Hi Creators, we wanted to let you know the latest on what’s happening in the Ofcom/Royal Mail debate.
Today (03.04.24) is the deadline for responses to Ofcom’s consultation document about the future services the Royal Mail are obliged to provide. We got our submission in nice and early – as did the GCA, so greeting cards are well represented and we thank the GCA for all of the lobbying and PR they’re supporting us all in the industry with.
Today, the Royal Mail also released their view of what needs to happen. We’ve summarised this below with our perspective as it stands today. One thing’s for sure, we’re not Royal Mail experts and we don’t fully know how that machine works, so we’re learning as we go. When we get more information or new understanding, we’ll share with you as I’m sure, like us, you’re worried about the future of an effective monopoly that we rely so heavily upon.
So, what have the Royal Mail suggested that affects Greeting Cards in a nutshell?
No change to First Class delivery days or speed
This is a relief, we’re sure you’ll agree for our industry and the NHS, BUT there is no mention of price surety – in fact, the fuller document RM have produced indicates that further price increases will be necessary. To what magnitude, we don’t know yet but as soon as we get a more concrete idea, we’ll let you know.
All none First Class, including Second Class and Bulk Business (things like bills & bank statements), will drop to every other weekday delivery.
Effectively this adds a day to the delivery window here. Whilst it doesn’t affect thortful, if you use Second Class, this would require you to think about when you send your deliveries and letting your customers know if changes are coming.
New, additional reliability targets to be added with revised realistic speed targets
It’s not especially clear what they mean here. Our cynical brains wonder whether it allows the Royal Mail to have more tolerance on hitting quality of service targets and does this help or hinder consumer confidence. But we’d best reserve cynicism until we’ve had a fuller explanation!
The changes above wouldn’t need Parliament or new laws – just Ofcom approval. The GCA, Citizen’s Advice and the CWU will all have perspective on the above and we’ll attempt to synthesize that for you as we go.
Other proposed changes Royal Mail are suggesting that would require new laws are:
– Regular net cost calculations led by Ofcom – no objections our side here. We need to know more accurately what the cost implication is of the USO so we can collectively figure out how to retain the best possible service.
– Greater flexibility given to Ofcom to change USO without requiring new laws – this makes us nervous. It avoids legislative scrutiny that we think is really important consumer protection. We’d be reluctant to go here.
– Government subsidy – this is tough to swallow. The RM has paid out £2 billion in dividends since privatisation. We struggle to process this when other private businesses manage decline of a product through business transformation; innovation and diversification. Don’t get us started on how much money has been made by a wealthy few from privatising the Royal Mail!
Hopefully a useful synopsis as we know it’s complex with lots of competing information. We’ll share more as we learn. At this stage, these are just proposals from the Royal Mail. From here, Ofcom takes all proposals into account and figures out what to do next. Timeline wise they have said ‘over the summer’, but the Royal Mail are applying pressure to make the non-legislative changes above sooner. So we’ll see – and keep you as up to date as we can.
If you have any questions or concerns with this, please email [email protected].
Team thortful
