Royal Mail fined £10.5m for missing delivery targets
By Josh White
Date: Friday 13 Dec 2024
(Sharecast News) - Royal Mail has been fined £10.5m by the communications regulator Ofcom for failing to meet delivery targets for first and second-class mail in the 2023-2024 financial year.
The penalty was nearly double last year's fine of £5.6m for failing to meet obligations under the Universal Service Obligation.
Under Ofcom's standards, International Distribution Services subsidiary Royal Mail is required to deliver 93% of first-class mail within one working day and 98.5% of second-class mail within three working days.
However, the company achieved only 74.7% and 92.7% respectively over the period.
Ofcom criticised Royal Mail for taking "insufficient and ineffective steps" to address its poor performance, with millions of customers impacted by late deliveries of vital correspondence, including medical and legal documents.
Royal Mail attributed its underperformance to financial challenges and delays associated with industrial action last year.
However, Ofcom rejected the explanations as inadequate, saying it was the company's responsibility to manage its financial and operational difficulties while maintaining service standards.
It emphasised the need for "clear, credible, and sustainable improvements", noting that progress in the last year had been marginal at best.
The fine came as IDS faced a likely takeover by Czech billionaire Daniel Křetínský's EP Group, a deal currently under government review for national security implications.
At 0839 GMT, shares in International Distribution Services were up 0.13% at 358.45p.
Reporting by Josh White for Sharecast.com.
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