Royal Mail narrowly misses First Class performance targets
Royal Mail has reported that it “narrowly missed” its target for First Class mail in the fourth quarter (Q4), having delivered 92.8% by the next working day, against a target of 93%. The postal operator also narrowly missed its First Class mail target for the 2015-2016 financial year as a whole, delivering 92.5% the next working day, against a target of 93%.
Royal Mail did better on the Second Class front. For both Q4 and the year as a while, it delivering 98.8% of this mail within three working days, against a target of 98.5%.
In a statement issued on Friday, Royal Mail said that the full year outcome was “impacted by events outside its control”.
“For example, Christmas activity by consumers and companies now includes Cyber Week; it has become a significant part of the festive retail calendar,” said Royal Mail. “Christmas itself has always been exempt from Quality of Service regulation because of the exceptionally high mail volumes. Cyber Week, by contrast, can fall within, or outside the exemption period. In 2015-16, all of Cyber Week – from Friday 27 November to Friday 4 December 2015 – fell outside the exemption period. In addition, significant disruption in parts of the country due to poor weather and road closures impacted delivery performance during the period.”
Royal Mail argued that if the 2015-16 performance were adjusted for these two factors, 0.31% would be added to the 92.5% reported performance. And allowing for statistical variance the figure would be adjusted by a further +/-0.1% – which pushes the performance closer to the 93% target. Royal Mail will ask the regulator Ofcom to take these issues into consideration and it will also be asking Ofcom to include Cyber Week in the exemption period, regardless of when it falls.
Furthermore, Royal Mail also highlighted the issue of performance at the postcode level: “For 2015-16, at an individual postcode level, 104 of 118 postcode areas met or exceeded their targets over the year. Royal Mail will ask Ofcom to take the impact of Cyber Week and disruption in parts of the country due to poor weather and road closures into account for impacted postcode areas. Allowing for statistical variance, each postcode area performance would be adjusted by a further +/-0.5%. The Company believes that if the 2015-16 performance was adjusted for these three factors, an additional 13 post codes would meet or exceed their targets.”
Commenting on the performance results, Sue Whalley, Royal Mail’s Chief Operations Officer, said: “Royal Mail has one of the highest Quality of Service specifications of any major European country. We are disappointed that we narrowly missed our First Class target for 2015-16. We are undergoing a major transformation of our business and the market in which we operate is changing rapidly, with more parcels and fewer letters in our network. As we continue to work to increase efficiency, we also remain committed to improving and maintaining our high standards of service to all our customers across the UK.”
