From Wednesday the 1st of July 2020, if you use Royal Mail International Business Contract to ship to the USA, you will see increased prices for International parcel services and the introduction of a new ‘Rest of World Zone A (USA)’. There are no changes to letter and large letter prices for Royal Mail International Business Contract customers.
You will want to adjust your prices on marketplaces and your website to take account of the new prices and supplements as for some these will be significant price rises. If you purchase postage through a marketplace, you might well expect their prices to rise to take into account the additional expenses by the 1st of July. Bear in mind that you should increase you prices before the 1st of July to take into account sales that may sell in June but ship in July.
Why will Royal Mail International Business Contract customers see increased USA costs?
Royal Mail say that these prices changes are the result of exceptional cost increases outside of their control:
- Last year, the UPU agreed to allow the US to set terminal dues/prices themselves from the 1st of July. This met the US administration’s stated objective – to increase how much they charge other countries for delivery. It averted their threat to leave the global network. It will see a significant increase of over 100% in the the rates Royal Mail pay for last mile delivery in the US from the 1st of July.
Royal Mail say that they will have to pass on these costs and will not profit in doing so.
- Royal Mail have seen 95% less air passenger flights as a result of Covid-191 and are having to use air freight instead. This is considerably more expensive. It has led to a five-fold increase in conveyance costs to the US following the outbreak of Covid-19. As a business, Royal Mail say that they have absorbed these costs to date. But, from the 1st of July, they are going to recover their best estimate of future conveyance costs in this financial year.
Royal Mail say that they are closely monitoring the cost of conveyance and may reduce prices accordingly in future.
Royal Mail International Business Contract Temporary Air Carrier Supplement
In order to manage these increased costs as fairly as possible, Royal Mail have temporarily introduced an Air Carrier Supplement for each country where they have experienced increased costs, which will be charged on the price per kilo. This supplement will be regularly reviewed to reflect changing air carrier costs for the USA and other countries.
Which Royal Mail International Business Contract services are impacted?
Parcel prices are changing for the following Royal Mail International Business Contract services to the USA:
- International Tracked and Tracked & Signed services
- International Standard Mixed Mail
- International Standard Parcels
“At Royal Mail, we fully recognise that these changes are significant. This was a decision we reluctantly took but is necessary in view of the increased costs borne by Royal Mail.
We charge 2% less for customers providing electronic customs data.”
– Royal Mail
It has been mandatory to provide electronic customs data for each item (containing anything other than general correspondence) since the 1st of January 2019. This is a Universal Postal Union (UPU) requirement and one that is increasingly being enforced with tighter controls being applied by countries from 1 January 2021.
Royal Mail charge 2% less for all packages that comply with the new electronic customs data rules.