Big savings from Spring by re-mailing UK items from Europe
I have been advised that several large mailers (though not yet publishers) have moved their mailings to Europe to take advantage of postal savings afforded by a discount offered by Spring on Royal Mail rates. The rumour is based on the theory that Spring operates just like a consolidator – Spring is an agent and is given a discount (in this case on Mailsort and Presstream mailings) some of which is retained as profit and the balance passed onto the customer to provide a preferential rate.
In practice a UK mailing taken to Europe and posted back to the UK is, in essence, a re-mail operation. “ABC” re-mail is where country A (the UK) mails wrapped or enclosed items or ships printed material to country B (say Germany) who then mails it to country C (say France) and this is relatively common practice both in Europe and the Rest of the World.
“ABA,” however, is where country A (the UK) mails wrapped or enclosed items or ships printed material to country B (say Germany) who then mails it back to country A (the UK) and this is illegal.
This means that any material printed and shipped, wrapped or enclosed from the UK cannot be transferred to another European (or Rest of the World) country and then mailed back to the UK.
European mailers have always been able to access the domestic service by contacting Royal Mail representatives based in European countries to use the presstream and mailsort contract services but the only potential savings for a UK mailer would be either where the European mailing houses were charging significantly less than their UK counterparts (and the UK mailing industry is very price competitive) or — more likely — where the cost of printing is significantly cheaper.
The rumours are based on mailers printing and wrapping their material in Europe not to benefit from reduced enclosing, wrapping or printing costs but to save significant amounts of postage. If true, although mailers would welcome the savings the implications for the mailing industry and especially the print industry would be really damaging.
Royal Mail have moved quickly to scotch these rumours
Ruth Barker, Corporate PR Manager, International Services, Royal Mail explains the relationship between Spring and Royal Mail.
“Spring is a business in which Royal Mail Group holds a minority shareholding. However, it operates as an entirely independent company. It is active in the cross-border mail market across Europe, North America and the Pacific Rim.
Spring offers its customers global mailing solutions which encompass printing, packaging and posting. Its ability to do this means it can sometimes offer its customers a more cost-effective overall mailing package, through reducing costs related to certain elements e.g. by offering access to cheaper off-shore printing solutions.
Within the UK Spring and Royal Mail are competitors in the outbound international mail market. Outside the UK, Spring is the sole sales agent for overseas customers wishing to access Royal Mail’s domestic services. Spring manages any overseas based accounts on behalf of Royal Mail. They also undertake a range of additional functions, such as billing, collecting revenue, supply of consumables (bags etc.) and marketing our products in international markets. For this, Spring is paid a commission.
How does the invoicing system work? Are the prices Spring charges hidden from Royal Mall?
When it comes to invoicing for services Spring issues a Royal Mail invoice to the customer on our behalf, and in turn we invoice Spring for payment. We can therefore confirm that the fees invoiced to the customer are the same as those charged to our UK customers, or competitors, for accessing the same services.
Can Spring discount or offer special rates? There are no special rates for Spring nor for the customers they deal with as agent for Royal Mail – they are required to pay the same price to access our services as our own UK customers and other competitors who ask us to deliver mail on their behalf. Spring is not permitted to discount the services it offers when acting as agent for Royal Mail (for ABB mail to the UK i.e. services such as Presstream), but may discount any other additional services it provides in its own right e.g. line haul.
It would seem that these rumours may have stemmed from the commission Royal Mail is paying Spring for invoicing Mailsort and Presstream postings.
This development has not been well received by all mailing houses and consolidators. Said one major operator “We would not want Spring to invoice our continental or US customers who are mailing to the UK as Spring is a direct competitor of ours on international mail.”
