Postcomm reviews Royal Mail proposals to change its Special Delivery Next Day service

Postcomm, the independent postal services regulator, is seeking views on Royal Mail’s proposal to limit what can be sent through its Special Delivery Next Day service and be covered by its compensation arrangements.

Royal Mail would like to:

exclude valuable items, such as cash and jewellery from the service;
reduce the additional levels of compensation that customers can buy, from a maximum GBP2,500 to the standard GBP500; and
introduce a separate Special Delivery High Value service which would allow customers to post items of value and to claim compensation for lost or damaged high value items.
It argues that it needs to make these changes in order to help ensure its staff are safer when delivering high value items.

At the moment, customers using the Special Delivery Next Day service are able to claim compensation if items of value are lost or damaged. If the changes that Royal Mail wishes to introduce are approved by Postcomm, customers using the standard Special Delivery service will not be able to seek compensation for lost or damaged items which contain items of value.

The Special Delivery High Value service that Royal Mail wishes to introduce would be more expensive than the standard Special Delivery service, but would allow the conveyance of high value items that Royal Mail is proposing to exclude from the standard Special Delivery compensation arrangements.

This table summarises the main changes proposed by Royal Mail:

Product Feature Current Proposed Proposed
Special Delivery Next Day Special Delivery Next Day Special Delivery High Value
Guaranteed next working day delivery By 1pm By 1pm By 3pm
Standard level of compensation for loss or damage GBP500 GBP500 GBP2,500
Additional compensation for loss or damage Up to GBP2,500 N/A N/A
Compensation for loss or damage of valuables Yes No Yes

Royal Mail is obliged to provide an insurable service for high value items as part of the Universal Service, and under the terms of its licence, may only make changes which are less beneficial to customers to the non-price terms and conditions of its regulated products with Postcomm’s approval.

Notes for editors

Among the most affected by Royal Mail’s proposals will be those who send items of value by Special Delivery. These include jewellers, companies who supply foreign exchange, but might also include stamp and coin collectors and others whose activities involve items readily turned into cash that are sent through the post.

Postcomm’s powers to allow proposed product changes extend to the Special Delivery Next Day service which is supplied to customers through Post Offices. Special Delivery Next Day services supplied to large customers of Royal Mail (who have an account and use this to pay for the service) are not covered by Postcomm’s powers.

If the changes are approved, Royal Mail is aiming to implement them in 2007.

Printed versions of todays consultation document, Royal Mail’s proposed changes to the Special Delivery Next Day service (pdf, 234KB), will shortly be available from Postcomm at 6 Hercules Road, London SE1 7DB. Responses are requested by 21 December 2006