UK Royal Mail late delivery payout could save sector GBP36M per year

Royal Mail’s plans to compensate brand owners for late deliveries could see direct marketers recoup more than GBP36m a year if it fails to meet national targets.

The proposal may be given the green light at a board meeting next month. It would enable bulk mailers to claim 1 per cent off their Royal Mail bills for every 1 per cent the postal operator fails to meet national delivery targets – up to a maximum of 5 per cent.

If the scheme had been in place this year, it would have cost Royal Mail GBP36m, according to Postcomm figures.

But not everyone is confident that, even if approved, the scheme will work. One agency production director says: “It would be quite easy for Royal Mail to put a spanner in the works, because these targets are based on the overall performance for a whole year – not on individual cases.

“The company could easily lay the blame for late deliveries squarely at mailing houses, and it could be hard to prove otherwise.”