UK Royal Mail presses ahead on size-based pricing plans

Royal Mail looks set to press ahead with plans to introduce size-based pricing after asking postal regulator Postcomm to consider the proposals, despite industry pressure to quash the initiative.

The new pricing system will take the size of an item, rather than solely weight, into account, and is to be introduced in April 2005.

The proposals drew heavy criticism from industry bodies when they were first unveiled. Changes have since been made to the original proposals, with Royal Mail taking many of the industry’s concerns on board.

Although the proposals have now been taken to Postcomm, the DMA (UK) still plans to be heavily involved in the process, as many smaller companies would be greatly affected by the implementation of the proposals.

Royal Mail claims there will be no overall change in prices, and that the proposals would not result in a revenue rise for the company.

It claims the size-based system will be simpler, easier and fairer for its customers to use. Yet the direct marketing industry claims it could potentially stifle creativity and hit response rates.

David Robottom, DMA director of development and postal affairs, says: “There is still a long way to go. We are in for the long haul, but we will be heavily involved in the process.”