Royal Mail Price Changes for April 2013

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Royal Mail have today announced their price changes for both consumers and businesses which come into effect ont the 2nd April. There’s a lot to take in but the headlines are:

Prices and services are changing

You will need to check the rates that will apply to you. Whilst Royal Mail have tried to simplify services with Guaranteed, Tracked and Standard tariffs the reality is a lot of confusion as people try to figure out which tariff is the best one for them.

Compensation

Maximum compensation for First Class or Second Class Signed For items increases from £46 to £50. Compensation for loss or damage of untracked products will be reduced from £46 to £20.

2.5% fuel surcharge for businesses

This applies to Special Delivery Guaranteed and Royal Mail Tracked 24 and 48. Fuel surcharges will not apply to non-contract business and consumer parcel services.

Parcelforce

Whilst in recent years Parcelforce have been a separate business, it would appear they’ve been more closely aligned with Royal Mail and for heavier items Royal Mail intend to push consumers to use Parcelforce services.

Existing business contracts honoured

Royal Mail will honour business customers’ fixed price contracts on Royal Mail Special Delivery and Royal Mail Tracked 24 and 48, for the duration of their contract term, excluding any extensions agreed to the term after 1st March 2013.

Consumer Pricing

Consumer pricing is available as a pdf document and will also apply to postage purchased through eBay Postage. Whilst the price of a 1st class stamp hasn’t changed, most other pricing has.

Consumer 1st and 2nd Class Parcel Prices

Royal Mail Consumer Parcel Prices 2012 2013

Parcels Sizes

Small parcels can measure up to: Length: 45cm Width: 35cm Depth: 8cm Weight limit: 2kg

Medium parcels can measure up to: Length: 61cm Width: 46cm Depth: 46cm Weight limit: 20kg

Large parcels can measure up to: 1.5m length and 3m length and girth combined Weight limit: 30kg Only available on Parcelforce Worldwide services

Exceptions are cubes up to 16x16x16cm and tubes less than 45cm long and 8cm in diameter will also be priced as small parcels.

Roll or cylinder shaped parcels larger than these sizes can be posted as Medium Parcels up to and including 90cm in length and up to and including 104cm (length plus twice the diameter)

1, 2, 3

Whilst Royal Mail launched their 1, 2, 3 website advertising Guarenteed, Tracked and Standard parcels, for consumers the options are Guaranteed, Confirmed (Recorded Delivery) and Standard.

Business (Account) Pricing

Royal Mail Business Contract pricing is available as a pdf document, along with separate documents for Airmail, Airsure and International Signed For.

Pricing for Royal Mail 1st and 2nd Class Account Customers

For 1st and 2nd class options are Letter, Large Letter(4 weight bands), Small Parcel (2 weight bands), Medium Parcel (5 weight bands). There are no discounts for volume or pre-sorting and the services are VAT exempt.
Contract 1st 2nd Class Post

It’s worth noting that I don’t currently see any options to purchase Recorded Delivery Signed For on 1st or 2nd class mail for business customers. I may be wrong, but it would appear this service may only be available for consumers as of April 2013.

Pricing for Royal Mail 24 and 48 Account Customers

Business pricing is changing with just two parcel tariffs for Royal Mail 24 and 48 (Large Letter and Parcel). There’s a limit of 20kg for Royal Mail 24 and 2kg for Royal Mail 48, this will push more parcels onto the 24 hour service.

There is a requirement to send send more than 1,000 parcels and or large letters per year to access these services on account. This is a reduction in required volumes, which will make the service available for more lower volume sellers from April.
Royal Mail Tracked 24 and Tracked 48

International Parcels

Pricing for Airmail, Airsure and International Signed for have also changed. Royal Mail are increasing Business Airmail prices in line with inflation and reducing the number of weight bands for items over 100g from 22 down to 9.

eBay comment

James Miles, Manager, Strategic Shipping Partnerships has been looking through the price changes and said “Keeping consumer letter prices unchanged is good news, although private sellers will need to watch the size of their parcels carefully with the 8cm limit on small parcels.

For business sellers the simplification of services is very much welcomed along with the reduction in the threshold for eligibility. Many Business sellers should now find themselves eligible for a Royal Mail contract and therefore be able to mitigate any impact on their postage costs.

These changes are an important reminder that getting the right portfolio of services to serve your customers is vital, with research showing that over 4 in 10 shoppers have abandoned a purchase due to the delivery date not matching their expectations. We encourage sellers to continue to shop around for the best service for them and their customers, particularly for larger/heavier items and we’ll be playing our part by offering services from a range of couriers, some offering large discounts, in our Label Printing service.”

Alternatives

We’ve had a quick look at the alternatives where Royal Mail is likely to be uncompetitively priced.

eBay Postage Options

If you want to use eBay Postage then Parcelforce and Collect Plus offer a range of 24 hour, 48 hour and 3-5 day deliveries:

ParcelForce 24 – £13.19 inc. VAT flat up to 20kg – (up to 58% off 2013 PF prices)
ParcelForce 48 – £11.99 inc. VAT flat up to 20kg – (up to 56% off 2013 PF prices)
It’s worth noting that Parcelforce prices have not increased only if purchased through eBay

Collect+ (3-5 day tracked service) – from £3.99 inc. VAT

Non – eBay Options

My mobile and inbox have been filling up today with online sellers asking about the price changes. Options like myHermes start at £3.00 and with their Parcelshop drop off offer a 3 day service. Others have been comparing the new Royal Mail rates with courier contract rates which with the right volumes are starting to look very attractive for any parcels around 2kg or more.

We’d love to hear your thoughts on how the price changes will affect your business. Will you be using Royal Mail more, less or about the same. What will be the biggest price change to affect your business, or are you one of those for whom the price changes will benefit?

147 Responses

  1. They still have the daft thing that a small parcel under 170g is cheaper to post to Europe than next door…

  2. Oh Dear.
    RE RECORDED DELIVERY.

    I have just spoke to the nice man at the RM Business centre and he has told me recorded will NOT be available to business customers on contract.
    Only frankers and consumers will be able to use recorded.

    He said that Rm are pushing businesses to Tracked service.

    Good luck everyone.

  3. Do Royal Mail expect to get any business where packages are over 1kg or even if the packages are medium size any weight?

    They are unlikely to get mine.

    Anything over 80mm deep and you are doomed if you list on ebay and you rely on Royal Mail!

    The UK competiters are today rubbing their hands.

    And as for the airmail banding and prices if you are just over the band limit that is a big hike in price so from here on in it is extremely important to get the shipment weight right when calculating shipping costs for ebay sales else you will loose out big time.

  4. This is easy to understand Chris. It is nice to see royail mail tap into increasing courier market. They must have done their homework to introduce changes in the pricing with small & medium parcels.

    It’s always helpful when Tamebay explains the changes.

  5. The account customer royal mail tracked prices actually don’t look too bad relative to the competition and if the limit has been reduced to 1000 parcels and/or large letters per year then this may be an option. The issue for me is that a high proportion of my gear goes overseas and is this included in the 1000 or not?

  6. I use PacketPost and I just spoke to Royal Mail to find out what was happening, the chap had no idea, told me I would be written to, but said very little was changing – “just branding”. Could be in for a bumpy ride!

  7. The prices you’ve listed for Tracked 24 and Tracked 48 above are not the prices for the Tracked service. They’re the replacements for 1st class packets and 2nd class packets respectively for account customers on Packet post daily rate. Tracked is something like £4.50 +vat and you have to buy a thermal printer from RM @ £200. So it’s more cost effective for us to use out courier than Royal Mail.

  8. Selling low value items on ebay just will not be viable. Even with the current £2.70 postage charge for anything over 25mm my postage charges are often close to or more than the item price.By increasing it to £3 and restricting size to 8cms thick will make matters even worse.Rural and small town Post Offices will be closing in their hundreds through loss of Ebay business which keeps them going at present.

  9. The good news is the price rises are not as earth shatteringly steep as in 2012 but if you do a lot of medium sized parcels there may be price concerns.

    If the prices shown above for tracked 24 and 48 are incorrect and they don’t include overseas in the 1000 then the account customer royal mail tracked service won’t be of any interest unless I decide to put a bit more effort in (which I am not going to!)

  10. Do we just work out the average weight For 24/48 service, just like packet post?

  11. What with making it illegal to post out certain types of batteries and other similar products ,and with postal costs going up , will we see customers going back to local shops as more online businesses wonder whether the low margins are worth the effort.

  12. Thanks to Chris for explaining the changes, You did a much better job that RM did! Even the Royal Mail staff I spoke to this morning were confused.

    When I first looked at the new rates & terms this morning I incorrectly thought that we would have to send all our postal tubes out as medium parcels. That would have been “game over” for my business. I do feel for those that do not send out enough parcels to qualify for an account though.

    On our business account we are looking at a 10% increase on last year. Up from £1.63 to £1.80 (net of VAT, excluding fuel surcharge). I would not mind so much if the service had improved but if anything it has got worse since last years massive increases.

  13. Give me a shout here at Codestorm Fulfilment. We have secured rates for the next 12 months and we can do your fulfilment. Always happy to talk/advise anyone on their options.

  14. Another day, where Royal Mail have pushed me deeper into depression!

    OBA 2nd class large letter upto 100g has an 18% increase from 50p to 58p.

    Then there’s the 2.5% fuel surcharge. So 60p will be the new total. 20% increase in total then. Last year it rose by 30%.

  15. The way we understand it is Daily Packet Rate (1st Class) is changing its name to Royal Mail 24 (Not to be confused with Royal Mail Tracked 24) and where last years price increase introduced a 750g minimum charge for packets at £2.19 and the next band being £2.56 for 1000g the new minimum charge for packets will 1000g at £2.39

    So anything less than 750g will cost a little more and anything 750g->1000g will be a little cheaper.

    All other weight charges above 1000g remain unchanged.

  16. Ummm, what’s the difference between “1st and 2nd Class Account Customers” and “24 and 48 Account Customers”.

    Why is a 2nd class large letter for “1st and 2nd Class Account Customers” 58p, yet it is 56p for “24 and 48 Account Customers”.

    What is the difference between these accounts? I currently have an OBA packetpost account so which one am I?

  17. Any more info on Recorded Signed For?
    We currently use BPL Code as not VAT Reg’d.

    Good website, nice information info.

  18. what is very obvious ,is that Royal mail have spent lots of money on web sites and leaflets etc etc etc and no one has a clue! what is really happening ,and the implementation is only a month away,
    every one is confused to what we should be doing ,and how they should be doing it , Royal mail more so than anyone, its a total joke, they must be costing theirself millions ,running around in circles

  19. Why would a business come up with so many changes at once to make things dificult for its customers. All this changes could be applied trough time slowly one step at a time. Now i i am confused as hell. Not sure which Prices i need to follow and there is no clear guidance. Looks like we will all find out with trial and error:(

  20. Anyone noticed that if a package weighs in at 2.1kg the minimum RM price is now £12.92. That is going to kill off a lot of ebay sellers and could spell doom for many ebay catagories.

    And what about the combined shipping thing. It is actually going to be more expensive in future to combine shipping for many items!

  21. What is the penalty if you under achieve on the royal mail 24/48 1000 package target?

    For many who are borderline it may pay to ditch overseas sales and focus on UK only if this is what is needed to exceed 1000 packages.

    But then if you need recorded to satisfy seller protection it falls down again.

  22. This is a real nightmare…have RM OBA not VAT regd so use the BPL code,sell on e bay and send some fragile items in small boxes ( appx 21 x10 x 10cms )(cost 2.05 2nd and 2.50 1st,do use recorded sometimes for clothng etc..i do send over 1000 parcels/large letters per yr..this stupid 8cms rule..really fed up now:(

  23. Thanks for the concise interpretation of the new rates. You have however missed some small print which may prove crucial. I am referring to the note on the business RM24 and RM48 prices. The note says

    “Prices in this table exclude VAT, which is charged at the standard rate, add-ons, additional fees and surcharges where applicable.
    These prices may be reviewed for individual customers to take into account average item size, collection location and destination distribution”

    So on the one hand they are not distinguishing between “small” and “medium” parcels, but I bet that they will use this and say that your “mix” of parcels is 90% medium (say) and hike your individual price up.

  24. I also noticed that Richard. It is worrying. I note the word “may”.

    They might just be covering themselves. Lets hope so.

  25. Hi
    Please can someone help. I am confused lol

    If posting 900mm tubes in the UK will they be classed as small parcels or medium parcels.

    I had assumed small parcels from something I read but can’t find where I read it, but have just read on another forum that they will be classed as medium and will cost £5.65 for up to 1kg – that would kill me off lol. £3 for small parcels without signature would be OK, but not £5.65!!!

    I don’t have an account with RM yet either, not sure how to go about getting one as I am just starting and volumes are lowish. Does having an account mean much discount on pricing?

    Cheers in advance for any help
    Phil

  26. Thanks Nick

    So if I am sending 1000 per annum I can use RM 24 or 48 – if you don’t mind me asking what would a 890mm tube cost for say RM24/RM48 as a ‘parcel’ rather than a small or medium parcel 🙂

    I have only just really started out but will easily do 1000 items per annum – if I speak to them about an account how do I prove the volumes, do you know what I do to get the cheaper prices?

    Thanks a lot for your time Nick, I really appreciate it

    Phil

  27. Just wondering if anyone knows if the 1000 lines per service for Tracked and Standard can be combined. We should hit the Standard easily but we don’t (currently) send 1000 tracked items each year.
    We are looking into stocking some high volume lines if it would help reach the targets if the two products can’t be combined.

  28. if I were royal mail I would have one of my whizz kids monitor sites such as this , and interact with the customers at the sharp end , or at least take note of the concerns, but they stick their head in the sand , because they think they have customer service???????

  29. While change is always a challenge, I do think it’s sensible for RM to push heavy goods towards Parcelforce. The online world would be a better place if all carriers played just to their strengths. James Miles makes a good point when he says “getting the right portfolio of services to serve your customers is vital”, and I would urge everyone to review theirs.

  30. RM need to look to how they operate a service not just how to charge for it, for example recorded signed for is really not worth a carrot , its neither tracked or treat any different than regular mail , until it reaches point of delivery, in effect its a tax on paranoia. and lack of honesty

  31. I’ve been saying Royal Mail should have a pink / red on the eBay Powerseller forums. They are by far the largest single company used by eBay sellers and I feel quite strongly they should give us access to one of their (educated and informed) staff members.

  32. Royal Mail state “And we’ll also arrange a free collection if you spend more than £15,000 per annum across all of our services.”

    If you don’t spend £15000 per annum what is the implication?

    Do you have to pay extra for collection or can you drop off at local post office to avoid this?

  33. Royal Mail say this so answered my own question:-

    “Do I still get a free collection with Royal Mail Tracked 24 and 48?

    Yes, you will receive a free collection if you meet the 1,000 volume entry level for Royal Mail Tracked 24 and 48. For all other services, if you spend £15,000 per annum per site across all Royal Mail products in any combination you will receive a collection free of charge.”

    For the standard 24/48 it seems that you have to pay for collection if you don’t meet the £15k threshold. How much?

    I assume you can still drop off at a post office?

  34. Right here goes. Hopefully someone can help.

    I am vat registered and I post well over 1000 items. I post roughly 40,000 large letters per year.

    My mail is mainly large letters, half of which are in the upto 100g category and the other half are in the upto 250g category. I currently use large letter 2nd class mail using a CRL code in OBA.

    So to sumarise, I use…

    Large Letter >100g CRL code which is currently 50p.

    and

    Large Letter >250g CRL code which currently 74p.

    Now if I continue to use the CRL code in April for up to 100g, will I be paying the 58p(1st and 2nd Class Account Customers) rate or the 56p rate (24 and 48 Account Customers)?

  35. Hi,
    So could someone confirm for me, what happens with the current packetpost system? Are the royal mail getting rid of it?

  36. Went to my local PO thus morning for a few bits (this is also central Manchester’s main Post Office). Spoke to 2 staff members neither if which knew about the changes. No leaflets available. Gonna be interesting…

  37. I currently use a franking machine for my post. I send around 3500 items per year with Royal Mail At a rough guess 5% of those are export orders. All UK items are sent 2nd class. 50% of my packages fall into the 2nd class large letter bands. The remaining 45% are in the upto 750grm packet rate. Luckily I will be able to keep most of those under the 80mm thickness so not as bad as it could have been.
    Anything over 1kg I send with collect+
    I spend around £650 per month on the franking machine. I drop the post at my local post office daily rather than have the collections.
    On this basis is this most likely the best deal I can get or do I need to be talking to RM about other possible options.
    Thank you
    Craig

  38. .
    Collect+ and Hermes,
    Will be rubbing their Hands in glee with the increase in business they will be getting.

  39. If you use the standard 24/48 service and drop off at the post office can you queue up and pay the extra for an orange recorded stamp on selected packages?

    Don’t see why this can’t be done.

  40. Reading the service guidelines this paragraph below on page 18 makes the drop off/collection thing and 1000 minimum very unclear. It seems that the minimum has been reduced to 1000 packages but if you don’t spend £15000 you have to pay £900 a year for a collection or alternatively drop of at an agreed local mail centre. You cannot drop off at a post office:-

    “Parcels are either collected by us or can be delivered into our agreed local
    Mail Centre or regional Distribution Centre. Parcels cannot be delivered into
    a Delivery Office or Post Office®.”

  41. “2.5% fuel surcharge for businesses

    This applies to Special Delivery Guaranteed and Royal Mail Tracked 24 and 48.”

    So does the 2.5% surcharge apply to standard Royal Mail 24/48 as well?

  42. If you do 1500 packages a year (for example) it is going to cost 62p per package to have these collected over and beyond the postal tarriff (£930 / 1500) Unless you deliver to a local depot. Not being able to deliver to a post office suddenly makes this 24/48 option far less viable for many (most?) senders of 1000 packages.

    And then you have the premium for signed for delivery for some 24/48 packages which appears to be more than the post office charge over and beyond the standard tariff. So another downside issue to consider when doing the sums.

  43. Are EBAY taking all these hidden fees and surcharges into account before they and buyers start being critical of high shipping charges?

  44. So for RM 48 customers not VAT registered who do 1500 packages a year you are looking at a total of £2.78 for a parcel weight of up to 1kg all things considered.

    Suddenly the £1.80 does not sound so good does it!

    Only if you do a lot of packages over 80mm thick is it attractive. If you don’t then quite honestly forget it!

  45. Royal Mail need to change their terms so that smaller contract customers posting up to say 2500 packages a year can drop off to a post office to make it viable.

  46. Just taken a look at the Royal Mail “Our Services Guide” where it states a size exemption on a small parcel ~ the exemption states that a parcel of 16 cm x 16 cm 16cm can be sent as a small parcel, as can a cylinder of 45 cm x 8 cm.

    A bit of a help, but still Royal Mail has now lost most of my custom because my courier contract with Interlink Express (for UK mainland addresses) is cheaper than Royal Mail for a Medium or Large parcel with a guaranteed next day delivery, and most of my items will fall within the Medium sized parcel category even when taking the 16 cm x 16 cm x 16 cm exemption into account.

    The changes will cause a few more issues with buyers located in the Highlands and Islands of the UK, as these will have to be priced using Royal Mail as they are a lot more expensive if sent by my courier.

    The end result is simple: 50% of my customers will now have to pay at least £2.00 more to receive their item then they did before, and it is my courier company who will benefit the most.

  47. https://royalmail123.com/infocentre_guaranteedppi.html

    PPI Artwork.

    We have use the standard 1st PPI label for around 5 years.
    We print it onto our label and can use for Airsure, Specials and everything else EXCL 2nd class.

    With all these new looking PPI labels as per link above, will we have to use the SD one for specials and the standard 1st for 1st large letters. Will there be another to use for Airsure and Int Signed for.

    ???

  48. I wonder how this 16cm cube thing works. Is that something UNDER those dimensions, or does it have to be a cube that size even if whatever else is in the box is fresh air? If so, I can forsee many sales of 16cm3 single-wall boxes!

    What if the dimension of my jiffy bag is under those, but greater than the 8cm small parcel limit. The chap at the post office counter is going to have a right time sorting this out!

    This is going to make ‘free’ (included in the price) shipping so much more difficult – particularly when people order multiple items. Whereas before we could estimate it all on weight, now we have to take into account the total size too. A nightmare!

  49. The era of combined shipping surcharges is upon us. Will ebay be updating their system to permit this?

  50. Hmm, our jiffy bags are 200mm wide externally. And the next size down is 170mm. How convenient! I’m sure RM must have worked long and hard to figure out a way to maximise their profits in this new change.

    The items I sell are 450g. So if I sell 1 or two – i’m ok. If I sell three, i’m suddenly in for 3 pounds more in shipping costs. Lovely!

  51. Royal Mail is a joke already,these increases just make it a bigger one. When the lose a parcel they don’t even refund what they charges you to send it in the first place.
    Like ebay they are a monopoly providing a second rate service at first rate prices.The only post service that I know of which is worse is the Italian version who lose parcels so often that they must be based in the Bermuda triangle,some of their deliveries take so long that the parcel has grown whiskers on the journey.

  52. Strangley enough we just received one of those online survey thingys from royal mail , about the royal mail account team,

    if they take any notice of these surveys there will be a few people looking for a job

  53. .
    Sadly, when RM made all 0-750gram packets one price last April, I could see a disaster happening.
    I mean, £2.05p OBA 2nd class, for any size up to 750grams was quite silly, now they have realised their mistake & done the opposite & priced themselves practically out of the market.

    This will effect many traders on ebay, with other costs rising simply because of these new rates.

    Take an example, we buy our Padded envelopes on ebay & up to now a box of say 100 envelopes measuring about 45x35x35 cost around £7-9, all in 1st class post.
    From April that same box will fall into the Large Packet category, hence we will see a whopping great price increase in Mailing supply costs.
    TIME TO STOCK UP…

  54. Interesting development today. We had a meeting scheduled with TNT Post this afternoon to discuss their offering – they came to us so didn’t think it would do any harm to hear what they had to say with all the upcoming Royal Mail changes.

    They phoned half an hour ago to cancel. Apparently they have received their new prices from Royal Mail and are now unable to compete! Something tells me that this is no accident and the system that Royal Mail have come up is deliberately structured to try and force these 3rd party competitors out of the marketplace.

  55. The small to medium limits is quite the jump, that 8cm cut off means my main items will jump from £2.20 to £5.20 postage. Making it no longer worth selling and I won’t be able to send some of the smaller items in one package if the customer orders several.

  56. Some bright spark has spotted the exception limit at the bottom of the leaflet, there is a parcel exception of 16x16x16cm, there are some dimensions also for tubes. This means that a parcel of around these dimensions or slightly smaller still qualifies. This may help a few people.

  57. For those wondering about the arbitrary 8cm cut off on small to medium parcels, we suddenly had a brainwave.
    Go measure your nearest standard front door letterbox. Chances are it’s 8cm.
    Some bright spark has worked out the extra cost of handling parcels when they can’t be put through the door if noone is home.
    For us, with an impending annual increase of 45% as a result of these changes (on an annual bill of £10k) it’s finally forced me to address getting a business account and stop spending a couple of hours nattering down at the local post office each week. Shame they’ll lose the business though….

  58. 8cm representing a standard letterbox. That is certainly reasonable. However round here many front doors no longer have letterboxes of any size. Instead about half the properties seem to have those “tin” box Letter Postboxes screwed to the wall. The trouble with them is that they come in a range of sizes from very small ones where it is an effort to put anything larger than a postcard in them right up to quite large ones. And their openings range is size.

  59. These new rates are going to hit me hard on many items I sell. I sell many items that are more than 8cm deep and more than 16cm long but under 750g which currently cost £2.20 to post second class and now will cost £5.20. The items I sell, customers are never going to pay £5.20 in postage.

  60. I sell a lot of items on eBay. A lot of customers are okay with postage but the type of items I send are likely to go up drastically. I have looked elsewhere but either the companies don’t drop items direct to the customers or they have different charges for how far you’re sending, whereas at least I know with Royal Mail I can be sending it 50 miles down the road or the other end of the country and it’ll stay the same, just go up if you’re sending it overseas.

    I expect most customers will just have to take the postage into consideration when bidding, and adjust their maximum bids accordingly. Looks like I’ll be losing a lot of potential profit.

  61. I just spoke to RM and they said they are really busy with the business accounts right now with everyone opening new accounts (not suprisingly…), so many people including myself will have to wait a few weeks. It’s a shame they didn’t finalise the requirement earlier to allow people to open accounts earlier with the 1,000 parcel requirement.

    Makes me sad thinking non business individals having to pay £5.20 to send a present.

  62. Can’t work out why a 2kg small parcel is more than double the price of a 1kg small parcel. The size limit is no different. For a medium parcel the difference is around 50%.

    Could Tamebay please ask RM to comment?

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