Jersey Post increasing postal rates from May 8

Jersey Post is increasing its postal rates to respond to changes in Royal Mail rates, changes to UK tax rules and the continuing decline in mail volumes. The company is raising the price of a local letter delivery from the first and second class rates of 37p and 45p to a unified service rate of 45p.

Deliveries to the UK, other Channel Islands and the Isle of Man increases 5p to 55p, a 10% increase. Rates to Europe will go up 22% to 60p, but rates for international letters actually decrease 7% to 80p.

The price changes, which also affect parcels and other services, go into effect from May 8, 2012.

The postal service on the largest of the Channel Islands said the price change follows on directly from the UK government’s removal of Low Value Consignment Relief for products exported from the Island, which is expected to significantly damage Jersey Post’s business.

It also responds to this month’s “substantial” price increases from the Royal Mail, the post said, and both the ongoing mail volume decline and increasing number of households requiring delivery.

“Little choice”

Jersey Post’s chief executive, Kevin Keen, said his company was “very conscious” that price increases would be unwelcome in the current economic climate.

“Despite our achievement of substantial cost reductions over the past few years, we are now left with little choice but to increase prices in order to be able to maintain service levels,” he said.

“Although the increases are substantial, they will have a limited impact on households due to the already very low spend on postal services which the States of Jersey Statistics Unit has calculated at just over £1 per week, per household.”

The Jersey Post CEO argued that his price increases would still leave rates 25% lower than Royal Mail’s, and also lower than many European countries.

Charities will be able to apply for special rates, Jersey Post said, adding that last year’s discounted Christmas postage stamps would also be available this year.

Cost savings

State-owned Jersey Post is self-funding, and last May recorded a pre-tax profit of just £111,000 on its turnover of £65 million for the 2010 year.

Keen said his company had not increased its postal rates quite as high as it would have been allowed by the regulator, the Channel Islands Competition Regulatory Authority (CICRA). “We have been able to avoid higher increases largely due to the significant cost savings made by the company over the last few years,” he said.

Earlier this month, fellow Channel Island postal operator Guernsey Post announced that its local letter rates will increase to 39p from the beginning of next month, and its UK-bound rates will rise to 53p, for similar reasons.

The Isle of Man also announced increases in local rates to 38p and UK-bound rates to 41p, effective April 30.