5 February 2024
New Consultation Could Impact Future of Direct Mail
Involved in direct mail? Ofcom (and the BPIF) want to hear from you!
Ofcom, the regulator for communications and postal services, is seeking consumer and business views on the frequency of post deliveries in the UK. Currently, Royal Mail is required to deliver letters six days a week - knowns as the Universal Service Obligation (USO) - but this is now being questioned in the light of lower post volumes and the need to save money.
The regulator has published a consultation, with two basic options for the future of the Obligation:
(1) a slower service, with delivery taking up to three days or longer, and a next-day service still available for any urgent letters.
2) a reduced number of delivery days, from six per week down to five or even three days.
Across Europe, postal services are being reformed. Some countries have extended delivery times and/or reduced delivery frequency as people now write fewer personal letters. However, for public services and businesses, being able to reach people by post is vital - it remains a highly effective way to communicate to everyone, and especially important for elderly readers or those without regular internet access.
While bulk mail is not part of the USO specification, it is delivered using the USO network. So, Ofcom says that 'it is important that a national network is in place to convey these letters.'
Ofcom also recognises that:
''Royal Mail is likely to seek to replicate those changes (to the USO) in the bulk mail market, including in the access services it provides. This could lead to changes in large mail users' behaviour and, depending on the extent of any USO changes, we may therefore need to review the access obligations that apply to Royal Mail."
Ofcom: 'Call for input: The future of the universal postal service' (January 2024)
Postal services remain a vital communications tool for many people and businesses, but the way people use postal services has changed substantially. Since the Postal Services Act was passed in 2011, the legal obligations on the universal service provider Royal Mail have largely remained the same while letter volumes have halved, and parcel deliveries have become increasingly important.
As the UK's postal regulator, Ofcom oversees the universal postal service, making sure it meets people's needs while also considering its financial sustainability and efficiency. Royal Mail is required to deliver the universal service, and its obligations include offering to deliver letters MondaySaturday and parcels Monday-Friday as well as offering two delivery speeds for its main universal service products: First Class (next day) and Second Class (within three days). These obligations have not changed since 2011, despite significant changes in postal markets.
This document sets out evidence that suggests the universal service needs to change to better align with the needs of consumers and to ensure it can continue to be affordable and sustainable in the future. Ofcom is seeking input from all interested parties on our assessment, so there can be an informed public debate on how the specification should be modernised for the future.
Responding to the consultation
If you have views on any of the below questions, you should respond to Ofcom letting them know how proposed changes will affect your business. You don't have to respond to all the questions, just the ones you feel are relevant to you. The consultation closes on 3 April 2024.
If you respond, please copy us in to your submission, or forward it to us, as we hope to submit a BPIF response too.
Question 1: Do you agree that we have identified the correct aims, supporting principles and features of the USO? Do you consider that these should continue to be respected as far as possible when assessing potential changes to the USO?
Question 2: Do you agree with our assessment of the direction of change in postal needs of residential (including vulnerable) users and SMEs? Are there other factors relevant to their future demand which we have not considered?
Question 3: Do you agree with our assessment of the bulk mail market? Are there other factors relevant to its future evolution which we have not considered?
Question 4: Are there specific events/changes that could trigger a significant change in demand for large mail users, including public services?
Question 5: Do you agree with our proposed approach to estimating the financial burden of the USO?
Question 6: Do you agree with our considerations regarding the unfairness of the financial burden of the USO?
Question 7: Do you agree with our considerations regarding the impact of the financial burden of the USO?
Question 8: Do you agree with our analysis of the different options available to change the USO and the impact of those changes on residential (including vulnerable) users, SMEs and bulk mail users? If not, please explain why and set out any option(s) which we have not considered.
Question 9: Which option(s) do you consider would be most appropriate to address the challenges we have identified, while also ensuring that users' needs are adequately met?
Question 10: Do you have any other views about how the USO should evolve to meet users' needs?
12 January 2024
Access the latest edition of the Economic Newsletter for the European Printing Industry for data on paper consumption, and pricing data for pulp, paper and recovered paper.
5 February 2024
Involved in direct mail? Ofcom (and the BPIF) want to hear from you! Ofcom, the regulator for communications and postal services, is seeking consumer and business views on the frequency of post deliveries in the UK. Currently, Royal Mail is required to deliver letters six days a week - knowns as the Universal Service Obligation (USO) - but this is now being questioned in the light of lower post volumes and the need to save money.
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