Royal Mail: six-day delivery under threat

Profits fall as company is squeezed by TNT and Amazon

Updated: 
Royal Mail beats target for delivery of letters

Royal Mail has warned its six-day delivery mandate is coming under threat as a result of increased competition from rivals.

It has called on communications watchdog Ofcom to expedite its review into the industry, claiming changes are needed to safeguard its nationwide, same price goes anywhere service.

Because rivals like TNT aren't bound by the same requirement, they are able to cherry pick the most lucrative delivery services, giving them an unfair advantage, the Royal Mail claimed.

Parcel volumes, letter revenues up

The company today posted a drop in half-year profits today after its parcels arm was squeezed by Amazon's drive to deliver more of its own business.

Parcel volumes were up 2% in the six months to September 28 but Royal Mail said the division's revenues fell 1% in a "highly competitive" marketplace as Amazon's use of its own network caused rivals to fight harder for business.

Across the group, pre-tax profits were £218 million in the six month period, compared with £233 million a year earlier.

Addressed letter volumes fell by 3% but this was better than expected due to the improvement in economic conditions. Letter revenues increased by 1% to £2.24 billion as a result of price increases and an uplift from elections mail.

In the first half of the year, Royal Mail delivered around 200 million candidate mailings, mainly due to European and local government elections in May.

For the Scottish independence referendum, the company said it delivered over seven million campaign mailings and over five million poll cards.

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