Royal Mail reveals price hikes

Royal Mail is risking the wrath of some brand owners after revealing price rises for most “downstream access” services – which are collected and processed before being handing over for final delivery – to shore up its commitment to the Universal Service.
The plans are likely to raise more than a few eyebrows, as some sections of the DM industry – which accounts for £1bn of the postal operator’s turnover – have long feared they would be paying more to keep the newly privatised firm on track.
Most mailing customers will see price rises of between 0.3% and 1% depending on their plans, while only larger volume clients – just 31 firms – will get discounts. Even then, they will have to provide forecasts up to two years ahead, and mailing items to 86 local geographical districts across the country.
With Royal Mail facing growing competition over the last mile of mail delivery from TNT Post, as well as declining mail volumes, the company claimed the changes are necessary to shore up the Universal Service. They will come into force on March 31 2014.
Downstream access mail accounts for around half of Royal Mail’s delivery volume, and about 70% of all business mail.
The changes will see the introduction of different prices for mail delivered between the four zones – London, Urban, Suburban and Rural – which the company claims will be more reflective of the costs of delivery.
Defending the move, Stephen Agar, Royal Mail managing director for consumer and network access, said: “Our Access customers are responsible for around half of the mail we carry and we want to work with them to improve our planning and the generation of cost savings across our delivery network. The changes we are introducing will ensure Access customers can, where possible, share those benefits with us.”

Royal Mail reveals price hikes

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