International Distributions Services, formerly Royal Mail Limited and Royal Mail plc, has proposed changes to its delivery services in order to improve financial efficiency, which include redundancy plans.

Royal Mail has been calling for reform to the mailing system for more than four years, after it posted losses of £419m in 2022/23 and £319m for the first six months of 2023/24.

It said that with a combination of declining letter volumes and increasing costs, the "universal service faces a very real and urgent financial sustainability challenge".

The delivery group announced that potential changes include changing non-first class letter deliveries, including second class post, to be delivered every other weekday, and standard bulk business mail, which would be aligned to second class, arriving within three weekdays instead of two.

The changes come as Ofcom revealed that letter volumes have declined from a peak of 20 billion a year in 2004/05 to seven billion in 2022/23.

Volumes are expected to drop to around four billion in the next five years.

Group chief executive officer at International Distributions Services, Martin Seidenberg, said: "The fact that letter volumes have dropped from 20 billion to seven billion a year means that the universal service is now unsustainable.

"If we want to save the universal service, we have to change the universal service. Reform gives us a fighting chance and will help us on the path to sustainability. Our proposal is based on listening to thousands of people across the United Kingdom to ensure it meets their needs. We have worked hard to come up with a proposal that is good for our customers, good for our people and would allow Royal Mail to invest in products and services that the UK wants.

"We have serious concerns that the urgency of the situation is not properly recognised by Ofcom. With no need for legislation there is no need to wait."

Looking forward, the group said that if changes were "fully and swiftly implemented”, it would reduce the net cost of the service by up to £300m per year.

It added that these savings would allow Royal Mail to continue to invest in the modernisation and transformation of the business to "provide products and services that customers want and reduce its environmental impact".

However, although no compulsory redundancies are expected, the firm announced that there are set to be less than 1,000 voluntary redundancies.

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