Mail orders

Costing elements of the postal public service obligation

In 2007, the Postal Services Commission asked Frontier to analyse the net costs to Royal Mail of several different elements of its “universal service obligation”(USO). Of the features we reviewed, we found that only the requirement for Saturday collections and deliveries imposed a substantial net cost, and even this was no greater than the savings Royal Mail could achieve, in a four-year period, by improving efficiency by 1% a year.