Ofcom has imposed a £10.5 million fine on the UK's Royal Mail for failing to meet its delivery performance targets during the financial year 2023/24. The postal service managed to deliver only 74.7% of first-class mail and 92.7% of second-class mail on time, falling short of the required targets of 93% and 98.5%, respectively. This marks the second consecutive year that Royal Mail has faced penalties for poor performance, following a £5.6 million fine in November 2023 for the previous year's shortcomings [f960a469].
The financial penalty adds additional pressure on Royal Mail as it prepares for a potential takeover by Czech billionaire Daniel Křetínský. The ongoing struggles with delivery performance are compounded by the broader challenges facing postal services in both the UK and the US, including significant financial losses and declining mail volumes [f960a469].
In the United States, the United States Postal Service (USPS) reported a staggering net loss of $9.5 billion for the fiscal year ending September 30, 2024, which is $3 billion larger than the previous year's deficit. USPS has been implementing price hikes, including an increase in first-class mail stamps from 68 cents to 73 cents, as part of its ten-year 'Delivering for America' plan aimed at achieving financial sustainability [39e89c16].
Both postal services are navigating a challenging landscape, with USPS losing over $100 billion since 2007 and facing projected losses of $160 billion over the next decade. The need for restructuring and operational changes is evident as both organizations strive to maintain their viability in an evolving postal market [1865cb62].