Stronger protections for parcel customers


INSIGHT
Published
Dec 9th '21
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  • Ofcom plans to improve how delivery firms handle complaints
  • New rules to ensure disabled people are treated fairly by postal companies
  • Regulatory certainty to allow Royal Mail to modernise, but with greater transparency on efficiency

 

People sending and receiving parcels in the UK should be treated more fairly by delivery companies, under new protections proposed by Ofcom.

 

More than ten million parcels are delivered on an average day in the UK. Most deliveries are problem-free, and customers’ overall satisfaction is high. But when things go wrong, customers often encounter problems.

 

Ofcom has found that almost two thirds (64%) of customers have experienced problems with deliveries in the last three months.[1]

 

Around a quarter of senders find it difficult to make a complaint, or to contact parcel operators, when their delivery goes wrong. Two in five say their complaints are only partially resolved, while almost one in ten are left with their complaint completely unresolved.

 

Evidence also suggests an inconsistent level of service across the industry: customers’ satisfaction scores on complaints handling range from just 29% for one operator to 71% for another.

 

Image: Ofcom

 

New rules for parcel firms

Ofcom are proposing new guidance requiring all parcel firms to tighten up their complaints handling. They also plan to require better protections for disabled customers, who are almost 50% more likely to experience significant problems with parcel deliveries.

 

Under existing rules, all postal operators must have a simple and transparent complaints process in place.[2] Ofcom now intend to set additional guidance, under which customers must be:

 

  • told who to contact, and what channels they can use to make a complaint;
  • told what the complaint process will be, and how long it will take to resolve;
  • dealt with by staff who have received appropriate training.

 

They are also proposing a new requirement for parcel firms to establish, publish and comply with clear and effective policies and procedures for the fair treatment of disabled customers. This includes ensuring that disabled customers can communicate their delivery needs to the parcel operator, and setting out how couriers will meet those needs when delivering parcels.

 

If Ofcom do not see substantial improvements in customer service and complaints handling, they will consider enforcement action or further regulation.

 

Parcel problems probed

Ofcom is publishing plans alongside their annual monitoring report on the postal market. This shows that people’s reliance on parcels continues to grow – a trend that has accelerated during the coronavirus pandemic.[3]

 

Some of the most common difficulties people experience when sending parcels include not getting through to the right person; the company refusing to take responsibility for the problem; and the length of time taken to resolve it. Many people also struggled to find out how to complain in the first place.

 

Disabled people are more likely to experience parcel delivery problems than most. These include couriers not allowing enough time at the door, parcels being left in inaccessible places, and operators not acting on specific delivery instructions provided to them.

 

What disabled customers said:

 

Image: Ofcom

 

Lindsey Fussell, Ofcom’s Networks and Communications Group Director, said: Parcel deliveries have become increasingly important to our daily lives and customers rightly expect a positive experience.  …  We’re planning to strengthen our rules to make sure people are treated fairly by delivery firms. If we don’t see significant improvements in customer service, we’ll consider enforcement action or tighten regulations further.

 

Maintaining strong regulation of Royal Mail

As the universal service provider, Royal Mail is subject to more regulation than other postal operators. For example, Ofcom set it strict annual delivery targets and impose a cap on second-class stamp prices. These are important safeguards and they have previously shown they will not hesitate to investigate if they believe Royal Mail has broken Ofcom rules.[4]

 

Ofcom review has found that these rules and safeguards are generally working well for people and businesses who use postal services. They also consider that continuing to allow Royal Mail commercial flexibility to respond to the changing market would allow it to continue to modernise its network for the digital age, and secure the long-term financial sustainability of the universal service.

 

Therefore, Ofcom propose maintaining the current framework for regulating Royal Mail for a further five years.

 

While the short-term sustainability of the universal service appears to be more secure than it was, the longer-term outlook remains uncertain. Royal Mail must adapt to the changing market, modernise its parcels operations and become more efficient, if the universal service is to be financially sustainable in the longer term. The main drivers for this are ultimately within the company’s control.

 

Ofcom continue to be concerned about Royal Mail’s efficiency performance. To increase their understanding of its longer-term sustainability outlook for the universal service, Ofcom propose requiring the company to set out its longer-term efficiency ambition and report publicly on progress against this.

 

Next steps 

Consultation on Ofcom’s review of postal regulation closes on 3 March 2022. Ofcom expect to publish a statement on  final decisions in summer 2022.[5]

 

Source: Ofcom

 

Background

  1. Ofcom undertook 2,019 online interviews with a nationally representative sample of adults across the UK. This research was conducted in January 2021 during a period of significant Covid-19 restrictions when operators experienced high demand and operational pressures, so we recognise that the findings are reflective of customer opinions and experiences during that period. In summer 2021, we undertook 3,379 online interviews with UK adults who had sent a parcel in the last 12 months.
  2. If you buy something from an online trader and your parcel is damaged or does not arrive, you are already protected by consumer law and can seek redress from the retailer.
  3. Growth in online shopping saw overall parcel volumes increase at a rate of around 10% per year between 2015 and 2020. However, in 2021 they increased by almost 50% compared to the previous year.
  4. Royal Mail is required by Ofcom to deliver at least 93% of first-class post – across the UK – within one working day of collection, and 98.5% of second-class post within three working days, assessed over the whole financial year (excluding the Christmas period). The safeguard price cap for second-class stamps is currently set at 66p. Last year, Ofcom fined Royal Mail £1.5m for missing its 2018/19 first-class delivery target, and £100k for overcharging customers for second-class stamps between 25 March and 31 March 2019.
  5. Ofcom last reviewed the regulatory framework for post in 2017 and at that time said it should remain in place until 2022.

 

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