Licence Condition 4.6 (a) and (b) Licence Condition 4.9 (a) Licence Condition 5.6 (a) and (b) National Report To Postcomm and Postwatch 2007/08 Quarter 1 Report
NATIONAL QUARTER 1 REPORT 2007 / 2008 CONTENT PAGE Overview Of Quality Of Service Performance - Quarter 1 2007/08 1-2 Table 1 Scheduled Service Standards & Standardised Measures 3 Actual Quarter Results Table 2 Postcode Area (PCA) First Class Stamped and Metered Delivered in PCA 4 5 Actual Quarter Results Table 3 Percentage of Deliveries By Latest Delivery Times 6 Actual Quarter Results Table 4 Percentage Of Collections At Or After Final Advertised Time of Collection 7 Actual Quarter Result Table 5 Downstream Access Products 8 Actual Quarter Results Table 6 Business Collections Served Each Day 9 Actual Quarter Results Table 7 Business Collections Made No Earlier Than The Collection Window 10 Actual Quarter Results Commentary on Performance 11-14 Table 8 Licence Condition 5.6 Complaints Report 15
OVERVIEW OF QUALITY OF SERVICE PERFORMANCE This report is produced in accordance with Conditions 4.9(a), 4.6(a) (b) and 5.6(a) (b) of Royal Mail's amended Licence dated 25 May 2006. The Annex to Condition 4 of the Licence details twelve Scheduled Services or Standardised Measures. Each of the twelve (apart from Special Delivery) has four performance bands, with the consequences of performance in each band explained in the Licence. This commentary compares actual performance in 2007/08 with the Performance Band 1 standard. The Quarter 1 reporting period for all measures except European International Delivery is 19 March 2007-3 June 2007 ( 11 weeks). The Quarter 1 reporting period for European International Delivery is 1 April 2007-30 June 2007. Overall, a good start to the new reporting year. For eleven of the twelve Scheduled Services or Standardised Measures Royal Mail performed in Quarter 1 at or above the full-year Licence requirement, as follows: Quarter 1 Actual cw Full-Year Target Retail First Class At target level Retail Second Class +0.3 Bulk First Class +1.5 Bulk Second Class +0.5 Bulk Third Class +1.9 Standard Parcels +3.8 European International Delivery +10.5 Special Delivery +0.1 Postcode Area % Delivered -20/118 PCAs % Of Collection Points Served Each Day At target level % Of Delivery Routes Completed Each Day +0.08 % Of Items Correctly Delivered +0.19 1
The only Standard below the Licence full-year target level after Quarter 1 is the geographical Postcode Area (PCA) measure of 1st Class Stamped and Meter Delivered From The UK. 20 Postcode Areas out of the targetted 118 were below the full-year target level. For several of these PCAs the results were adversely impacted by the consequences of industrial action at Edinburgh Mail Centre in Period 1 and weather disruption. However, the rest-of-year performance required in order to achieve the full-year target is achievable, assuming steady-state, at each of the PCAs based on historical performance. (NB. The PCA- level results at Quarter 1 are subject to wide statistical accuracy which will reduce as the year progresses as more samples are taken into account). The underlying performance for all the twelve Scheduled Services and Standardised Measures is on course to meet the full-year Licence targets, assuming no force majeure or indusrial action disruption. (However, the national level industrial action called by the CWU which started in Period 4 and continued throughout Quarter 2, together with the flooding in Yorkshire in Period 4 and the flooding in Gloucestershire, Worcestershire, Warwickshire and Oxfordshire in Period 5, have severely affected the results, which will be confirmed when the Quarter 2 Report is produced in November.) The following report details the results for Quarter 1. In addition, in accordance with the requirement from Postcomm, a written commentary is provided for any Scheduled Service or Standardised Measure, or for any products in the Bulk First Class or Bulk Second Class grouping, which falls into Band 3 or 4 of the performance bands as detailed in the Annex to Licence Condition 4. Cumulatively to the end of Quarter 1 this applies in three cases only: Response Services 1st Class Response Services 2nd Class Postcode Area: 1st Class Stamped And Meter Delivered From The UK The Licence also requires Royal Mail to provide quarterly results against the following Non-Standardised Measures which do not have Licence targetry: the percentage of deliveries in the UK which are made by the latest delivery time the percentage of collections in the UK which are made from Post Office letter boxes and other access points at or after the final advertised time of collection the percentage of Downstream Access products which are delivered on the first working day after receipt by Royal Mail Royal Mail has also agreed to provide from Quarter 1 2007/08 quarterly information in respect of business collections viz: percentage of business collections served each day percentage of final business collections made no earlier than the collection window 2
Table 1. Scheduled Services & Standardised Measures Actual Quarter 1 Results 2007-2008 Scheduled Services & Standardised Measures Standard Standards Quarter 1 Quarter 1 % % 95% cl Grouping 1 (Retail First Class) 93.0 93.0 +/- 0.2 Grouping 2 (Retail Second Class) 98.5 98.8 +/- 0.2 Grouping 3 (Bulk First Class) 91.0 92.5 +/- 0.4 1 st Class Postage Paid Impression - 92.7 +/- 0.3 1 st Class Response Services - 86.8 +/- 2.0 Mailsort 1-94.0 +/- 2.5 Presstream 1-92.8 +/- 1.0 Grouping 4 (Bulk Second Class) 97.5 98.0 +/- 0.4 2 nd Class Postage Paid Impression - 98.2 +/- 0.4 2 nd Class Response Services - 93.7 +/- 1.3 Mailsort 2-98.2 +/- 1.0 Presstream 2-97.5 +/- 1.5 Grouping 5 (Bulk Third Class) 97.5 99.4 +/- 0.7 Standard Retail Parcels 90.0 93.8 +/- 0.9 European International Delivery 85.0 95.5 +/- 0.8 Special Delivery # 99.0 99.1 ## Postcode Area Target % (Delivered) 91.5 (in 118/118) 98 of 118 Percentage Of Collection Points Served Each Day 99.90 99.90 Percentage Of Delivery Routes Completed Each Day 99.90 99.98 Percentage Of Items Delivered Correctly 99.50 99.69 +/- 0.12 Standard is full-year cumulative. ## Product subject to continuous sampling (confidence limit inapplicable). 95% cl = 95% confidence limit. # The result for Special Delivery is for all Special Delivery (Next Day) items. The Licence target is for Special Delivery (Next Day) other than when sold to users having an account with the licensee buying the service using their account. The Royal Mail measurement system is unable to separate the performance for account and non-account customers in this way. 3
Table 2. Postcode Area (PCA) First Class Stamped and Metered Delivered In PCA Actual Quarter 1 Results 2007-2008 Postcode Area Q1 C/L Postcode Area Q1 C/L Postcode Area Q1 C/L AB Aberdeen 92.9 +/- 2.3 DL Darlington 89.8 +/- 2.6 KW Kirkwall 93.4 +/- 2.3 AL St Albans 94.6 +/- 1.9 DN Doncaster 95.1 +/- 1.9 KY Kirkcaldy 85.9 +/- 3.1 B Birmingham 91.6 +/- 1.9 DT Dorchester 90.8 +/- 2.5 L Liverpool 93.9 +/- 2.0 BA Bath 94.0 +/- 2.1 DY Dudley 95.2 +/- 1.9 LA Lancaster 93.1 +/- 2.1 BB Blackburn & Burnley 91.7 +/- 2.5 E London East 93.9 +/- 2.4 LD Llandrindod Wells 92.2 +/- 2.4 BD Bradford 96.4 +/- 1.6 EC City of London 93.9 +/- 1.9 LE Leicester 95.0 +/- 1.9 BH Bournemouth 93.8 +/- 2.1 EH Edinburgh 91.2 +/- 2.6 LL North Wales 93.8 +/- 2.4 BL Bolton 91.7 +/- 2.4 EN Enfield 92.3 +/- 2.1 LN Lincoln 94.2 +/- 2.1 BN Brighton 91.4 +/- 2.4 EX Exeter 93.2 +/- 2.2 LS Leeds 91.3 +/- 2.3 BR Bromley 96.2 +/- 1.6 FK Falkirk 90.3 +/- 2.6 LU Luton 95.8 +/- 1.7 BS Bristol 94.8 +/- 1.8 FY Fylde 92.3 +/- 3.1 M Manchester 93.5 +/- 1.9 BT Northern Ireland 88.9 +/- 2.6 G Glasgow 94.7 +/- 1.8 ME Maidstone 92.2 +/- 2.5 CA Carlisle 94.2 +/- 2.2 GL Gloucester 95.0 +/- 1.9 MK Milton Keynes 93.2 +/- 2.1 CB Cambridge 92.5 +/- 2.5 GU Guildford 91.3 +/- 2.4 ML Motherwell 92.5 +/- 2.4 CF Cardiff 90.6 +/- 2.5 HA Harrow 95.2 +/- 1.8 N London N 93.9 +/- 2.0 CH Chester & Deeside 93.7 +/- 2.1 HD Huddersfield 94.1 +/- 2.0 NE Newcastle 93.1 +/- 2.2 CM Chelmsford 90.6 +/- 2.4 HG Harrogate 94.0 +/- 2.2 NG Nottingham 93.2 +/- 2.3 CO Colchester 91.0 +/- 2.6 HP Hemel Hempstead 92.9 +/- 2.2 NN Northamptonshire 93.6 +/- 2.2 CR Croydon 95.3 +/- 1.6 HR Hereford 94.4 +/- 2.3 NP Newport 92.9 +/- 2.4 CT Canterbury 93.7 +/- 2.1 HS Hebrides 86.9 +/- 3.6 NR Norwich 93.5 +/- 2.1 CV Coventry & Warwickshire 92.3 +/- 2.4 HU Hull 89.6 +/- 2.7 NW London NW 93.0 +/- 2.0 CW Crewe 91.4 +/- 2.4 HX Halifax 94.4 +/- 2.0 OL Oldham 92.1 +/- 2.3 DA Dartford 94.0 +/- 2.0 IG Ilford 94.9 +/- 2.1 OX Oxford 91.6 +/- 2.3 DD Dundee 86.3 +/- 2.9 IP Ipswich 93.0 +/- 2.2 PA Paisley 91.8 +/- 2.3 DE Derby 94.2 +/- 2.0 IV Inverness 93.7 +/- 2.1 PE Peterborough 94.5 +/- 1.9 DG Dumfries 92.1 +/- 2.4 KA Kilmarnock 92.0 +/- 2.4 PH Perth 86.3 +/- 2.8 DH Durham 93.8 +/- 2.2 KT Kingston upon Thames 95.4 +/- 1.8 PL Plymouth 93.0 +/- 2.4 = Areas below full-year target = Areas meeting or exceeding full-year target = Exempted from postcode area targets 4
Table 2. (Continued) Postcode Area (PCA) First Class Stamped and Metered Delivered In PCA Actual Quarter 1 Results 2007-2008 Postcode Area Q1 C/L Postcode Area Q1 C/L PO Portsmouth 91.7 +/- 2.4 TW Twickenham 95.4 +/- 1.7 PR Preston 93.4 +/- 2.0 UB Uxbridge 94.0 +/- 1.9 RG Reading 92.7 +/- 2.2 W London West 94.2 +/- 1.7 RH Redhill 95.9 +/- 1.7 WA Warrington 93.5 +/- 2.1 RM Romford 94.2 +/- 2.1 WC London West Central 94.5 +/- 1.9 S Sheffield 93.2 +/- 2.1 WD Watford 96.7 +/- 1.6 SA Swansea 90.6 +/- 2.6 WF Wakefield 95.6 +/- 1.8 SE London SE 93.7 +/- 2.1 WN Wigan 94.0 +/- 2.4 SG Stevenage 95.1 +/- 1.8 WR Worcester 91.5 +/- 2.4 SK Stockport 93.1 +/- 2.2 WS Walsall 93.3 +/- 2.1 SL Slough 93.9 +/- 1.9 WV Wolverhampton 94.5 +/- 2.1 SM Sutton 93.3 +/- 2.1 YO York 93.8 +/- 2.2 SN Swindon 92.7 +/- 2.2 ZE Lerwick 45.3 +/- 5.0 SO Southampton 90.5 +/- 2.7 SP Salisbury 94.1 +/- 2.2 SR Sunderland 93.3 +/- 2.9 SS Southend-on-Sea 93.1 +/- 2.1 ST Stoke-on-Trent 90.3 +/- 2.6 SW London SW 92.4 +/- 2.0 SY Shrewsbury & Mid Wales 92.1 +/- 2.6 TA Taunton 93.4 +/- 2.1 TD Borders 85.9 +/- 3.1 TF Telford 94.0 +/- 2.3 TN Tonbridge 94.7 +/- 1.9 TQ Torquay 94.3 +/- 2.1 TR Truro 94.1 +/- 2.0 TS Teesside 92.7 +/- 2.3 = Areas below full-year target = Areas meeting or exceeding full-year target = Exempted from postcode area targets 5
Table 3. Non-Standardised Measure: Percentage of Deliveries By Latest Delivery Times 2007 2008 Standard Urban Rural Quarter 1 Quarter 1 UK 99.5 99.9 6
Table 4. Non-Standardised Measure: Percentage Of Collections At Or After Final Advertised Time of Collection 2007 2008 Percentage Of Collections (From All Access Points Except Business Collections) At Or After Final Advertised Time of Collection National Result Quarter 1 UK 98.5 7
Table 5. Non-Standardised Measure: Downstream Access Products 2007 2008 Percentage Delivered On The First Working Day After Receipt By Royal Mail National Result Quarter 1 UK 95.9 +/- 0.5 8
Table 6. Non-Standardised Measure: Business Collections Served Each Day 2007 2008 Percentage Of Business Collections Served Each Day National Result Quarter 1 UK 99.80 9
Table 7. Non-Standardised Measure: Business Collections Made No Earlier Than The Collection Window 2007 2008 Percentage Of Final Business Collections Made No Earlier Than The Collection Window National Result Quarter 1 UK 98.0 10
1 ST CLASS RESPONSE SERVICES Quarter 1 Result Confidence Level 86.8 +/- 2.0 OVERVIEW 1 st Class Response Services is within the overall Grouping 3 (Bulk First Class) Scheduled Service which has a Licence Standard of 91.0 for full year performance. Quarter 1 result for the Grouping was 92.5, well above Standard. Royal Mail have consistently stated that the previous Licence target levels (which became the Grouping target levels from 2006/7) were not realistic for the RS product specification. It was for this reason that Royal Mail developed and launched in 2004/05 a new but complementary set of products, Response Plus, which give customers a choice. We have told Postcomm and Postwatch that we do not consider that the residual controlled Response Services products in the amended Licence are able to achieve the targets for the groupings. The actual results for RS should not be automatically considered against the grouping targets. 11
2 nd CLASS RESPONSE SERVICES Quarter 1 Result Confidence Level 93.7 +/- 1.3 OVERVIEW 2 nd Class Response Services is within the overall Grouping 4 (Bulk Second Class) Scheduled Service which has a Licence Standard of 97.5 for full year performance. Quarter 1 result for the Grouping was 98.0, above Standard level. As explained in the commentary for 1 st Class Response Services, the actual results for RS should not be automatically considered against the grouping targets. 12
POSTCODE AREA 1 ST CLASS STAMPED AND METER DELIVERED The Schedule Of Standardised Measures requires all Postcode Areas (excluding HS, KW and ZE) to achieve an average performance of 91.5% next day delivery for 1 st Class Stamped and Meter Delivered in the PCA throughout the 12 months period ending March 2008, excluding the Christmas period. Progress against this standard is shown in the table below: Number Of Postcode Areas Averaging 91.5% Or Above For 1 st Class Delivered Stamped And Meter Quarter 1 Result Full Year Cumulative Standard 98 out of 118 118 out of 118 The End-to-End measurement system is designed to produce results which have meaningful statistical accuracy on an annual basis. The results for a single quarter have wider statistical accuracy. We do not expect all Postcode Areas to be achieving the full-year target level at the beginning of the year as a single month of weaker performance with wide statistical accuracy can have a significant effect on the cumulative result. Obviously, as the year progresses the impact of that single month will decrease. The table below summarises the performance of the 20 Postcode Areas which after Quarter 1 are below the full year target level, together with the performance which is required during the remainder of the year in order for each to achieve its full year standard. In all cases, the rest-ofyear requirement is achievable assuming no force majeure or indusrial action disruption. (However, as stated in the Overview above, the national level industrial action called by the CWU which started in Period 4 and continued throughout Quarter 2, together with the flooding in several areas of the country in Periods 4 and 5, have severely affected the results, which will be confirmed when the Quarter 2 Report is produced in November.) 13
Postcode Area Quarter 1 Results Rest Of Year Requirement 2006/7 Full Year Performance BN Brighton 91.4 +/- 2.4 91.5 93.9 BT Northern Ireland 88.9 +/- 2.6 92.3 92.9 CF Cardiff 90.6 +/- 2.5 91.8 93.8 CM Chelmsford 90.6 +/- 2.4 91.8 94.0 CO Colchester 91.0 +/- 2.6 91.6 94.5 CW Crewe 91.4 +/- 2.4 91.5 95.2 DD Dundee 86.3 +/- 2.9 93.0 92.0 DL Darlington 89.8 +/- 2.6 92.0 94.1 DT Dorchester 90.8 +/- 2.5 91.7 93.4 EH Edinburgh 91.2 +/- 2.6 91.6 93.8 FK Falkirk 90.3 +/- 2.6 91.9 92.9 GU Guildford 91.3 +/- 2.4 91.6 93.9 HU Hull 89.6 +/- 2.7 92.1 95.1 KY Kirkcaldy 85.9 +/- 3.1 93.2 94.1 LS Leeds 91.3 +/- 2.3 91.6 95.0 PH Perth 86.3 +/- 2.8 93.0 92.7 SA Swansea 90.6 +/- 2.6 91.8 94.9 SO Southampton 90.5 +/- 2.7 91.8 93.5 ST Stoke-on-Trent 90.3 +/- 2.6 91.9 92.3 TD Borders 85.9 +/- 3.1 93.2 93.4 6 of the 20 PCAs (DD, EH, FK, KY, PH and TD) were affected by the Unofficial Industrial Action which took place at Edinburgh Mail Centre and Edinburgh Airport on 24 th and 25 th March 2007. Each of these PCAs is served by Edinburgh Mail Centre. The dispute was regarding working practices at the unit. In addition, in Period 1 adverse weather disrupted air network services into and out of Scotland. As can be seen from the actual results for 2006/7 summarised above, all the PCAs except DD and PH achieved or exceeded the level of performance required in the remainder of this year to achieve the full-year Licence target. This both supports the need to take account of the statistical accuracy of a single quarter s results and also provides confidence of their ability to recover without the need for remedial action plans over and above business as usual performance management. The 2 PCAs which need a step change in performance above last year s level have focused action plans 14
Table 8. Licence Condition 5.6 Complaints Report The number of complaints unresolved at the beginning of period Q1 Report - 5.6 (a), 5.6 (b) (i), (iii) The number of complaints received in the period The number of complaints resolved in the period The number of complaints unresolved at the end of period Total Compensation Value Royal Mail Letters Total 21,989 294,060 310,495 19,308 2,710,854 Main Causes: Loss 12,428 117,668 129,853 11,983 1,859,361 Redirection Failure 1,715 35,172 36,467 1,188 71,719 Mis-Delivery 950 27,751 28,308 806 27,273 Delivery Procedures 763 26,577 26,856 625 7,104 Delay 1,084 18,360 18,689 917 122,813 Damage 1,296 12,299 12,817 1,048 215,182 Delivery Frequency 339 4,100 4,179 377 65,972 Redirection Centre Failure 46 4,108 4,105 76 1,432 Part Loss 115 3,868 3,914 120 4,138 Other Complaints 3,253 44,157 45,307 2,168 335,861 Q1 Report - 5.6 (b) (ii) % Calls answered to quality standard aim 80% in 20 seconds % Cases closed to quality standard aim - 100% (inland) in 30 calendar days Royal Mail 69.0% 87.3% 15