Saturday postal deliveries are to be axed in a bid to cut costs as Royal Mail is losing £1 million per day, the chairman of the company has revealed.
Speaking to the Today programme, Keith Williams CBE said the company is looking at ending Saturday letter deliveries, adding: ‘Our consumers are not looking for that.’
Parcel deliveries would continue on the weekends, but the company says 97 per cent of UK consumers would find a five-day letter delivery service acceptable.
It comes as 97.1 per cent of Royal Mail workers polled voted in favour of strike action over pay and conditions, amounting to 115,000 staff members.
The strikes could be the first of a fresh wave of action in the coming months, with teaching and NHS staff also considering walk-outs.
Chairman Keith William said Royal Mail is losing £1 million per day and must make changes to become more competitive in the parcel market
Royal Mail is set to scrap Saturday letter deliveries and also introduce later start times for employees
The dispute between postal workers and the Communication Workers Union (CWU) comes as employees argue the 5.5 per cent pay rise offered by the company actually amounts to a real terms pay cut due to rising inflation levels.
Yesterday the latest figures showed that inflation in the UK has now risen to 9.4 per cent.
Mr Williams said that while the company’s international business is profitable, Royal Mail’s UK operation is a ‘loss making’ business.
He said 60 per cent of activities are now parcel deliveries, and the company ‘must adapt’ to compete with competitors.
He said: ‘This is a highly unionized environment in which we exist at Royal Mail, but it actually doesn’t change the things that need to happen.
‘Royal Mail is effectively a 60 per cent parcel parcel business […] and we need to adapt to that market.’
He added: ‘Inflation faces everybody. Yes we have increased stamp prices, but what you’ve got to realise is the volume of stamps is decreasing every year.
‘Stamps are not the major source of revenue for Royal Mail today, the major source of revenue is parcels.’
In May of this year, first class stamps rose by 10p each to cost 95p, while second class rose by 2p to 68p.
Mr Williams stressed the company must adapt to face current challenges to become more competitive – and this seems to include stopping Saturday postal deliveries, as well as later start times for employees.
‘We want to compete, which is exactly why we are asking our employees for the changes we are asking for.’
Responding to the issue of strikes, he said: ‘For the employees we have the best terms and conditions in the industry.
‘We pay 40 per cent more than other parcels companies. We want to retain those terms and conditions, and the best way to do that is to make the changes.’
But he added this does not change the fact that despite making ‘a lot of money’ during the pandemic with a spike in parcel deliveries and test kit deliveries, it is now losing £1 million every day.
When pressed about allegations from the CWU that the company is not being honest with employees, Mr Williams said: ‘We’re very happy to open the books up to the trade union.
‘We’ve always tried to enjoy a good relationship with the union.’
The CWU celebrates its workers voting overwhelmingly for strike action over changes to pay and conditions
He said Royal Mail would do its best to deliver ‘important mail’ such as NHS mail to customers throughout the strike period.
The CWU is demanding that Royal Mail group enters into negotiations to secure ‘a straight, no-strings pay increase for workers.’
CWU General Secretary Dave Ward said of the ballot on strike action: ‘This stunning result is a testament to the phenomenal efforts made by CWU members across the country.
‘It is also a vote of no confidence in Royal Mail’s CEO and board, who should seriously consider their futures in our industry.
‘Crucially, the vote can leave no doubt that postal workers are united, and that they are demanding the proper pay rise they deserve.
‘While bosses rake in £758 million in profit and shareholders take £400 million, workers are expected to take a serious real-terms pay cut.
‘Postal workers won’t accept their living standards being hammered by bosses who are typical of business leaders today – overpaid, underqualified, out of their depth.
‘The CWU’s message to Royal Mail’s leadership is loud and clear – not a single postal worker in this country will budge until you get serious and give them a dignified, proper pay rise.’
Keith Williams CBE has been chairman of Royal Mail since 2018,and was formerly Chief Executive of British Airlines from 2011 to 2016.
He told the Today programme he has a record of ‘solving disputes’, not ‘having disputes.’
Royal Mail’s sales in the three months to the end of June came in at £1.88bn – down 11.5% on the same period last year.