Royal Mail has been handed a £21m fine by the UK's communications regulator, Ofcom, for missing its delivery targets for the 2024/2025 financial year.
The British postal service and courier company was penalised for the third consecutive year, with fines of £5.6 million in November 2023 and £10.5 million in December last year.
According to Ofcom's investigation, it was revealed that Royal Mail only delivered 77% of its First Class mail and 92.5% of its Second Class Mail on time, falling short of the 93% and 98.5% targets, respectively.
Royal Mail's First Class and Second Class delivery types are its primary services for sending letters and parcels within the UK.
First Class mails are expected to be delivered on the next working day (including Saturdays) and 2-3 working days (including Saturdays) for Second Class mails.
Ofcom stated that the delays were due to the "inefficient and insufficient" efforts by the British courier company to improve its delivery performance.
"Millions of important letters are arriving late, and people aren't getting what they pay for when they buy a stamp," Ofcom's enforcement director Ian Strawhorne said.
The £21m penalty adds to Royal Mail’s financial woes, as it reported a £348 million loss in the 2023/2024 financial year.
The courier company however returned to a profit line, reporting £12 million in the 2024/2025 financial year.
Ofcom has warned that fines may continue if Royal Mail fails to urgently initiate a "credible improvement plan".
It added that Royal Mail announced an improvement plan for 2024, in a bid to deliver 85% of First Class posts and 97% of Second Class posts on time, but the plan "has not materialised."
The regulator's investigation discovered that Royal Mail "breached its obligations by failing to provide an acceptable level of service without justification".
Mr Strawhorne added that "Royal Mail must rebuild consumers' confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises".
The fine, according to Ofcom, indicated the "harm suffered by customers" due to Royal Mail's poor service delivery.
Responding to the fine, a Royal Mail spokesperson said, "We acknowledge the decision made by Ofcom today and we will continue to work hard to deliver further sustained improvements to our quality of service."
