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SMEs “confused” about Royal Mail rate changes, claims poll

Tuesday, April 2nd, 2013

Small businesses in the UK are “confused” about the various changes to Royal Mail postal rates, which came into force today.

That’s according to Pitney Bowes, the world’s largest mailroom equipment supplier, which is advising them to make use of franking machines to mitigate price increases.

Royal Mail has left its retail stamp prices the same for the 2013 financial year, but business service rates are changing.

Metered mail rates will rise 3p for First Class standard letters, to 47p per item, and up 2p for Second Class standard letters to 33p per item. For Large Letters, metered mail rates go up 5p per item, to 71p for First Class and 58p for Second Class.

Regulator Ofcom said last month that the rate changes would remain “affordable” according to its research.

Changes are also being made to the range of Royal Mail parcel services, with new volumetric pricing being introduced for small and medium parcels that had previously been charged only by weight.

Business parcel services have been relaunched under a simplified range, with services now in three categories – Guaranteed, Tracked and Standard.

A new 2.5% fuel surcharge is also being introduced by Royal Mail, as of today, for contract parcel products. The company said the move would bring it in line with other parcel delivery companies.

“We have kept this surcharge considerably lower than other delivery companies,” Royal Mail insisted in a message to customers, confirming that fuel surcharges will not apply to non-contract business parcels or consumer parcel services.

“Confused”

Pitney Bowes, which has its UK headquarters in Hatfield, said today that it has surveyed 548 small businesses in the UK last month, finding that 63% of small businesses were “confused” and do not fully understand all of the changes.

The US company said its poll suggested that 42% of small businesses would be changing the format of their mail in light of the changes.

Even though Royal Mail’s retail prices are staying the same for letters, while metered mail rates have increased, Pitney Bowes said switching to franking machines was still cheaper. Nevertheless, it said its survey suggested only a fraction of businesses currently intend to switch.

“Many of our customers have had to completely redesign their products”

Colin Forrest, head of marketing for Pitney Bowes in the UK, said: “Despite the financial incentives associated with franking, only 10% of businesses that aren’t already using franking machines will be acquiring one as a result of these changes. We urge businesses to do their research and consider the options.”

Rival mailroom equipment firm Neopost had similar advice to British businesses.

The French company said franking machine users would achieve savings of 34% for letters and 21% for large letters, with savings of up to 23.5% for large batches of mail (500 to 25,000 letters in a mailing).

“Royal Mail is maintaining a significant difference between stamp prices and the cost of a frank,” the company advised regarding the 2nd April rate changes. “Franking is an economical option for businesses sending as few as six letters a day.”

For parcels, Neopost said the Royal Mail changes would mean using a franking machine to send a small parcel would make it 35p cheaper, 85p cheaper for a medium parcel.

Boxes

Packaging manufacturer Zetland Boxes told Post&Parcel that many of its customers, particularly eBay sellers, had contacted it regarding the parcel service changes.

Tom Senier of Zetland Boxes said despite Ofcom’s verdict that the changes are affordable, they would have a “massive impact” on small Internet retailers that rely on Royal Mail to ship goods to customers.

“Many of our customers have had to completely redesign their products to comply with the new parcel rates,” said Senier.

Zetland Boxes, a small cardboard box manufacturer based in York, has designed three new postage boxes that Senier said would be useful to Internet merchants affected by the Royal Mail changes.

“A large number of Internet retailers in the UK are having trouble finding postage boxes that comply with the new rates,” said Senier.

Source: Post&Parcel/Pitney Bowes/Neopost

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Pitney Bowes provides technology solutions for small, mid-size and large firms that help them connect with customers to build loyalty and grow revenue. Although traditionally known for providing quality business communications products, particularly franking machines, these products only represent a small proportion of the products and services Pitney Bowes offers to its customers.

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