders warn cut in delivery days would cause 'monumental damage' to companies and 'real disruption' to economy
Royal Mail could “kill off” small businesses if it moves to a three-day-a-week delivery model, postal workers and business owners have warned.
The cut in delivery days was put forward by regulator Ofcom last month, in a report which found the postal service was “getting out of date” and needed reform to avoid becoming “unsustainable”.
But business leaders and owners told i such a move would cause “monumental damage” to small businesses and “real disruption” to the economy.
Postal workers have also highlighted the three-day-a-week model will hit the local communities they serve, and they fear it will lead to job losses.
Alyssa Smith, founder of House of Alyssa Smith jewellery firm based in Hertfordshire, told i the proposed move would “kill off” many small businesses.
She said: “The damage to businesses is going to be absolutely monumental. It’s going to force so many businesses to close down. What are my staff going to do on the days there are no deliveries? It will kill off small businesses.”
She said her business, which is primarily online, is reliant on Royal Mail because they cannot afford to pay courier prices which would “triple their overheads”.
Trying to pass on that cost to the customer would mean she would lose business, she explained. Losing a daily delivery service would also make peak trading times even more difficult for businesses reliant on the post, Ms Smith added.
“A three-day-a-week delivery plus potential strikes, combined with Black Friday and Christmas and last posting dates for Christmas too, means the service is going to be so much worse than normal”, she told i.
Alyssa Smith says he business is reliant on Royal Mail because it cannot afford to pay courier prices (Photo: Daniel Jones/Alyssa Smith)
“What Royal Mail need to do is listen to the people who use their service and tailor their service to suit their customer, like other businesses do” she said. “I really think Royal Mail will go bust if they don’t.”
One Royal Mail employee based in north-east England echoed Ms Smith’s view. The worker, who wished to remain anonymous, told i: “I would imagine it would be manic – we can’t cope now. I can’t see it working. It’s going to target smaller businesses. People want everything the next day.”
He said it would make it especially difficult for small traders on websites like Etsy, who have to compete with Amazon in terms of delivery times.
The changes would also make already difficult working conditions worse for staff, he added.
“I can’t remember the last time we cleared the office”, he said. “Every day there’s something left over. We still have to prioritise track [parcels] over letters, even though [Royal Mail] say they don’t do that any more. There are days when you can’t get everything done.”
The postal worker said his sorting office had been understaffed for a long time and everyone felt “really, really demoralised” and feared the change would ultimately lead to job losses. “I can’t see how it [three-day-a-week week delivery] won’t lead to job losses”, he added.
A fellow worker in the Edinburgh area, who also wanted to remain anonymous, said: “Not a single Royal Mail worker out there would tell you it is fine the way it is, we all see letter numbers are declining.
“But if you reduce USO (Universal Service Obligation) down to three-days-a-week service, you can kiss goodbye to all that is great about Royal Mail.”
Both sources agreed that being a postal worker put them at the heart of their local area, and had an impact beyond deliveringthe post. “We are more than just a postal service”, one said. “We are part of the community. For some people, we are the only person they may see all day. That’s one of the things I like about the job.”
‘Cutting deliveries will damage economy’
The Federation of Small Businesses (FSB) warned that scaling back Royal Mail deliveries could cause “real disruption” to the economy by damaging small businesses which rely on next-day and Saturday delivery services.
Tina McKenzie, FSB policy chair said: “Trading essential services for short-term savings is a slippery slope that may compromise the trust small businesses place in Royal Mail.
“Considering that 25 per cent of them rely on the postal service, these proposals could cause real disruption to our economy. They will not just impact the householder waiting for birthday cards or hospital appointments.
“Many have built their business operations around the postal service, from the cake seller who needs to send a last-minute topper to letterbox flower companies which rely on next-day deliveries.
“These sellers are in a routine and knowing they can deliver things quickly allows them to build a positive relationship with their customer.
One postal worker told i they ‘can’t remember the last time we cleared the office’
“It will also affect the customer who prefers to schedule deliveries on a Saturday when they will be home to sign for it.
“This will also affect those dependent on supplies through the post. If a self-employed carpet fitter doesn’t get their materials on time, they can’t fulfil their order. Similarly, a jeweller who doesn’t receive metals regularly will struggle to meet their targets.”
Ms McKenzie said some couriers charge up to 200 per cent more than Royal Mail to send the same item, and many small firms cannot afford to swallow that extra cost.
Office-based firms would also be at risk, as business rates reminders are rarely sent electronically.
She also said companies in rural areas – where 32 per cent report issues of reliability with their broadband – lean on the postal service more than their urban counterparts, and letters arriving late could have unfair consequences.
“Trimming things back is not the way to make improvements,” Ms McKenzie added. “It’s understandable that the overall number of mail volumes has fallen in recent years, but the number of small businesses relying on it has not.
“The answer, therefore, lies in modernising a service designed in the 70s to fit the needs and expectations of today’s culture in a sensible way, that doesn’t leave small firms feeling short-changed.”
The BBC is exploring the future of Royal Mail in a new Panorama programme being broadcast on tonight, Royal Mail: Where’s My Post?.
During the investigation, whistleblowers and senior management at the firm reveal they believe the postal system must change if it is to survive.
Royal Mail delivered 20 billion letters per year in 2004/5, but this declined to seven billion in 2022/23 and is expected to be closer to four billion in the next five years.
In November last year, Royal Mail was fined £5.6m by Ofcom for a “significant” failure to meet its postal delivery targets in the 2022-2023 financial year.
i reported in December that Royal Mail has not been fulfilling the Universal Service Obligation (USO) of the Postal Services Act 2011, with intermittent letter deliveries and delays.
Ofcom chief executive Dame Melanie Dawes said last month that changes to the postal system could be required, as the number of letters being sent each year had halved since 2011.
David Beirne, manager of postal relationships at mailing firm Quadient, said: “As the Government recently stated, a six-day postal service is vital for many businesses.
“Halving the number of Royal Mail delivery days would have a serious impact, as many organisations still rely on letters as their main communication method.
“Imagine how many more NHS appointments will be missed, and the number of home purchases that will fall through.
“All of this will have a costly knock-on impact, both for organisations and the general public.”
Royal Mail said the recommendations to move to a three or five-day-a-week delivery service had come from Ofcom, and they would be feeding back on their proposals along with other stakeholders in the coming months.
Martin Seidenberg, group chief executive officer, said: “Ofcom’s report demonstrates that reform is urgently needed to protect the future of the one-price-goes-anywhere Universal Service.
“We are doing everything in our power to transform, but it is not sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.
“We have been calling on Government and Ofcom to tackle this issue for four years, and the lack of action means that we are now facing a much more serious situation.
“A modern and sustainable postal service is crucial for our people, our company and the customers we serve. We want to engage with all stakeholders as part of the process to find an outcome that will allow us to compete and adapt to today’s realities.”
