UK PM Sunak defends Royal Mail delivery obligation

LONDON: British Prime Minister Rishi Sunak on Wednesday pledged to maintain Royal Mail´s obligation to deliver letters six days a week, despite calls for less frequent service to slash costs.

Communications regulator Ofcom earlier on Wednesday 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 Monday-Saturday delivery requirement, as it prioritises parcels in the age of the internet.

“I agree about the importance of the Royal Mail´s universal service obligation, and... we remain absolutely committed to ensuring that it remains as it is,” Sunak told MPs when asked about Ofcom´s proposals.

The regulator said “the universal postal service risks becoming unsustainable as people send fewer letters and receive more parcels, meaning reform is necessary to secure... (the) long-term future” of the postal operator set up more than 500 years ago. Ofcom 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”.

It estimated that Royal Mail could save up to £200 million ($255 million) if deliveries of letters were reduced to five days -- and as much as £650 million for a reduction to three days.

Royal Mail parent, International Distributions Services, has long called for a shakeup of the universal service obligation (USO). “The lack of action means that we are now facing a much more serious situation,” IDS chief executive Martin Seidenberg said on Wednesday.