Royal Mail ponders cutting deliveries to 3-days a week, eyeing savings up to $828 million

Now the age-old institution is eyeing a major revamp to cope with dwindling demand.

Ofcom, the U.K. regulator that oversees the mailing company, is proposing the mail company slashes its letter delivery days from six days to three to modernize the “out of date” and “unsustainable” mail service.

The financial savings of this measure could be enormous—as much as £200 million ($255 million) if delivery is reduced to five days and £650 million ($828 million) if it goes to three. 

“Something’s got to give, or the service is going to be too costly,” Ofcom chief executive Melanie Dawes told the BBC. “We’re opening up a debate on this today, we’re not proposing specific answers.”

Other options that Ofcom suggested include tweaks to how long it currently takes for letters to be delivered.

The report cited a consumer survey that found most customers want reliability and are willing to make a trade-off for services taking longer as long as the prices are under control.  

The demand for letter services has seen a decline as parcel services have picked up, thanks to the growth in e-commerce.

This has been true of other countries the world over, made worse by the COVID-19 pandemic.

To keep up with the changing postal landscape, several other European countries have cut down their postal services to fewer days or slower delivery speeds including Belgium, Italy and the Netherlands, Ofcom noted.

But the U.K. has done little to upgrade its ancient system in recent years.

“Reducing letter delivery would allow Royal Mail to redeploy resources to its other services such as parcel delivery,” an Ofcom spokesperson told Fortune, adding that the unit cost…