Postcomm allows UK Royal Mail to price post by size as well as weight

Postcomm has today given Royal Mail the all-clear to charge postage according to the size of a letter or packet as well as its weight.

Royal Mail’s new Pricing in Proportion (PiP) price structure will be the greatest change in postal pricing since the introduction of the Penny Black. It will come into operation, at the earliest, in August 2006. Its introduction will mean some post will cost less to send than it does now but light-weight items that are also large or bulky will cost more.

Today’s announcement follows two years of extensive consultation by Postcomm and reflects substantially revised proposals from Royal Mail. In its most recent consultation, Postcomm proposed to allow Royal Mail to introduce the new charges from next April. After analysis of responses, this has been put back to August next year to allow postal users at least 12 months to prepare.

“This is a major change to the way people pay for their post,” said Nigel Stapleton, chairman of Postcomm. “It will promote the development of a successful and growing postal market by allowing Royal Mail to bring its prices much more closely into line with its costs. This is particularly important given the full liberalisation of the postal market in January.”

The case Royal Mail has made to Postcomm is that light-weight mail that is large or bulky costs more to transport, sort, handle and deliver than regular size items. Up to now the company has been under-charging for some items and over-charging for others. Under PiP some prices will now go down while others go up. Postcomm has agreed to this on the basis that Royal Mail will not make any extra revenue from the revised pricing structure.

Royal Mail is to mount a substantial publicity campaign to explain the changes. Postwatch, the consumer body and Postcomm will be monitoring the implementation closely to safeguard the interest of customers.

Pricing in Proportion will apply to most of Royal Mail’s inland services, including first and second class post. However, because the vast majority of post is flat and weighs less than 60 grams, most people will find the price of posting a letter will be the same. Research indicates that the prices of around 70percent of items posted each day will be unchanged. Of the remaining 30percent, roughly half will cost less and half will cost more.

NOTES
From next year it will cost more to send lightweight but large or bulky mail such as rolls of photographic film, very large greetings cards and video tapes, through Royal Mail, but some heavier items — catalogues and books for example — will cost less. Any price rises must be balanced by reductions elsewhere, to make the price restructuring revenue-neutral overall.

Royal Mail has agreed to mitigate some of the effect of price rises for business customers who spend more than GBP100,000 a year on post and find the changes add 50percent or more to their postage bill.

Pricing in Proportion defines the maximum size of each mail format as follows:

A Letter is a mail item that would fit into an envelope no larger than 165mm x 240mm (approx 6½in x 9½in) and not more than 5mm (approx. 3/16 in) thick. This includes most A5 sized items.

A Large Letter is a mail item that would fit into an envelope no larger than 250mm x 353mm (approx 9¾in x 14 in) and not more than 25 mm (approx. 1 in) thick. This includes most A4 sized items. (For one of Royal Mail’s business products – Response Services – the thickness limit is 50mm).

A Packet is mail that either measures more than 250mm x 353mm, is thicker than 25mm or weighs more than 750g.

Post Offices will have templates so that customers can measure their mail before posting.

Winners

At the moment a stamped first class letter weighing up to 60 grams costs 30p and one up to 100 grams needs a 46p stamp. Under PiP, Royal Mail will extend the first weight limit for letters to 100g. Providing it conforms to the maximum size and thickness limits, a first class 100g letter will need only a 30p stamp. The first-class stamp price of a large letter weighing 750g and less than 25mm thick drops from GBP2.71 to GBP1.23

Losers

A large greetings card weighing less than 60 grams, which at present needs a 30p stamp to send first class, would cost 42p, and first class stamp postage on a 100 gram packet more than 25mm thick would rise from 46p to 94p