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Royal Mail loses 360-year monopoly on delivering parcels from Post Office branches

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Royal Mail is to lose its 360-year-old monopoly on delivering parcels from Post Office branches, after concerns about poor quality of service persuaded the postal service to sign deals with rivals Evri and DPD in the run-up to Christmas.

The two couriers would be added to the options available at the counter from later this month, the Post Office said, with customers given a choice for the first time.

Industry sources said the decision was the result of increasing dissatisfaction at the Post Office with Royal Mail because of customers complaining about the standard of service.

The two companies were part of the same group until 2012, when the Post Office was split out into a separate business, as part of the privatisation of Royal Mail led by the then business secretary, Vince Cable.

While the Post Office manages the network of 11,500 branches and banking services, Royal Mail is responsible for delivery, where it faces increasing competition from courier companies.

Royal Mail has come under fire for poor performance and is under investigation by the communications regulator Ofcom after missing delivery targets in 2022-23. It was also hit by strikes during the peak trading period in November and December last year, when its delivery woes were exacerbated by poor weather.

The company has previously said that its performance is improving, pointing to the strain on its resources caused by record levels of parcel deliveries during the coronavirus pandemic, combined with staff sickness.

However, the Post Office is understood to have lost patience with Royal Mail after surveying customers, who raised fears that included parcels getting lost or arriving late, particularly at Christmas. In a press release on Tuesday, it said 48% of people who send parcels would like to be able to shop around for another provider.

While Royal Mail’s quality of service has come under scrutiny, the Post Office’s new parcel partners are not immune to criticism themselves. Evri, previously known as Hermes, has been rated the worst parcel delivery firm in polls by the MoneySavingExpert website and Citizens Advice, with customers complaining of poor service.

The Post Office already offers alternatives to Royal Mail online but has never yet done so in branches. The company said it planned to enter partnerships with even more delivery carriers in the future.

Its chief executive, Nick Read, said: “We are fundamentally transforming Post Office by introducing new mails carriers for over-the-counter sales for the first time in our 360-year history.

“This expanded partnership with DPD and Evri shows how we are disrupting the mails market to offer greater choice for customers and more opportunities for postmasters as we build a Post Office fit for the future.”

A Royal Mail spokesperson said: “Royal Mail has a long history of working with the Post Office and offers our services at all Post Office outlets throughout the United Kingdom.

“As customer preferences have evolved we have also opened up a variety of new ways for customers to access our services, including more online postage options through our website and app, 24/7 drop-off at locations like our parcel postboxes and collection from home through services such as Royal Mail Parcel Collect.”

The Post Office said deals with Evri and DPD would also benefit the postmasters who run individual branches because they would bring in more customers.

The company is still trying to mend its relationship with post office operators after the Horizon scandal, when a faulty IT system led to hundreds of them being wrongly accused of fraud, theft and false accounting. Earlier this year, Read said he would return a bonus payment linked to the inquiry into the scandal.

He apologised for “procedural and governance mistakes” that led to the company making the payments contingent on work connected to the inquiry into the miscarriage of justice. The scandal led to some operators being sent to prison, and has been linked to four suicides.

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