Royal Mail reveals it wants to change rule that forces it to deliver UK-wide for one price six days a week

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Royal Mail reveals it wants to change rule that forces it to deliver UK-wide for one price six days a week

Post by TrueBlueTerrier » ... al-4723635

Royal Mail says it wants to change the universal service obligation that requires it to deliver nationwide six days a week for one price.

The firm made the announcement after posting losses of £180m in the spring and summer of this year.

The operator said the losses showed that the universal service obligation had to end in its existing form, the Times reports.

Royal Mail agreed to the requirement when it was privatised in 2013.

Keith Williams, executive chairman, said: “Whilst we have done exceptionally well in terms of revenue and have seen real growth for the first time since privatisation, as anticipated the reduction in letter volumes has had a significant impact and demonstrates the need for change in the universal service.”

The firm boasts that it is "the only company that has the capability to deliver a ‘one-price-goes-anywhere’, six-days-a-week service on a range of letters and parcels to more than 30 million addresses across the UK."

The policy is at the core of what the business stands for - but means a person in the far reaches of Scotland pays the same price as someone in the middle of London, even if the letter is sent from London.

While that is a laudable model, Royal Mail believes it needs to change so that the firm can help balance the books.

The losses for the six months to the end of September came after Royal Mail reported a sharp 33 per cent fall in letter volumes - far worse than recent performances.

In contrast, Royal Mail has seen a 31 per cent rise in parcel volumes over the same period.

The company is in the middle of a programme cutting its 150,000 workforce, and redundancy payments cost the firm £147 million.

It now deals with more parcels than letters for the first time in its history.

The firm is still hoping to break even by the end of March.

Including its international courier division GLS, Royal Mail posted pre-tax profits of £37 million.

GLS, which delivers around Europe and the United States, nearly doubled profits to £166 million as revenues rose by more than a fifth.

The group said online shopping growth would see UK revenues rise by between £380 million and £580 million over the full year.
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