The postal regulator Ofcom has initiated a fresh investigation into Royal Mail after the company once again failed to meet its annual delivery targets, with almost a quarter of first-class letters arriving late.
Royal Mail, which has been fined £37 million since 2023 for consistently missing the delivery benchmarks set by Ofcom, disclosed on Friday that 24.3% of first-class mail was not delivered on time during the year ending in March. This marks a deterioration from the previous year, when 23.5% of first-class mail missed the one-working-day target.
Performance Worsens Across Services
Under Ofcom's rules, 93% of first-class mail must be delivered within one working day of collection, excluding the Christmas period. The latest figures show Royal Mail is falling short of this requirement. For second-class mail, the company delivered 90.2% within the three-working-day limit, well below Ofcom's target of 98.5%.
In October, Ofcom imposed a £21 million fine on Royal Mail for missing annual delivery targets, marking the third-largest financial penalty the regulator has ever issued to any company.
Investigation Focuses on Parcel Prioritisation
Ofcom stated on Monday that its investigation will examine whether Royal Mail has been prioritising parcel deliveries over letters, a practice that whistleblowers and unions have alleged but the company denies. "In deciding whether Royal Mail breached its regulatory obligations, we will consider all relevant factors," Ofcom said. "This will include the question of parcel prioritisation, as well as identifying whether there were any exceptional events beyond the company's control that may have affected its performance. Where we determine a breach of Royal Mail's obligations during our investigation, we will consider whether to impose a financial penalty."
Royal Mail has not met its Ofcom-mandated delivery target for first-class post since 2017, nor for second-class mail since 2020.
Financial and Operational Challenges
Last year, Czech billionaire Daniel Křetínský completed a protracted £3.6 billion acquisition of Royal Mail's parent company, International Distribution Services (IDS), after the takeover received approval from a UK government national security review.
In April, Royal Mail faced widespread criticism after raising the price of a first-class stamp by 10 pence (6%) to £1.80. The cost of a first-class stamp has more than doubled since 2020. The price of a second-class stamp rose by 4 pence (5%) to 91 pence. Royal Mail attributed the need for price increases to the "continued rise in the cost of delivery for every letter."
In July of the previous year, Ofcom granted IDS permission to relax Royal Mail's universal service obligation (USO), ending second-class deliveries on Saturdays and reducing the service to alternating weekdays from Monday to Friday.
Declining Letter Volumes
A decade ago, Royal Mail was delivering 20 billion letters annually, but that figure has fallen to 6.7 billion and could drop to 4 billion within four years. Over the same period, the number of addresses it serves has increased by 4 million.
A Royal Mail spokesperson said the company would "engage fully with Ofcom" and that improving service quality was "a top priority." They added that Royal Mail is delivering a significant programme of change, backed by £500 million in investment over five years. "These reforms are designed to deliver long-term quality improvements for customers as we modernise the postal service and deploy the new delivery model, enabled by the changes to the universal service regulations that Ofcom introduced in July 2025," the spokesperson said.
