UK Royal Mail misses service targets
The Royal Mail has failed to hit any of its 15 performance targets, but says the service is improving.
For the three months to June, just 88.3percent of first class letters were delivered the next day, against a target of 92.5percent.
Royal Mail blamed service changes introduced earlier this year for the poor service and said the situation had since improved.
In August, about 92percent of first class post was delivered on time.
Bad news
Deliveries over the period were the poorest for three years, postal watchdog Postwatch said.
More than 1.7 million first class letters were not delivered on time between April and June, Postwatch said, adding that Royal Mail had only exceeded its targets in six of the country’s 121 postcode areas.
“For the last three years customers have been paying higher prices for a declining service. This is a bad consumer equation,” said Postwatch chairman Peter Carr.
The service figures gain greater significance when placed against the backdrop of impending liberalisation in 2007.
From this date the Royal Mail will face competition for domestic delivery, and poor service could mean lower profits if customers decide to go elsewhere.
Targets ‘in sight’
Royal Mail chief executive Adam Crozier said there was real evidence the service is getting better.
“Clearly there were some problems in the spring but the service has improved, month-on-month, since May and we are now approaching our target level for first class mail.” he said.
Mr Crozier took control of the letters business in May, when just 87.2percent of first class post was delivered on time.
He added that the Royal Mail hoped to hit all of its targets within the coming months.
The Royal Mail hit four of its 15 targets in August, preliminary figures show. About 98.5percent of second class post is now being delivered on time, compared with 98.3percent in April.
The company has also introduced 95percent of the operational changes it wants to and is on track for greater profitability, Mr Crozier said.
“Royal Mail is now operating profitably after launching its renewal plan two-and-a-half years ago when the company was losing more than GBP1m every working day,” he said.
However, Postwatch chairman Peter Carr added that the figures would pose “serious problems” for industry regulator Postcomm, which has yet to decide whether to penalise the Royal Mail for failing to meet last year’s targets.
Royal Mail is already paying business and individual customers a record GBP50m in compensation for late delivery of post during last year’s industrial action.
‘A way to go’
BBC business editor Jeff Randall told Radio 4’s Today programme that the service is improving, but warned more could still be done.
He added that Mr Crozier has until the end of the year to show that his leadership is working – otherwise he could face the axe.
The Communications Workers Union (CWU) agreed that the figures made “grim reading” but welcomed recent improvements.
“The challenge is to sustain real improvements between now and Christmas,” deputy general secretary Dave Ward said.
He warned that service could suffer if the focus was on “quick fix” initiatives to improve profits.
