(Alliance News) - International Distributions Services PLC's Royal Mail arm has been fined by the UK communications regulator for not meeting its targets for mail delivery.
Ofcom said the British mail delivery service failed to meet its first and second class delivery targets in financial year 2023 that ended late March, ordering a fine of GBP5.6 million. The amount is 30% lower than it could have been, given that Royal Mail admitted liability and agreed to settle the case.
In financial 2023, Royal Mail's reported performance showed delivery rate of about 74% of first class mail on time, compared to an Ofcom rule of 93%, and 91% of second class mail on time versus Ofcom's rule of 98.5%, and completed 89% of delivery routes for each day on which a delivery was required.
The regulator said the firm still underperformed against its targets, even after adjusting for industrial action, extreme weather and the Stansted runway closure.
"Clearly, the pandemic had a significant impact on Royal Mail's operations in previous years. But we warned the company it could no longer use that as an excuse, and it just hasn't got things back on track since. The company's let consumers down, and today's fine should act as a wake-up call - it must take its responsibilities more seriously. We'll continue to hold Royal Mail to account to make sure it improves service levels," said Ofcom Director of Enforcement Ian Strawhorne.
In response to the fine, IDS said it was "very disappointed" with its Quality of Service performance during the period.
"Last year was uniquely challenging for Royal Mail. Quality of service was materially impacted by the long-running industrial dispute which included 18 days of strike action. We are pleased that Ofcom has acknowledged that elements outside of Royal Mail's control had a significant impact on service levels and has adjusted the figures to 82% for first class and 95.5% for second class mail," the firm said.
International Distribution shares were 0.9% lower at 237.90 pence each on Monday morning in London.
By Tom Budszus, Alliance News reporter
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International Distributions Services (IDS)