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Last Updated: Tuesday, 31 August, 2004, 12:00 GMT 13:00 UK
Royal Mail misses service targets
Postman delivering in country lane (Royal Mail)
The Royal Mail says its service is improving
The Royal Mail has failed to hit any of its 15 performance targets, but says the service is improving.

For the three months to June, just 88.3% of first class letters were delivered the next day, against a target of 92.5%.

Royal Mail blamed service changes introduced earlier this year for the poor service and said the situation had since improved.

In August, about 92% of first class post was delivered on time.

Bad news

Deliveries over the period were the poorest for three years, postal watchdog Postwatch said.

Oxford - 68% first class post on time (down by 19.5%)
Halifax - 83.1% (-7.9%)
Northern Ireland - 84.9% (-7.8%)
Huddersfield - 87.2% (-7.6%)
Exeter - 83.3% (-7.5%)
*SOURCE: Postwatch using Royal Mail figures for three months to June

More than 1.7 million first class letters were not delivered on time between April and June, Postwatch said, adding that Royal Mail had only exceeded its targets in six of the country's 121 postcode areas.

"For the last three years customers have been paying higher prices for a declining service. This is a bad consumer equation," said Postwatch chairman Peter Carr.
I still don't know how many of my letters go missing or went to the neighbour's rubbish bin .
Dina, Halifax-UK

The service figures gain greater significance when placed against the backdrop of impending liberalisation in 2007.

From this date the Royal Mail will face competition for domestic delivery, and poor service could mean lower profits if customers decide to go elsewhere.

Targets 'in sight'

Royal Mail chief executive Adam Crozier said there was real evidence the service is getting better.

"Clearly there were some problems in the spring but the service has improved, month-on-month, since May and we are now approaching our target level for first class mail." he said.

Northamptonshire - 84.3% first class mail on time (up by 10%)
South east London - 90.7% (+6.3%)
South west London - 87.2% (+5.1%)
Watford - 93.3% (+4.3%)
Romford - 90.5% (+3.4%)

Mr Crozier took control of the letters business in May, when just 87.2% of first class post was delivered on time.

He added that the Royal Mail hoped to hit all of its targets within the coming months.

The Royal Mail hit four of its 15 targets in August, preliminary figures show. About 98.5% of second class post is now being delivered on time, compared with 98.3% in April.

The company has also introduced 95% of the operational changes it wants to and is on track for greater profitability, Mr Crozier said.

"Royal Mail is now operating profitably after launching its renewal plan two-and-a-half years ago when the company was losing more than 1m every working day," he said.

However, Postwatch chairman Peter Carr added that the figures would pose "serious problems" for industry regulator Postcomm, which has yet to decide whether to penalise the Royal Mail for failing to meet last year's targets.

Royal Mail confirmed it expects to pay out a record 50m in compensation for late delivery of post during last year's industrial action - much lower than the 80m bill experts had forecast.

A spokeswoman said 16.5m has already been paid to domestic customers and a further 35m could be used to compensate business customers.

'A way to go'

BBC business editor Jeff Randall told Radio 4's Today programme that the service is improving, but warned more could still be done.

For the last three years customers have been paying higher prices for a declining service
Peter Carr, Postwatch
He added that Mr Crozier has until the end of the year to show that his leadership is working - otherwise he could face the axe.

The Communications Workers Union (CWU) agreed that the figures made "grim reading" but welcomed recent improvements.

"The challenge is to sustain real improvements between now and Christmas," deputy general secretary Dave Ward said.

He warned that service could suffer if the focus was on "quick fix" initiatives to improve profits.

Royal Mail Quality of Service targets
Product Full Year targets % Results %
First class stamped and metered 92.5 88.3
Second class stamped and metered 98.5 98
First class PPI 90.6 81.9
Second class PPI 97.4 94.3
First Class response services 90.3 73.8
Second class response services 97.5 93.9
Mailsort 1 91 86.4
Mailsort 2 97.5 95.8
Mailsort 3 97.5 97.1
Presstream 1 90.5 85.5
Presstream 2 97.5 96.3
Special delivery 99 97.7
Standard retail parcels 90 87.7
All postcode areas (except Lerwick, Hebrides, Kirkwall) to achieve 91% next day delivery of first class mail posted in that area to any other UK postcode 118 postcodes to achieve this 17 achieved this
All postcode areas to achieve 92.5% next day delivery of first class mail posted in that postcode area 121 postcodes to achieve this 83 achieved this
Source: Royal Mail*

*Royal Mail targets explained:

  • First class stamped and metered mail is ordinary mail stamped or franked for delivery the next day.
  • Second class stamped and metered mail - as above, for delivery within three days.
  • First/second class postage paid impression - pre-printed alternative to stamps or franking.
  • First/second class pre-paid envelopes used for clients to respond to companies in a freepost envelope.
  • Mailsort 1 - next working day delivery.
  • Mailsort 2 - delivery in three working days.
  • Mailsort 3 - delivery in seven working days.
  • Presstream 1 - next working day delivery for newspapers and magazines sent out at least four times a year. Does not include catalogues, brochures or direct mail.
  • Presstream 2 - delivery in three working days for newspapers and magazines sent out at least twice a year.
  • Special delivery - guaranteed next day delivery.
  • Standard retail parcels - ordinary parcels.

The BBC's Rory Cellan-Jones
"Managers deny they are putting profits before service"

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