Royal Mail hailed its ‘best Christmas’ in four years as the postal group sought to make amends for the chaos that befell its operations in 2022.
The 507-year-old delivery firm said more than 99 per cent of first and second-class items sent by the last recommended postal dates were delivered in time for Christmas.
That was a stark improvement on the previous year when strike action from the Communication Workers Union left parcels and cards piled up in sorting offices across the UK.
But Royal Mail continues to weigh on parent company International Distributions Services (IDS), and analysts believe that it is on course for an annual loss of over £300million – all but wiping out profits from its overseas arm GLS.
The boss of IDS yesterday urged industry regulator Ofcom to take ‘urgent action’ over its legal duty to deliver letters six days a week.
Royal Mail said more than 99% of first and second-class items sent by the last recommended postal dates were delivered in time for Christmas
Martin Seidenberg said the current arrangement was ‘simply not sustainable’, his remarks fuelling fears that the Saturday post will be scrapped.
Royal Mail said that the number of parcels delivered through its network in the final three months of last year jumped by 21 per cent as customers returned after the end of the strikes by union members.
The business also saw quarterly revenues rise 13.1 per cent to £2.3billion.
A large chunk of this came from three controversial stamp price increases over the last 18 months, which took the cost of first class delivery to £1.25 – or £10 for a book of eight.
Once GLS was included, IDS revenues hit £3.6billion for the three months to the end of December, up 9.8 per cent on a year earlier.
Seidenberg said the results showed a ‘marked improvement’ for Royal Mail over the festive period and added that the firm needed to ‘build on this momentum’. Shares in the group rose 2.1 per cent, or 5.2p, to 251.1p.
The delivery rates are a rare bright spot for Royal Mail, which has in recent years been roundly criticised for repeatedly missing its targets and leaving some people waiting weeks for their post to arrive.
Detailed delivery data on the festive period is yet to be published, but the latest figures covering the three months to September showed only 74 per cent of first-class post arrived on time, well below the target of 93 per cent.
Second-class post also fell short, with 91.3 per cent of deliveries on time during the quarter compared to the target of 98.5 per cent.
The shortfalls have prompted sharp criticism from the regulator, with Royal Mail slapped with a £5.6million fine from Ofcom in November for failing to meet its targets.
Royal Mail has argued that the legal requirement for it to deliver letters six days a week, which is known as the Universal Service Obligation (USO), is preventing the company from improving the business and competing with its rivals such as Amazon and Evri.
‘We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20billion letters when we are now only delivering 7billion,’ Seidenberg said.
It follows a letter sent earlier this month from the chief executive to Liam Byrne, chairman of the House of Commons business and trade committee, which said the requirements of the USO were ‘unrealistic’ and that Royal Mail may need to hike prices further or receive a taxpayer bailout to continue operating in its current form.
But campaigners and ministers have resisted talk of cutting back the service.
‘The service as we know it remains under onslaught and will change radically, arguably for the worse, if these proposals are allowed to happen,’ said consumer expert Martyn James.
The comments come as Ofcom prepares to publish options for the future of the USO, with the Royal Mail boss saying it was expected ‘imminently’.