Jersey & IOM casualties of Royal Mail £1bn loss

Category: News
Jersey & IOM casualties of Royal Mail £1bn loss

Royal Mail have published their unaudited preliminary results for the 52 week period ended 26 March 2023 revealing the company lost a billion pounds in the past year and now propose to cut service levels to Jersey and the Isle of Man.

Royal Mail’s loss was so great that the normally (and still) profitable GLS couldn’t bring the group balance sheet back into the black with a group loss of £577 million.

Alongside their results, they announced a consultation of which the most radical change is a proposal to cut flights to Jersey and the Isle of Man, with the option to dump flights to Guernsey without further notice if the deem it necessary in the future.

Do you have any comments on Royal Mail’s proposed changes to the relevant wording in the UK Post Scheme to make changes to the arrangements for change to the definition of due date for delivery to the Bailiwicks of Guernsey and Jersey and Isle of Man? Please explain the reasons for your answer.

Royal Mail consultation

The consultation is open until the 2nd of June 2023, with the intention that the changes will take place from the 3rd of August 2023.

Royal Mail’s argument is that letters are declining in favour of parcels, flights are expensive and they throw in a line about their environmental plan, Steps to Zero, which looks to reduce reliance on flights as the company works towards its 2040 net zero target. The real upshot is however that they would redefine the definition of ‘Due Date’ as it pertains to the Bailiwicks of Guernsey and Jersey and the Isle of Man to allow for additional working day(s) for sending and receiving mail to and from these territories

They also point out that the Islands aren’t covered by the Universal Service Obligation so they can act without needing legislation change. The only reason that a single price next day 1st Class service is available is that it’s always been that way. Incidentally, while Royal Mail intend to carry on delivering to the Islands but on a slower service than the UK, they don’t intend to reduce the price of stamps for these destinations.

The Bailiwicks of Guernsey and Jersey and the Isle of Man are British Crown Dependencies and are not part of the UK. As such, they are not covered by the domestic requirements under Ofcom’s Designated Universal Service Condition, which include providing a next day delivery service to every address across the UK. We are therefore proposing to change the definition of ‘Due Date’ to these territories. This would provide greater flexibility in the future, allowing us to make changes to how we send the mail to these three territories without being bound by the Due Date set out in the UK Post Scheme.

– Royal Mail

This shouldn’t have too much impact on ecommerce within the UK, as Islanders will grudgingly accept that purchases will arrive in a less timely manner – quite simply they won’t have a choice. The only real impact is that platforms and retailers will want to adjust expected delivery dates for JE and IM Postcodes.

Where the impact will really be felt is for businesses based on the Islands and there are many. They will instantly be put at a disadvantage compared to the UK as their estimated delivery dates will have a day or so added on. If they currently offer express services, or if you have service obligations such as Amazon Seller Fulfilled Prime or qualification for eBay Premium Service, there’s no way you’ll be able maintain your seller standing and be based on Jersey or the Isle of Man.

It’s also worth nothing that there are many nurseries on the Islands who have transformed into D2C models shipping plants direct to consumers in mainland Britain. One wonders what state plants will arrive in when they’ve had an extra day added to the transit time.

One Response

  1. I would like the next boss of Royal Mail to remember the following: climate change, cost of living crisis, covid 19, working from home, brexit, war in Ukraine, recession. If you can think of any more excuses, please feel free to add them!

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