Ofcom has fined Royal Mail £10.5 million for failing to meet delivery targets in the 2023/24 financial year.
This is the second financial penalty in just over a year, following a £5.6 million fine in November 2023.
According to Ofcom, Royal Mail delivered 74.7% of First Class mail and 92.7% of Second Class mail on time, falling short of the regulator’s annual benchmarks of 93% and 98.5%, respectively.
Ofcom rejected Royal Mail's explanation that financial difficulties and industrial action delays were valid reasons for its poor performance, asserting that the company did not take sufficient steps to address service failures.
Ian Strawhorne, Ofcom's director of enforcement, stated “With millions of letters arriving late, far too many people aren’t getting what they pay for when they buy a stamp.
“Royal Mail’s poor service is now eroding public trust in one of the UK’s oldest institutions.
“This is the second time we’ve fined the company since the pandemic. Royal Mail has provided an improvement plan, and we’re seeing some signs of progress, but it must go further and faster to deliver the service that people expect.”
Royal Mail is in the process of being taken over by Czech billionaire Daniel Kretinsky, who intends to acquire London-listed parent company International Distribution Services PLC (LSE:IDS) for £3.6 billion.
With letter volumes in decline, Kretinsky is expected to strengthen Royal Mail’s parcel delivery division.