An obligation that Royal Mail delivers letters six days per week risks becoming "unsustainable", a UK regulator said today as it proposed less frequent service.
Communications watchdog Ofcom proposed that the former state-monopoly cut delivery to five days, or even three days per week, potentially saving the company hundreds of millions of pounds.
Its conclusions followed a report last year by British MPs that showed Royal Mail had "systemically failed" to meet its delivery requirement, as it prioritises parcels in the age of the internet.
Ofcom said today "the universal postal service risks becoming unsustainable as people send fewer letters and receive more parcels, meaning reform is necessary to secure long-term future" of the postal operator set up more than 500 years ago.
The regulator proposed "reducing the number of letter delivery days in the service from six to five or three", adding that this "would require government and parliament to change primary legislation".
Ofcom estimated that Royal Mail could save up to £200m if deliveries of letters were reduced to five days - and as much as £650m for a reduction to three days.
The watchdog noted that other European countries had reduced the frequency of delivery or extended delivery times for letters - including Sweden in 2018, Belgium twice since 2020, and Norway and Denmark twice each since 2016.
"We are doing everything in our power to transform, but it is not sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion," chief executive Martin Seidenberg said in a statement.
Ofcom will consult on its proposals, which include also suggestions on prices paid to send letters, before providing an update in the summer.
"Postal workers are part of the fabric of our society and are critical to communities up and down the country," Ofcom chief executive Melanie Dawes said today.
"But we're sending half as many letters as we did in 2011, and receiving many more parcels. The universal service hasn't changed since then, it's getting out of date and will become unsustainable if we don't take action," she added.
Royal Mail's universal service obligation (USO) stipulates that it must deliver letters six days a week to all 32 million addresses in the UK for the price of a stamp.
A first class stamp costs £1.25 and should guarantee next-day UK delivery for a letter, although the target is not always met.
A second class stamp, costing 75 pence, means a letter should arrive within three days.
Royal Mail was privatised in 2013, ending nearly five centuries of state ownership.
Owned by the holding company International Distributions Services, Royal Mail is battling a sharp decline in letters as email has increased and services such as banking have gone online.
Parcel volumes have increased but the company is under financial pressure. It made an adjusted loss of £419m in its 2022-23 financial year.
The Communication Workers Union (CWU) said Ofcom had no credibility in the ongoing debate about the postal service.
"The response to the leaked information over the week showed that CWU members, the public and politicians are united against the deliberate, manufactured destruction of the postal service," General Secretary Dave Ward said.
