Royal Mail get set to introduce Fuel Surcharge

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A new page has appeared on the Royal Mail website with the message “Royal Mail does not currently apply a surcharge to the contract prices for letters or parcels. It is considering applying fuel surcharging to some contract parcels products from April 2013“.

It’s quite normal for many couriers to apply surcharges, in fact there are very few couriers who don’t. The idea is that they can set contract per-parcel rates and then if the cost of fuel goes up, rather then renegotiate all their customer contracts, they can simply hike the fuel surcharge to cover the increase in their costs.

That Royal Mail are considering introducing fuel surcharges will simply bring them into line with other carriers. However it does mean that contract fuel surcharges will mean business tariffs will become more volatile than consumer rates. Royal Mail could potentially hike business rates without increasing the cost of a stamp at the Post Office.

Another strange thing is the timing, currently there’s no plans, according to the Chancellor George Osborne. He has ruled out any hikes before September at the earliest and he’s already cancelled the fuel duty rise that was due in January. Of course fuel prices aren’t purely determined by tax and duty, there’s also the cost of crude oil to take into account.

It would appear more than likely that Royal Mail WILL introduce fuel surcharges, whilst their website says that they’re “considering” applying fuel surcharges they have already added a fuel surcharge column to Online Business Account invoices in preparation.

Will this lose Royal Mail customers? Quite possibly, whilst post and courier charges are generally edging up competition is still as strong as ever. As soon as Royal Mail’s untracked prices start to approach an alternative carriers tracked rates a fuel surcharge could be enough to make the choice simple economics.

Thanks to Terry and Elvis for the screenshots

47 Responses

  1. Oh. Crud. I wondered what that was when I saw it the other day. I live in a KW postcode, although still on the mainland – I suspect I’m going to get hammered on this one.

  2. This added to the rumors of parcel banding is worrying. Last time round we got stung badly on the 100/250g parcel hike, this time we are holding off ordering until March to see what they announce.
    30 days notice of severe price hikes is a bit of a joke, many companies supply chains are longer than 30 days never mind turning over stock to beat the increase.
    Fuel surcharging is the norm elsewhere so this isn’t too much of an issue assuming they make it fair across the board. It’s a wait and see game unfortunately!

  3. My read of this is that it will be a fuel price based surcharge not a Location surcharge.

    ie They could not get away with charging someone in an outlying area more to send me a small packet than it would cost me to send it back assuming we were on the same rates currently.

    Unless of course we had put the outlying area mail into a seperate sack.

    It would be interesting to know what triggers the surcharge as what Royal Mail pay for their fuel will be commercially confidential, so it will be like the fuel prices now going up 10% because of the wholesale price going up but when the wholesale price comes down, the fuel prices do not come down by the equivalent % amount of the rise!!


  4. they can surcharge as much as they like though they need to stay competitive or we will go elsewhere where we can

  5. For a Lot of small businesses that do not need to be vat registered, some of royal Mails prices for business accounts are already higher than using the post office. A friend of mine who isn’t vat registered posts items every day with the local post office. I can’t remember his exact weights he posts but it worked out 20p dearer via oba than using his village post office. I know he uses recorded delivery which is 95p at the post office, but on oba they charge vat on this so that alone costs him £1.14 which is already 19p dearer.

  6. I am already moving my business away from Royal Mail. I hope they go bust one day. Good riddance to them

  7. royal mail need to get into the 21 st Century or they will be only available in history books

  8. The “Universal Service” means Rural and outlying areas such as the Highlands and Islands get a daily postal service. By removing that many parts of the Country(including the Village I live and work in) are likely to enjoy a much poorer service.

    Gary probably lives in an urban area but to those of us in rural areas we need our daily postal service. It is a lifeline to us. So leave the “Universal Service” alone.

  9. Yes I live in an urban area but the universal service has to go. End of!

    Why should a high number of my customers be punished because there are a few who can afford to live in outlying desirable areas?

    And as a bonus think of all the junk mail you and your fellow villagers would no longer receive! 🙂

  10. “Having a daily post means that any items I buy on ebay are not held up in the post……Only the seller has Feedback/DSR’s…..So guess who is going to get the blame…..for it having taken longer to arrive that I feel that it should? The Post Office/Royal Mail or the Seller.”

    So you are saying rural buyers who buy online knowing they receive 2 deliveries each week would not factor this in when scoring ebay feedback?

    I suspect rural buyers have more sense than you give them credit for.

    Besides we all know ebay feedback is an anachronism harking back to the nostalgic days when ebay was a car boot sale. The only people that take it seriously these days are ebay and possibly 1% of sellers who should seriously consider whether the new ebay is for them!

  11. The Universal Service Obligation should have have been abolished a long time ago.
    I am also not aware that PO workers are now part-time social workers either.
    Why should the more profitable urban & surburban areas of the UK continue to subsidise those who have chosen to live in their rural idyll.
    If you don’t like it get on your bike or horse and move to Truro!
    What will most likely happen is that the postal service in many areas will be downgraded to every other day at some point or you will be required to collect your post from the local PO or DO.
    As for DSR’s so what – after all the vast majority of the UK population do not live in rural areas so the issue is actually quite trivial.
    pip pip

  12. Part Time Social Workers. I would guess that across the UK over the years there have been literally thousands of occassions when Posties on both Urban and Rural Routes have seen Old Ladies in trouble and reported them or indeed helped them to their feet or whatever. I would expect that as Rural Posties probably stay on the same route for years that they know their customers better and know or sense that people are in trouble.

    If you do not know this then perhaps its you who are lacking in knowledge rather than me or puddleglums rest who are perhaps exaggerating.

    You suggest that I should leave my Village and move to Truro. Why I am very happy in my Village. Indeed there are suggestions that Villages should be expanded rather than just continue to sprawl Towns and Cities out across more of the Countries Green and Pleasant Land. Certainly in my Village we have land that could be developed for about 65 houses. This would not cause any serious problems indeed we would welcome this development. But adding another say 5,000 houses onto Truro might cause serious problems(and would probably be resisted by the current Truro inhabitants)

    Why should the Rural parts of the UK always get the mucky end of the stick in every decision? We have always had a system in the UK that we are all treated similarly no matter what our postcode.

    I hope that we never have a postal service that makes deliveries other than daily. Remember when the Postal Service first started there were multiple deliveries and collections each day. Today its just daily. It would be a serious reduction in our quality of life if it was reduced to every other day or collections from a central point,

    In the 19th Century it used to be said that you could post a letter to Newcastle in the morning and get a reply in the afternoon. This was possible because of multiple Collections and Deliveries and the fast and efficient distribution of the post across the nation by Rail. If you are right in the 21st Century that you envisage you would be lucky to get a reply in a week.

  13. In the 21st century no one will send letters to newcastle or anywhere else.

    Mail will be parcels and packages only.

  14. Might I suggest that it is unlikely that either of us will be current at the end of the Century. After all in my case as I was born in 1950 I would be considerably older than the person currently listed in the Guinness Book of Records.

    In your case obviously I do not know your date of birth but I would expect that unless Life Expectancy was to rise significantly you will also not be around. However if you are around and I come back to tell you anything I would expect to be as a Ghost. So if I was to return I would guess that it would cause you a significant shock.

  15. The issue here is not whether posties are the advance guard for DC’s ‘big society’ fantasy but who pays for what and why.
    Given that the rural economy is almost insignificant in terms of the national economy why should the more productive and economocally important metropolitan/urban & surburban dwellers be expected to subsidise your cosy life via things like the USO or subsidised broadband or buses?
    If rural dwellers need charity from the rest of us please ask – it may be forthcoming.
    However I object to view that it is an expectation or a ‘right’ that the rest of us should be paying for your services including a very expensive daily postal delivery service.
    If you choose to live in a rural area then don’t expect me to pay for your bucolic lifestyle.
    Otherwise just get and move and join us ‘townies’!
    pip pip

  16. I don’t know how much you know about the reality of life today(indeed if you know anything). However if everybody living in Rural Britain. In Villages and hamlets across the country were to move as you suggest to Urban Britain there would not be homes available for them. In addition I wonder what the nation would do with all the deserted Villages and Hamlets?

    I suspect that many reading your postings would long ago decided that you are a complete ****(Sorry as this is a family site I will not use language that others might on occassion use).

    Basically this is one nation. We live in a small island and we are free to live where we like. In my case I live and work in a small Village(I am also elected to represent that Village and its inhabitants on the local Council). So I shall continue to live here.

    I am not certain if you Urban Dwellers are subsidising us in Rural Britain. The last time I looked Cornwall was in fact a net contributor to the Exchequer rather that a net recipient from the Exchequer.

    As I understand it Urban Dwellers are often complaining about over crowding in Urban Areas. Surely depopulating Rural Areas and moving the Rural Population to Urban areas(subject to being able to find the hundreds of thousands of homes for them) would increase that over crowding?


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