Royal Mail seek to increase price of bulk mail

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Royal Mail MX09FPA 8370127Royal Mail is asking the postal regulator for permission to increase prices on bulk mail. It wants to raise an extra £100 million a year, by increasing the price of bulk mail.

RM says that it loses on average 2½p for each of the 6.4 million pieces of mail it delivers each year on behalf of other carriers. Companies affected by the increase would include banks and utility companies who send out thousands of pieces of mail each day, but also smaller businesses who rely on catalogues for their sales. (Bulk mail is defined as anyone who sends out 4,000 or more pieces of mail a day.)

Moya Greene, Royal Mail’s chief executive, said “What we are asking for is the chance once-and-for-all to charge a fair price to other companies who use our network to carry mail and to end what is, in effect, the very substantial built-in subsidy which our rivals have enjoyed for years.”

But Stephen Alambritis from the Federation for Small Businesses said: “Small businesses will be very, very disappointed that a great British institution like Royal Mail has picked on small firms to help rescue it from trouble. These are difficult times for everyone, and putting up prices just isn’t fair.”

If approved, the price rise will come into effect in April 2011. It will not affect the price of 1st or 2nd class stamps.

Creative Commons License photo credit: didbygraham

Disclosure: Royal Mail advertise with TameBay

10 Responses

  1. How can you consider a business that sends over 4’000 pieces of mail a day ‘small’

  2. But Stephen Alambritis from the Federation for Small Businesses said: “Small businesses will be very, very disappointed

    this guy thinks 4000 pieces of mail a day is a small business?! I don’t do that in 6 months – wonder what my business is considered!!

  3. Over the years we poor mortals who send out mail via the Post Office have seen our stamps price rising fairly regularly. I can accept that large bulk users get a discount but why should we mere mortals subsidise the big users-I support the idea of the Post Office getting a fair price from such as the Banks for the post that they send out. In fact in view of the fact that the Banks are included perhaps the price rise should be more than the Post Office is asking for.

  4. yet another reason too privatise
    why should a public co, not charge a fair and reasonable price especially to Banks,
    because its the old boys act and they all piddle in the same pot

  5. I do agree that small should not subsidize BIG.

    However….

    Is it not inefficiencies, lack of automation, poor productivity and lack of investment to blame for this loss.

    Why should the customer, BIG or small, suffer for this?

    This gives me a sense that we are all paying too much for our post!

    And that Royal Mail claims it need these rises to pay for investment when actually the money is spent in other ways. And the regulator falls for this argument every time!

  6. I use Dispatch Express, originally it was a godsend. Saved time and money and then Royal Mail has just increased my Tracked Packet rate from £2.63 to £4.07 because the last three months were quieter than usual.

    Most of my items are under 300g so they were making money off me compared to me using 1st class but I was getting a trackable service.

    Now I have to pay more through my busiest period, I’ve called them and they say the increase is to pay for my daily collection. I already pay £500 per year for that. Now I’ll be paying £1.4k per 1000 packages.

    Originally the rates were calculated over 12 months, now its every quarter.

    Royal mail support big business’s and screw the smaller guys. I was told “It costs us more to serve small companies that it does larges companies who send thousands a day”

    Thing is, in January after my busiest quarter, the rates should drop again until March!.

    Anyone else use Tracked in the same boat?

  7. It may cost more to service a smaller customer than a large customer based upon cost per item or whatever. But there are far more small customers than large. Surely the Post Office has to accept that without the small customers there is no Post Office. Indeed thinking about acorns and Oak Trees without the small customers there is no next generation of large customers because some of the small will grow to be the large. But doesn’t the “Official” mind always think in terms of kicking the small while helping the large perhaps this goes some way to explaining the current national financial situation?

  8. Perhaps if Royal Mail hadn’t made things overly complicated that when posting large items you more or less have to go into the Post Office then this would free up time and resources elsewhere….

  9. ukmail, dhlpost, tntpost, etc should pay the extra for the ‘last mile’, then it might be fairer…

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