Royal Mail cutbacks cause service quality "teething problems"

Royal Mail said the scale of the modernisation of its service network have caused “teething problems” as it reported narrowly missing key service quality targets. Reporting back to UK regulator Postcomm today, regarding the three months up to early June, the postal service insisted the “overwhelming majority” of all mail was delivered on or above target.

Royal Mail, which is set to be privatised next year, said it is currently going through one of the biggest transformation programmes in UK industry.

Consolidation of mail centres, the introduction of new technology and changes to the delivery process for 100,000 mail carriers have been undertaken to improve efficiency and cut costs.

Along with several days of disruption to next-day air services caused by the Icelandic volcanic ash cloud in May, Royal Mail conceded that its modernisation programme had caused problems, with services including both retail and bulk First and Second Class, Bulk Third Class and Special Delivery (Next Day) below the average quality levels that are set by its licence for a full year.

Royal Mail was well above standards for its Standard Parcels and European International Delivery services, and did hit its overall target for items correctly delivered.

But it narrowly missed its universal service obligation goals in terms of percentage of collection points served each day and the percentage of delivery routes completed each day.

For the three months from early March to early June, 91.4% of First Class stamped and franked mail was delivered the next working day, against a target of 93%. Second class deliveries were on time 98.4% of the time, just 0.1% below target.

The company paid out almost £2m in compensation during the quarter for undelivered or damaged items.

Royal Mail said its service quality did noticeably improve in the final five weeks of the period, its first quarter for 2011/12.

“Encouraging”

Commenting on the statistics, which were produced by independent research, Royal Mail pointed out that its service standards are among the highest in Europe.

Mark Higson, Royal Mail’s managing director of modernisation and operations, said: “The most recent above-target results are encouraging and reflect the determination or our postmen and women to deliver the best possible service.”

Royal Mail is modernising its network to respond to declining mail volumes while maintaining its “one-price-goes-anywhere” universal service for the UK’s 29m homes and businesses.

The company said it was a key challenge to keep up a high level of service quality during the biggest operational changes in living memory.

Higson said: “We constantly review the way we modernise to minimise any impact on customers. The scale of the changes sometimes leads to some teething problems which can have a temporary impact on quality of service. We apologise to any customers for any service which falls below our targets, which are among the highest standards in Europe. Customers can be assured we are doing everything possible to deliver the best possible service at all times.”