Postage price rises could affect direct marketing industry
Apr 20 2001
As the UK postal industry undergoes wide-ranging changes this year, a potential increase in a wide range of postage rates by the Royal Mail could financially burden the direct marketing industry even further.
The Royal Mail has applied to the new postal industry regulator, Postcomm, to increase First Class and Second Class postage by a penny, under the provisions of the recent new licence granted to Consignia, its holding company (formerly the Post Office). If agreed to, basic weight First Class postage will rise from 27p to 28p and basic weight Second Class postage will rise from 19p to 20p, from 1 October 2001. (Prices for higher weight 'step' mail will increase an average of 2.5% the higher the mail's weight goes up the price scale).
The knock-on effect is that business customers who do mass mail-outs may find that, under further proposals, business contract prices increase in line with the changes to basic First Class and Second Class postage. At Mailsort, the specialist direct mailing service, items weighing up to 60gm will go up by 1p, and items weighing between 61p and 300 gms will cost an average 3.6% more to send. No change is yet envisaged in Mailsort discount business. Moreover, from 2 July, businesses which send international airmail to European destinations may witness their contract prices with the Royal Mail rise by an average of 2.9%, while Standard Public Tariff Parcel services and Special Delivery services rates could rise by an average 3.5%.
James Eadie, at Consignia's press office, is quick to point out, however, that Consignia's licence limits increases in the prices of these services to the Retail Price Index.
Business customers such as periodical publishers, which use the more specialised Presstream service for the volume mailing of magazines and newsletters, have been assured on the same point. Periodical Publishing Association spokesperson Nicola Rowe commented: "the specialist [Royal Mail] services such as Presstream and Mailsort, which periodical publishers use for their volume mailings, would be where an impact would be felt. However, as with any business, an increase in normal mail, even if it is just a penny, will still be felt."
David Rowbottom, Director of Development and Postal Affairs at the Direct Marketing Association stressed that the mooted changes are, at the moment, only proposals. He admitted that if they go through, the price increases "would have an impact," and that the DMA, which will be involved in the discussions all the way through, "will do its level best to avoid them." He added that reaching a conclusion by October looks pretty unlikely.
Those who would like to keep abreast of the Royal Mail's current postal rates should view their website at www.royalmail.com or phone the Royal Mail Customer Service Centre for Business Users on 08457-950950. Those who may have queries on the progress of the proposals should contact The Consumer Council for Postal Services (Postwatch). Their website is www.postwatch.co.uk or phone their Complaints Handling Line on 08456-013265.
With thanks to Lloyds TSB Success4Business. For more news and information visit www.success4business.com .
(20/4/01)