Tag: Royal Mail

Royal Mail is using the new wireless tracking technology, radio frequency identification (RFID), to try to improve its lamentable record for safe delivery of post.

Last year, more than 14m letters were lost or damaged and 7 percent of mail was not delivered on time, making it increasingly difficult for the Royal Mail to sell itself as a service for businesses to use. Royal Mail plans to try to identify the “black holes” into which lost post disappears and also discover the whereabouts of the bottlenecks that clog up the system.

Until the arrival of low cost RFID chips, there has been no cost-effective technology that would allow the Royal Mail to track postage flow. But RFID uses a microchip with a unique number tag that can be scanned to identify unique items.

Selected envelopes are now being identified with RFID tags and put through the system so that they can be scanned by an RFID reader when they reach their destination to record an exact arrival time. This is far cheaper than using global position (GPS) tags, which are monitored by satellite.

Smaller businesses think the changes to the postal system being introduced on 21 August will lead to an increase in costs. That’s the result of a survey of nearly 200 hundred firms carried out by the Forum of Private Business (FPB).

Currently, the cost of sending mail is based purely on the weight of the item being sent. When Pricing in Proportion (PIP) is introduced, the size, length and thickness of the item will all be taken into account when considering the cost of postage. The FPB, which represents around 25,000 small and medium-sized UK businesses, has surveyed firms to discover what they think of the changes. The FPB’s Research Analyst Andy Mowlah says the results show that businesses believe the changes won’t reduce their costs.

“It’s rather ironic that this new system is designed in part to cut costs yet 60% of respondents thought it would actually increase them.”

Twenty five per cent of respondents said they thought there would be no change in their costs while only 14% said costs would decrease.

Over a quarter of respondents said the cost of their post would increase by 15% or more. Mr Mowlah said the administrative cost of the new system would also be a burden: “60% of respondents thought the new system would mean extra time spent in administration, while 50% didn’t realise they may have to purchase a new franking machine,” he said.

An overhaul in postal pricing is set to spark a sea-change in the way mailing campaigns are planned.

‘Pricing in proportion’ (PIP) has been touted as the biggest change to the postal service since the debut of the adhesive postage stamp in 1840. Its introduction has sparked debate across the direct marketing industry, with many worried the changes will have dramatic implications for campaign costs as well as the execution of mailings themselves.

The Royal Mail’s new rules particularly affect charity, business-to-business and FMCG direct marketers who send out samples in bulky packs. The effects of the changes range from the relatively trivial – folding A4 letters to get them into the cheapest letter format – to more fundamental considerations concerning creativity.

The Direct Marketing Association (DMA) has encouraged agencies to carry out impact assessments on their existing work over the past year, and some have expressed concern about the results.