Royal Mail discounts business post

Royal Mail is to introduce new volume-based discount schemes for business mailers from 2 April. While it’s difficult to get excited about a stamp (franking mark or PPI), the new postal prices mean it’s time for businesses to review their mailing contracts again.

Personal mail, such as letters and birthday cards, make up only 10% of the mail delivered in the UK by Royal Mail. The rest is made up of business mailings to other businesses, and to consumers, and consumer post to businesses. The market for UK deliveries has been open to full competition since 1 January 2006 and Royal Mail is trying hard to retain as large a share of the bulk mailings market as possible – it currently has 96% of the addressed letters market.

Postcomm Chairman Nigel Stapleton said, “Full competition is off to an encouraging start in 2006 with 18 new operators now in the market. Many large mailers, both in the private and public sector, have switched to new operators who they have found to be reliable and sensitive to their specific needs. Everybody has benefited because, in response to competition, Royal Mail has delivered record service levels.”

A Postcomm survey in October found that mail prices had reduced significantly for 20% of businesses as a result of the increased competition in the postal service.

“As Royal Mail’s prices need to more closely reflect the true cost of collecting, sorting and delivering around 80 million items of mail a day to 27 million addresses, we are committed to offering discounts to customers who give us mail that can be sorted by our machines, rather than by hand. These items cost us less to handle so it’s right that we reflect this in the prices we charge those customers,” said Lorna Clarkson, Royal Mail’s Director of Commercial Policy and Pricing.