Further to our letter of 6 March 2025, we wanted to update you on our proposal for the Access General Large Letter (GLL) service after USO Reform.

Background

As we have explained before, including in our response of 2 April 2024 to Ofcom’s January 2024 Call for Input, our provision of parcel services will not be impacted by USO Reform.  We will continue to deliver 1c and 2c parcel services every day, 6 days a week (including Saturday).  We will be taking the same approach with all large letter fulfilment items, including GLLs.

Fulfilment items are handled differently.

You may be aware that we have different automation infrastructure for fulfilment items than we use for printed material such as Business Mail and Advertising Mail, and even though a GLL is large letter format, we process them on the Parcel Sorting Machines (PSM). If they were processed alongside printed material, the throughput could be severely compromised. Similarly, if we put Business Mail Large Letters through the PSM we would not be able to realise the walk sorting capability offered by the large letter machines (T2K). It is important therefore that we do not see a ‘blending’ of the different types of large letter.  

As previously advised, once the USO reform changes come into force we are introducing new ‘1’ class identifiers which customers will be required to present on Access Priority (D+2) mailing items and container labels.   For Business and Advertising Mail large letter format items we will be reliant on the correct labelling of containers (i.e. for the ‘1’ class identifier to be presented on Priority container labels) to ensure we process large letter items correctly for the Priority and Standard service speeds. For GLLs we only require customers to use the existing standard indicia and container labels (i.e. there will be no requirement to include the new ‘1’ identifier). This is because GLLs will be processed through the PSM meaning they will be delivered every day, six days a week.

Access GLLs

Given the above, in respect of our current Standard (D+2) GLL service, our plan continues to be as previously explained, that, assuming Ofcom introduce regulation of a D+3 service, we propose to notify customers of a contractual change such that GLLs become a D+3 service. Notwithstanding this contractual change, we will continue to deliver GLLs as a D+2 service (i.e. Monday to Saturday delivery on the next working day after handover) after the Access Condition changes.

As a regulated Access service, this will mean that the GLL service will continue to benefit from VAT exemption.  The service will better align with the relevant 2c service in Retail, namely RM48 (including RM48 Large Letters) and USO 2c parcels, which will have a 2c indicia on the postage label and will have a contractual requirement to deliver by day 3 from postage, albeit they will all continue to be delivered 6 days a week on a D+2 basis.  Moreover, under the proposed Access Condition, the GLL service will continue to be tied to RM 48 Large Letters for the purposes of USPA6.  We would also point out that the price for this service will not change after the Access Condition changes, and so the current prices which went live on 31 March will continue to apply.

Given the above, we are not proposing to introduce a separate D+2 GLL service. Such a service would effectively be delivered on exactly the same operational basis as the less expensive D+3 service (namely every day, six days a week).  However, it would have to be priced significantly higher, as it would have a 1c indicia on the label, and without a higher price it could encourage the mailing of correspondence items (as well as fulfilment items) on a next day basis as well, and the whole purpose of USO Reform is to optimise the volume of correspondence items requiring next day delivery.  This higher price would also be consistent with the fact that any such service would be tied to Royal Mail retail’s RM 24 large letter service for USPA6 purposes, a point which Ofcom recognises in its draft of the USP Access Condition post USO Reform, included in the Annex to its Consultation Document. We also believe, from customer feedback that a higher priced GLL is unlikely to get traction in the highly competitive fulfilment market.

Proposal

Accordingly, the only change we are proposing as regards the Access GLL service post USO reform is to give customers 70 days’ notice, to contractually change GLLs to become a D+3 service. We are not proposing to make an additional D+2 GLL service available in Access.