Royal Mail in the spotlight on the threat to the universal postal service

This morning Moya Greene will for the first time appear in public to make the case about why the universal, UK-wide postal service is in imminent danger.

The chief executive of Royal Mail is due before the Business Select Committee in the House of Commons.

If the written evidence Royal Mail has sent to the committee is anything to go by, her words will certainly be punchy.

“Without urgent intervention from Ofcom [the postal regulator], there is a clear and growing threat to the finances of the universal service,” that evidence says of the Universal Service Obligation (USO) which orders Royal Mail to deliver letters to every part of the UK, six days a week, for a single price.

“A tipping point could be reached. The universal service could become unviable before effective changes can be implemented.”

Royal Mail claims postal competitors such as TNT Post – now called Whistl – are allowed to cherry pick lucrative urban postal routes, leaving Royal Mail to support the costly rural services, which means Royal Mail is finding it increasingly hard to make the requisite profits to support the USO.

Investors are concerned about Royal Mail’s performance in the highly competitive business of delivering mostly brown packages to workplaces and houses.