Royal Mail: Universal Service under threat

One of the promises made by the Government at the privatisation of Royal Mail late last year for a knock down price was that the universal service and six days a week delivery would be safe-guarded.

And only a year later, it seems that both are under threat. Royal Mail posted some poor results and diminished profits yesterday and that has not only hit the share price but also seen Royal Mail raise the question (albeit obliquely) that they would like to be released from these requirements or see them also applied to competitors such as Whistl.

Here’s the comment from Royal Mail that has caused alarm:

“We believe the current regulatory framework does not fully address the problem posed by unfettered direct delivery competition. We think there is an urgent need for a new framework that will secure the sustainable provision of the Universal Service for the future.”

Of course, sceptics said at the time that there was a very real risk to the universal service that ensures delivery of post to all parts of the UK for the same rates. But it was a quid pro quo for the commercial freedom that Royal Mail claimed it could only enjoy if privatised. Now it seems that they want the goal posts moved.

Any such end to the universal service would be a real blow to ecommerce and a real problem for those who live in remote and rural areas who really depend on the Royal Mail.