Royal Mail Quality of Service target missed for 7th consecutive quarter

[TrueBlueTerrier]

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For the 7th quarter in a row Royal Mail Quality of Service targets set for the Universal Service Obligation have been missed. Royal Mail failed to deliver the prescribed 93% of 1st Class letters and parcels on time, i.e. the next working day.

Royal Mail Quality of Service 4th Quarter 2018-19
For the last quarter, Royal Mail only delivered 92% of 1st Class mail the next working day and 91.5% for the full year.

Royal Mail did manage to deliver enough 2nd Class mail on time to meet the regulatory target with 98.9% delivered within three working days for the quarter and 98.6% for the full year.

Why isn’t the Royal Mail Quality of Service target being met?
There is something strange going on at Royal Mail, it’s almost as if they’ve given up and abandoned any attempt to deliver the post covered by the Universal service on time. Missing the Royal Mail Quality of Service for the odd quarter is one thing, but now they haven’t delivered the post on time for almost two years. One might ask what the regulator is doing about this and indeed why Royal Mail CEO Rico Back who took control in June 2018 hasn’t managed to turn things around in a year.

Royal Mail are under an obligation to deliver the Universal Service but their entire focus appears to be on parcels. Even here they are making life difficult for their customers having recently given NetDespatch clients just a month’s notice to move onto a new platform. Users, who needed no tech expertise as NetDespatch did all the integration work for them, are being forced to implement new software solutions, which one might normally view as a three to six month project, in under a month.

One might look at Royal Mail’s performance over the past two years and conclude that they have washed their hands of 1st Class Mail and would happily split the company keeping the parcels business and letting the regulator award the job of delivering the Universal Service Obligation to a different company or take it back into government ownership.

“We were disappointed to miss our target. Every item of mail is important to us. We are proud to deliver the Universal Service and we take our Quality of Service obligations very seriously.”
– Royal Mail Spokesperson

Any other business that failed to deliver their basic service for almost two years would have customers leaving in droves, but there is no realistic alternative to Royal Mail – even third party postal services rely on Royal Mail for final mile deliveries.

What did Royal Mail say?
“We are disappointed that we missed our annual regulatory First Class target. Our postmen and women work extremely hard to deliver the mail six days a week in all weather. We are committed to delivering high standards of service to all our customers across the UK.”
– Paul O’Keefe, director of quality and customer, Royal Mail

What are OFCOM doing?
OFCOM have brought forward a review of Royal Mail services from 2022 to this year.


Sustaining the universal postal service
3.26 Many people and businesses rely on the universal postal service. We have a duty to secure the universal postal service, and monitor on Royal Mail’s performance and finances.

3.27 In light of the continuing decline in the letters market and broader changes in the parcels’ market and customers’ expectations, we propose to enhance our monitoring of Royal Mail.

Annual Plan 2019/2012
We will bring forward some of the work we had planned to undertake as part of our next review of the regulation of Royal Mail which, as we set out in spring 2017, we intended to undertake by 2022.

3.28 In the next financial year, in addition to our current work programme, we will:

• Carry out a review of Royal Mail’s efficiency.
This work will give us more insights into the likely future sustainability of the universal postal service. We intend to provide our latest view on the sustainability of the universal postal service in Q3.

• Seek to understand the needs of postal users better.
We will carry out research to review the extent to which the postal market is meeting the reasonable needs of users in light of changes in the market, in particular the growth in online shopping and continued decline in letters. We will assess implications arising from changes in postal user needs. We plan to publish preliminary findings in Q4.

[noggin1969]

"One might look at Royal Mail’s performance over the past two years and conclude that they have washed their hands of 1st Class Mail and would happily split the company keeping the parcels business and letting the regulator award the job of delivering the Universal Service Obligation to a different company or take it back into government ownership".

[rambo1]

Staff shortages may be to blame? Heavy reliance on lapsing duties? Bye bye to the USO ( and many jobs) , are other delivery companies scrutinized this much, I doubt it very much.

[postareale]

The real problem here is right at the top of the house. It's very obvious that new CEO Rico Back is struggling big time. Financial performance has steadily declined since the departure of highly-competent former CFO Matthew Lester. Operational targets have been consistently missed, and industrial relations have soured since the departure of highly-ethical and collaborative former COO Sue Whalley. Highly-rated Royal Mail general counsel Maaike de Bie resigned to become legal chief at FTSE 100 airline easyJet. Stewart Simpson has been doing extra duty as both CFO and COO since Ms. Whalley was unceremoniously sacked way back in November 2018. What £10 billion company with a circa 150,000 person workforce would have a solo senior executive doubling down on the critical CFO and COO roles for seven months now and counting.

Executive talent has been jumping ship, and potential new executive recruits are steering completely clear of the evident train wreck. Under former CEO Moya Greene, the composition of her Chief Executive Council (CEC) was always posted on the company's website. The page was pulled from the company website at the time of CEO succession in 2018 and investors don't even know who is really running the show anymore.

Management/union relations have now hit rock bottom. This is quite evident by CWU's very recent issuance of Emergency Motion E2. Notably, "should RMG attempt to introduce any of their potential proposals by Executive Action, the PEC is instructed to activate an immediate ballot of CWU members for strike action".

And, of course, the share price continues to nosedive (currently @ 238p). Look for big changes in the executive suite once Deputy Chair Keith Williams takes over from interim caretaker Chair Les Owen after the conclusion of the company's AGM on 23 May 2019. Significant institutional shareholders will demand regime change and will not accept the status quo. Stay tuned.

[k979aaa]

God everybody thought the conservatives were in the s#it but rico back is siting in the wings with mouse in hand with a killing in mind buy at £2.00 sell at £5.00 capitalists don't you just love them.

[rambo1]

God everybody thought the conservatives were in the s#it but rico back is siting in the wings with mouse in hand with a killing in mind buy at £2.00 sell at £5.00 capitalists don't you just love them.

Very much doubt£5 will be seen again. If you think so, put your own money where your mouth is and make 150% .