Fears for Christmas trade as Royal Mail puts cap on collections

[TopperGas]

The full story is hidden behind pay wall but basically it seems that RM are going to limit retail customers to three times their normal deliveries at Christmas. It seems an odd move to basically try and stop them from using RM to deliver their packets and parcels at over Christmas?

If retail customers are forced to use an alternative delivery company over Christmas will they them move all their custom to the alternative supplies?

https://www.thetimes.com/business/entre ... -wms7bbtmt

[NWpostie]

Madness

[SpacePhoenix]

They'll probably just use DSA, then RM still has to deliver the same amount but gets less money for it.

[taurus88]

They obviously realised how disastrous the new revisions will be and are trying to mitigate that somewhat, especially with parcel volumes already at ridiculous highs for this time of year.

[TopperGas]

They'll probably just use DSA, then RM still has to deliver the same amount but gets less money for it.

I thought DSA was for letters not packets/parcels?

[TopperGas]

They obviously realised how disastrous the new revisions will be and are trying to mitigate that somewhat, especially with parcel volumes already at ridiculous highs for this time of year.

Most likely but it still seems odd to turn away parcel business, which you have to assume is the most profitable.

[Mr Rush]

They obviously realised how disastrous the new revisions will be and are trying to mitigate that somewhat, especially with parcel volumes already at ridiculous highs for this time of year.

Nothing unique about the pending DM26 shitshow. This story is from 2023 when Christmas was long since out of control...

Business account customers will be asked to pay a new 2p green surcharge.
[...]
Business account customers will also be asked to pay an additional peak surcharge of 5p for letters and 10p for parcels later in the month.
[...]
A Royal Mail spokesperson said:[...] "Other parcel carriers already apply a similar surcharge during the Christmas period."

[SpacePhoenix]

They'll probably just use DSA, then RM still has to deliver the same amount but gets less money for it.

I thought DSA was for letters not packets/parcels?

I'm fairly sure it's available just most firms use Tracked.

[Basildon Bond]

https://www.thetimes.com/business/entre ... -wms7bbtmt

Fears for Christmas trade as Royal Mail puts cap on collections

Limit for businesses over festive period will be three times normal capacity, which may restrict growth at ‘make or break’ time

Jess Jones | Tuesday June 30 2026, 3.45pm BST, The Times

Small businesses could be throttled during the festive period this year after Royal Mail announced a cap on daily collection capacities.

Under new terms changes, daily business collection capacity in November and December “will be limited to a maximum of 3 times the usual collection capacity used”, Royal Mail said in a letter to its business customers.

The “collection capacity” refers to the physical volume of mail counted in sacks, cages or parcels that Royal Mail contractually agrees to pick up from a company’s premises during their scheduled daily slot.

The cap, which will apply on top of any existing volume limits in a company’s contract, is likely to heavily penalise seasonal businesses that rely on scaling up rapidly for the Christmas holidays rather than shipping consistently year-round.

“Christmas is make or break for many small firms,” Tina McKenzie, policy chair of the Federation of Small Businesses, said. “It’s the biggest trading period of the year, with orders piling up as shoppers buy gifts and businesses work flat out to keep up with demand.

“At a time like this, the last thing firms need is to be told there’s a cap on collections. Many rely on Royal Mail picking up parcels from their premises because stepping away to queue at a post office simply isn’t practical when every minute counts.”

McKenzie added that the uncertainty over the limit “piles unnecessary pressure on small businesses at the worst possible moment. They need confidence that the postal service will support them through their busiest season.”

A Royal Mail spokesman said: “The Christmas period is our busiest time of year, where volumes double. As part of our routine peak planning, we agree appropriate daily collection volumes with our business customers.

“This helps us plan effectively and provide a reliable service. Very few customers require more than three times our usual collection capacity and in such cases we’ll discuss with them individually.”

Businesses are facing higher distribution costs after a recent sharp rise in Royal Mail’s fuel and energy surcharge, which rose in May from 11 per cent to 16 per cent for domestic services and from 8 per cent to 13 per cent for the Parcelforce Worldwide service.

Royal Mail previously said the increase was a response to “rising cost pressures outside of our control, including the ongoing situation in the Middle East and the resulting impact on global oil and fuel prices.”

It comes amid a wider squeeze on businesses using Royal Mail, as the carrier lobbies to remove a separate cap that limits annual price increases for second-class stamps. The regulatory safeguard, which has been in place since the company was privatised more than a decade ago, means Royal Mail can only increase the price of a second-class stamp in line with the consumer prices index.

However, no such cap exists on first-class stamps, leading to a divergence in pricing. While the protected second-class stamp has risen from 50p at privatisation to its current price of 91p, a first-class stamp has soared over the same period from 60p to £1.80.

The changes are part of a wider operational push under Daniel Kretinsky, who took over Royal Mail’s parent company, International Distribution Services, in 2022. Kretinsky, who also owns a large stake in Sainsbury’s, is attempting to put the postal service on a firmer financial footing as it consistently misses key performance targets.

Ofcom fined Royal Mail £21 million last year because its delivery performance fell “well short” of targets for first and second-class mail, with the regulator saying that “people aren’t getting what they pay for when they buy a stamp”. The penalty was the third from Ofcom in recent years after a £5.6 million fine in 2023 and a £10.5 million fine in 2024.

Royal Mail recently pledged to invest £500 million over the next five years to improve its on-time delivery rates. The turnaround plan includes cuts to second-class deliveries on Saturdays, which started in May, and an agreement to transition roughly 6,000 part-time postal workers into full-time roles to shore up the network.

‘We rely on Royal Mail. Now it’s capping our growth’

Gordon Leatherdale is the founder of Natural & Noble, a Wiltshire-based business selling DIY drinks kits, which launched in 2018.

The company relies on the national postal service for all its direct-to-consumer sales, which make up 30 per cent of its total annual revenue of about £750,000.

Leatherdale appeared on the BBC show Dragons’ Den in March to pitch his business and has since enjoyed a large sales boost. “Therefore we decided to invest a lot in direct-to-consumer marketing this year,” the small business owner said.

“We’re very Christmas-focused,” added Leatherdale, 51, who views the changes as Royal Mail “putting a cap on our ability to grow and to fulfil orders”.

The brand’s products allow people to create their own spirits at home, including gin, rum, vodka and whisky infusion sets, as well as cocktail kits. They are heavily geared toward gifting, so the timing of the capacity restrictions is likely to be especially challenging.

“For us at this time of the year, we might only send out 20 or 30 orders a day,” he said. “But at Christmas time, particularly mid-November to mid-December, we’re sending out 15 to 20 times that amount — as opposed to the [new] Royal Mail cap of three times.”

Two other businesses down the road at Broad Lane Farm, a business park near Devizes, were similarly “baffled” by the changes, Leatherdale said. “We rely on Royal Mail to pretty much take everything we can sell. It is that infrastructure partner that you can historically rely on — unless they’re striking — to send your orders.”

He said Natural & Noble had already “endured” a lot during the postal strike in 2022 when, according to his calculations, the business lost about £45,000 worth of orders.

[Deadly]

Is this per collection or in total over the Christmas period?

Many firms have extra collections daily at Christmas so the actual amount collected at each of these extra collections isn't much more than normal. If the total amount collected is counted then that is a different matter

[britwrit]

Other delivery companies don't increase their overall processing capacity to deal with Christmas because a lot of it (machinery, vehicles, building space) will sit idle for the rest of the year. In the same spirit, Royal Mail has decided that anything over three pick-ups a day won't be enough to pay for itself

One "solution" might be to encourage large retailers to drop off their stuff directly off at mail centres. But I don't see this happening right now - from my limited view of one shift at one mail centre?

[SpacePhoenix]

RM always have extra sites for Xmas Pressure, extra vehicles and extra staff (casuals).

[britwrit]

RM always have extra sites for Xmas Pressure, extra vehicles and extra staff (casuals).

#i guess with the article, maybe not so much this year?

I guess it's somewhat less cynical than it could be. They could clog up the processing pipeline as much as possible, take the customer's money and then deliver everything in the first week of January.

[SpacePhoenix]

RM always have extra sites for Xmas Pressure, extra vehicles and extra staff (casuals).

#i guess with the article, maybe not so much this year?

I guess it's somewhat less cynical than it could be. They could clog up the processing pipeline as much as possible, take the customer's money and then deliver everything in the first week of January.

It wouldn't take log for the entire pipeline to become clogged up. Sorted work would have to be sent on to the Inward MC, RDC, Superhub or DO no matter if they say they're full as for many MCs a lot of what's normally storage space most of the year will be used for housing extra sorting setups.