Pandemic no longer excuse for missing delivery targets, Ofcom warns Royal Mail

2 Dec 2022 11:27 AM

​Ofcom has warned Royal Mail that it cannot continue to rely on the impact of Covid-19 as an excuse for poor delivery performance, after the company missed several regulatory targets last year due to the pandemic.

Ofcom concludes investigation into Royal Mail’s 2021-22 delivery performance

The warning comes as the regulator concluded its investigation into Royal Mail’s delivery performance between April 2021 and March 2022. The company failed to meet several of its annual delivery targets, including:

• 82% of First Class mail delivered within one working day of collection, below the target of 93%;
• 95.6% of Second Class mail delivered within three working days of collection, against the target of 98.5%; and
• completing 94.29% of delivery routes on each day that a delivery is required, against the target of 99.9%.

Assessment of exceptional events

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:

• increased and unpredictable staff absences, for example – between November 2021 and January 2022 during the peak of the Omicron variant;
• unusually high parcel volumes and larger parcel sizes, resulting in longer rounds for frontline staff, more frequent replenishments of trolleys, and a need to use more vans to increase overall capacity; and
• continued challenges presented by social distancing measures.

Our decision

In our view, had it not been for the impacts 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, we decided it was not appropriate to find Royal Mail in breach of its regulatory obligations for 2021-22.

But we do not expect Covid-19 to have a continuing, significant impact on the company’s service levels. Social distancing measures are no longer in place, absence levels are likely to be much less unpredictable, and parcel volumes have largely returned to pre-pandemic trends.

We are concerned by the fact that Royal Mail’s performance in the early part of 2022-23 fell well short of where it should be. We believe the company has had plenty of time to learn lessons from the pandemic, and we are unlikely to consider the factors outlined above as exceptional and beyond its control in future.

The company has committed to restoring quality of service as quickly as possible, and we will be keeping a close eye on its performance over the remainder of 2022-23.

Lindsey Fussell, Ofcom's Group Director for Networks and Communications said:

Looking back at last year, Covid-19 was clearly still having a significant impact on Royal Mail’s operations. However, the company’s had plenty of time to learn lessons from the pandemic, and cannot continue to use it as an excuse.

We’re concerned by Royal Mail’s performance so far this year, which is falling well short of where it should be. It must do everything it can to bring service levels back up, and we’ll be keeping a close eye on it throughout the year.

Notes to Editors

• Ofcom has also published its latest annual monitoring update on the postal market. It reveals that, after growing substantially during the pandemic, total parcel delivery volumes across all UK postal operators have fallen back since Covid-19 restrictions eased, the high street reopened, and online shopping reduced. In contrast, letter volumes – which saw a dramatic fall on the prior year – increased as businesses resumed their normal business and marketing mail activity. Our consumer research for July 2021 – June 2022 found that, similar to previous years, more than eight in ten customers were satisfied with both Royal Mail services and postal services overall. It also shows some improvements with complaint handling, with satisfaction levels increasing among those who made a complaint to Royal Mail in the past 12 months.