Royal Mail suspends bulk mail reversion surcharge until April

Royal Mail is giving its bulk mail customers a five-month breather on meeting mail preparation standards for sealing their envelopes. And, the company has pledged to hand back half the surcharges it has taken from mailers who have had trouble meeting the specifications since the changes were brought in on 17th September.

Royal Mail revised its bulk mail compliance system last month to strengthen the policing of discounts available to mailers presenting mail ready for automated processing.

It said the move supported its heavy investment in new automation equipment designed to improve the efficiency of the mail network.

Surcharges for mail that doesn’t meet processing specifications – known as “reversions” – have been changed to be based on low volumes, medium volumes and high volumes failing specifications, ranging from a GBP 25 charge for low volumes to 0.1p per piece for medium volumes and 1p per piece for high volumes.

The new surcharge system was to be phased in to cover 20% of mail up to the end of October, 50% of mail in November and December and all mail failing specifications from the New Year.

Royal Mail’s envelope sealing specification requires no more than 25mm of the envelope flap to be unsealed for mail in bags, and 35mm for mail above the DL envelope size presented in trays.

Issues

Royal Mail confirmed on Friday that it had become apparent that customers were facing continuing issues with consistently meeting the envelope sealing specification for machine-readable products.

Tim Cable, the Royal Mail product director, said he recognised that as a result customers and mail producers were facing uncertainty on the pricing of their mail.

As a result, he said Royal Mail will stop checking the sealing of envelopes as of this week (from 22nd October), suspending the checks until April 2013.

The company has also decided to hand back 50% of the surcharges demanded of customers failing to meet the new sealing standard between its introduction on 17th September and 19th October.

During the six-month suspension, Cable said Royal Mail would work with customers to resolve their difficulties in meeting the envelope sealing standard.

“I believe this step will give us the opportunity to make things better for the industry as a whole and to continue to offer a highly value service to customers,” he said.

“At the end of this process I want to be in the position where our specification and policy is accepted by customers and partners alike as fair and transparent.”

Proportional

The moratorium on Royal Mail’s reversion surcharges is the second such suspension, after a three-month moratorium this summer prompted by industry concerns.

The Direct Mail Association yesterday welcomed Royal Mail’s suspension of the reversion surcharges until April. The trade association has suggested there are millions of pounds in lost revenue at stake for mailing houses already facing a margin squeeze.

The DMA said yesterday that it was now chairing a working party that will “tackle the issues at hand”.

Mike Lordan, the DMA’s chief of operations, said: “Our goal is to seek improvements to Royal Mail’s reversions framework to ensure that surcharges are transparent, proportional and fully accountable to an independent appeals process.”