Royal Mail to carry on fight for zonal pricing (UK)

Royal Mail is seeking a judicial review of Postcomm’s decision to reject plans for the introduction of a retail zonal pricing scheme.

As competition increases in the commercial postal market, Royal Mail proposed zonal pricing to reflect its obligation to deliver anywhere in the UK.

Royal Mail’s ‘zonal pricing’ refers to a system where senders of postal items would be charged variable rates depending on the geographic location of the recipients.

Direct mail and magazine printers have been eagerly watching developments as they could impact on the cost of campaigns

In most cases, the zonal pricing structure will make rates higher for deliveries to rural areas and lower for deliveries to urban areas and business districts.

In a statement, Postcomm said: “Postcomm rejected the application because it put forward a pricing structure that appeared to have a number of discriminatory features and would have been introduced in a way that would lead to unreasonable changes for its customers.”

The changes would affect the pricing structures of bulk mailers using Royal Mail’s Mailsort (120, 700 and 1400), Presstream and Walksort services, while not affecting the pricing for regular stamped mail.

Neither Postcomm nor Royal Mail would comment further, but the regulator said it had not ruled out any future moves towards zonal pricing and was open to alternatives that overcame the problems in the recent application.

Royal Mail already applies a zonal pricing structure to some of its independent agreements, under which it delivers mail the final mile for large customers and other postal operators.