Posted By Global Banking and Finance Review
Posted on December 13, 2024
(Reuters) - Britain's media regulator Ofcom on Friday fined Royal Mail, owned by International Distribution Services (IDS), 10.5 million pounds ($13.26 million) for failing to meet delivery targets over the past year.
This is the second fine issued against the company after it was fined $6.9 million in November 2023 for failing to meet delivery targets.
"This is the second time we've fined the company since the pandemic. Royal Mail has provided an improvement plan, and we're seeing some signs of progress, but it must go further and faster to deliver the service that people expect," said Ian Strawhorne, Director of Enforcement at Ofcom.
IDS blamed its challenging financial position and delays related to last year's union strike. However, the regulator said it did not consider these as "justifiable reasons" for its poor service.
The London-listed company said it looks forward to the regulator's consultation in January, which will enable the required changes to be made by summer.
The parent company of Britain's Royal Mail had warned of a worsening cost environment following last month's budget and said it could not rule out price hikes and increased automation as it looks to cut costs after returning to a profit in the first half.
Ofcom had opened its second probe into Royal Mail's failure to meet its delivery targets for 2023-2024 in May.
($1 = 0.7921 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Abinaya Vijayaraghavan)