Last year's strikes caused widespread disruption

During the last three months of 2003, the percentage of first class mail arriving the next day fell to 84.9% from 91.5% a year ago.

Services were disrupted by strike action which spread across the UK.

But Postwatch said poor industrial relations was not "an acceptable excuse" for missing the targets.

'Regret' at delays

In October last year, postal services suffered major disruption following a wave of unofficial strikes.

BOTTOM 5 POSTCODE AREAS (APRIL-DEC 2003) 1, NN Northamptonshire 73.3% 2, SW London 80.6% 3, SE London 83.9% 4, DA Dartford 84.3% 5, HA Harrow 84.4% Source: Postwatch

The backlog this caused to mail deliveries meant the Royal Mail's performance for first class post was only 90.3% for the nine months to December.

The firm has to reach a target of 92.5% by the end of March.

"Our customers have suffered as a result of the industrial action in some parts of the UK in the autumn and I greatly regret that," said Royal Mail chief executive Adam Crozier.

Management failings

Postal watchdog Postwatch said it was unlikely that the Royal Mail would meet any of the 15 minimum performance targets set out in its licence.

And Postwatch chairman Peter Carr was not impressed by the Royal Mail's excuses.

TOP 5 POSTCODE AREAS (APRIL-DEC 2003) 1, HD Huddersfield 95.1% 2, BD Bradford 94.8% 3, S Sheffield 94.7% 4, LN Lincoln 94.5% 5, ML Motherwell 94.1% Source: Postwatch

"Poor industrial relations are only one reason for Royal Mail failing to meet its targets. It is not, however, an acceptable excuse," he said.

"It is management's job to manage successfully all aspects of their business. Clearly this includes industrial relations."

Mr Carr said that Royal Mail's business customers would now receive up to 5% compensation on their postal bills, an amount he estimated would "add up to many millions".

"These unnecessary losses should incentivise management to redouble its efforts to provide a satisfactory service," Mr Carr said.

"Customers want the service they are paying for - not compensation for failure."

Reform

Adam Crozier said the firm had reformed its transport and distribution networks in January, and had also changed delivery patterns in its local offices.

"This means we won't get services back to normal as quickly as we would normally after last year's disruption," Mr Crozier said.

"We expect this to have some impact on the final quarter's figures. I apologise to our customers if their services don't hit targets while we complete these changes."

The Royal Mail is currently shedding thousands of jobs and undergoing major reforms in an attempt to turn the business round.

But there are signs the reforms are working. Last November the business announced its first profit for five years, unveiling a pre-tax profit of �3m for the six months to September.