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Changes afoot at Royal Mail

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Background

As you'll no doubt have read, Royal Mail were given permission from OfCom (formerlly PostCom) to cease paying compensation for lost or damaged business mail. This was only the first part, however, in Royal Mail's campaign to level the playing field between couriers and the Royal Mail. More widesweeping changes are set for early next month, with a few smaller ones likely to follow shortly after once OfCom give approval. The overall effect will be that letters will remain the only regulated item of post, with the packet and parcel market de-regulated to be priced by market forces.

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How will it affect me?

Compensation for Loss

This ceased in early January for all account based post, and will not be re-introduced. Compensation will now only be paid on services which are comparable to courier alternative - their Special Delivery, Tracked UK services and International Signed For.

Annual Price Increase

As might be expected, April will see Royal Mail's annual price increase which is mostly around the RPI of 5%. Due to the de-regulation though, some prices will be going up much more, nearer to 8% in places.

Removal of Light Packet Services

This is perhaps the largest change that will affect most retailers hardest. Royal Mail claim that light packets are currently priced at a loss, which is why no one else can compete. Since this market will be deregulated, Royal Mail will no longer offer prices for the 0-749g price bracket to account customers. Instead, all light packets will be priced in a single 0-750g bracket. You will still be able to post lighter items at the Post Office for a week or two, however another ruling by OfCom is expected mid-April that will allow Royal Mail to increase prices for packets significatnly at Post Offices, making this work around redundant.

What are James and James Fulfilment doing to help?

I'm glad you asked! We have several new options that will hopefully reduce the burden and offer more flexibility. We'll be adding some new services, such as Royal Mail Tracked. This will offer a semi-secure postal method for items up to 3kg. We're also adding some new courier services which will reduce our courier rates even further on domestic and international items. Exact details will follow shortly.

March 9th, 2012 by Hannah Newman

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