Royal Mail get set to introduce Fuel Surcharge
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
Caroline J says
7:07 am on 24/01/2013
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.
Chris Dawson says
10:02 am on January 24th, 2013
Ouch – It didn’t occur to me that they might simply surcharge outlying areas of the UK :O
Caroline J says
10:32 am on January 24th, 2013
They’ve been looking for an excuse to do it for years
I’m holding fire until the new business prices are released at the beginning of March, but I think this could be a write to my MP moment 
Clarky says
11:15 am on January 24th, 2013
Arent they legally obliged to offer a universal service?
Gerry007 says
8:21 pm on January 24th, 2013
.
Yes, but that does not stop them upping the contract prices charged & reducing discounts, just the prices @ the Post office.
They have maxed-out the prices they can charge Joe Public [just look how their volumes dropped pre Christmas], so now they’ll up our prices to squeeze the max’ out of everyone.
Neil says
12:32 pm on February 4th, 2013
Unfortunately, packets/parcels are not part of the Universal Service Obligation and are also not subject to price regulation in the same way as Letters and Large Letters.
I’ve seen that Wholesale prices are increasing by 35% for Packets (Parcels) up to 750g and you can probably expect to see a similar increase applied to the retail prices when they are announced in March.
Clarky says
11:12 am on 24/01/2013
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!
Lee Pearce says
1:20 pm on 24/01/2013
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!!
Lee
Gerry007 says
5:18 pm on January 24th, 2013
.
If they use more fuel to get to a Location then it will become a Location surcharge.
puddleglums rest says
1:38 pm on 24/01/2013
they can surcharge as much as they like though they need to stay competitive or we will go elsewhere where we can
elvis says
4:10 pm on 24/01/2013
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.
Gerry007 says
5:16 pm on January 24th, 2013
.
If using the BPL codes in OBA, no VAT is charged.
elvis says
2:54 am on January 27th, 2013
Are BPL codes cheaper than standard post office prices?
What’s the BPL code for recorded delivery?
Gerry007 says
1:55 pm on January 27th, 2013
.Elvis,
See section 5 for pricing;
http://www.royalmail.com/sites/default/files/Royal_Mail_Delivery_and_Collection_Services_Price_Guide_April2012.pdf
Recorded BPL codes are the same as ordinary 1st & 2nd class, with the option box at the bottom of the selector page.
Recorded 95p is the same charge as PO, but the 1st/2nd class costs are lower, + it’s calculated on average weights.
elvis says
9:31 pm on January 29th, 2013
thanks Gerry, this is really helpful.
Darren says
10:49 pm on 24/01/2013
I am already moving my business away from Royal Mail. I hope they go bust one day. Good riddance to them
elvis says
2:53 am on January 27th, 2013
Who you moving your business with?
Darren says
9:30 am on January 27th, 2013
UK mainland – couriers ( DPD, Yodel)
UK highlands / Islands – collect+, My Hermes
Mainland EU – DPD / interlink
USA – FedEx
The only countries I require Royal Mail for currently is outside EU, however DPD are coming close with rates
puddle glums rest says
6:49 am on 25/01/2013
royal mail need to get into the 21 st Century or they will be only available in history books
Gary says
8:48 am on January 25th, 2013
Offering a universal service cannot help RM’s aspirations. It only helps competitors. Free RM from this obligation and there is then a level playing field (in the ebay sense).
Chris says
9:09 am on 25/01/2013
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.
Gary says
9:34 am on 25/01/2013
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!
Chris says
9:46 am on January 25th, 2013
You seem to think that only the wealthy can afford to live outside of the M25 and other Urban Areas. This is total rubbish.
Under your scheme of things 95% of the population of the UK to enjoy any sort of life would have to crowd into Urban Areas. The 5% would be the wealthy or those who have to stay outside the Urban Areas as Caretakers for the Countryside.
No the “Universal Service” has to stay. That is not to say that it cannot be changed or modified in minor ways but the “Universal Service” has to stay.
As far as receiving less Junk Mail that would be an advantage but the only way that this is going to happen is if we receive literally NO MAIL at all. This is not just the ending of the “Universal Service” but of any Postal Services at all. This is totally unacceptable.
Gary says
1:40 pm on January 25th, 2013
It is far more expensive to deliver to London than even many rural areas (congestion charge, premium wages, etc) and so the removal of the universal service would enable RM to charge more for packages to London. There are others that surcharge for London (Parcelforce for example charge an extra 60p per package) so why not RM?
Chris says
3:43 pm on January 25th, 2013
I wonder if that is true. In rural areas there is a great deal of green space inhabited by such as Cows and Sheep. So while you are certainly correct about congestion charge, premium wages etc because in rural ares there are many less people per square mile there is a great deal of additional travelling per letter/package delivered. Take my village. Limited population probably about 400. Next village about 3 miles away and between just isolated Farms, Cottages and similar. In regard to Trade Deliveries each village has a handful with a few in the green areas between villages.
In London the Postman can start at the end of the road and a walk of a few yards each time takes him from front door to front door. Even the Trade Deliveries are relatively close together.
So in London I would guess that you are right about congestion charge and premium wages having an effect while in such as Cornwall it is the Dead Mileage between villages and properties probably just about evens itself out but the competitors to Royal Mail are all going for the Trade Collections in Rural Areas because they can travel a short distance and collect thousands, possibly millions of letter from such as Banks and Insurance Companies and of course the Junk Mail that so annoys us all so much.
But at the end of the day we in rural areas will fight very hard to retain our daily deliveries that are so important to us.
Gary says
4:09 pm on January 25th, 2013
In these days of the internet why are daily deliveries so important? Rural living surely is about a slower pace of life. If the option in rural parts was pay more or have 2 deliveries per week I suspect many would opt for the cheaper option.
Chris says
8:01 pm on January 25th, 2013
There you go again. You admit that you live in an Urban area(and no doubt you want your post daily) but you are happy to put forward the idea that because we live in a Rural Area just 2 postal deliveries a week is acceptable.
My postman delivers about 2pm each day and I know that my neighbours look out for him as eagerly as your neighbours in your Urban Area look out for your Postman.
We look out because there might be a letter from a friend or relative. Details and possibly photos of a new baby. Or perhaps a postcard from a friend on holiday. Or a Birthday Card. Now I know that email can cope with many of these. But every day across the nation these as well as letters from the Bank or about the Car Insurance or the Council or whatever drop on millions of mats.
The Postman is still important and we like our mail Daily. Currently second class is 50p First Class is 60p. Do you really think that if Second was say 40p and First 50p it would be acceptable to us in Rural Areas to hear the news from our friends and relations 2 or 3 days later than we would with a Daily Delivery. Bonkers totally Bonkers
Chris says
8:42 am on January 27th, 2013
There is another point about the “Universal Service”. Having a daily post means that any items I buy on ebay are not held up in the post(OK I know that occassionally a mailbag goes astray but not every mailbag goes astray and is held up in the system).
So I buy an item and it is small enough for the Postman to deliver. Who do I blame for it having taken longer to arrive that I feel that it should? The Post Office/Royal Mail or the Seller. Only the seller has Feedback/DSR’s. So guess who is going to get the blame(if not from me certainly from many customers)
Jimbo says
11:04 am on January 25th, 2013
What would be great for business would be a Europe wide service subsidized by the EU.
Clarky says
11:40 am on January 25th, 2013
Hahaha Brussels will have you filling out 14 forms per parcel and then take 6 years to deliver it
Mark says
4:11 pm on January 25th, 2013
No doubt the Italian postal service will win the bid to run the Europe wide service.
Gary says
11:45 am on 27/01/2013
“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!
Chris says
12:38 pm on January 27th, 2013
What total rubbish. Rural Buyers who are buying on ebay for Christmas or Birthday presents are just like buyers anywhere. They want the goods that they have paid for delivered as soon as possible. The fact that it has sat in a Post Office/Royal Mail Warehouse for a few days before finally being delivered is not important to them. They want it asap and if it is not there they will kick who ever they can and that will be the ebay seller.
I also have doubts about the dividing line between Urban and Rural. Obviously many Postmans routes are all Rural or Urban. But many around the edges of Urban areas also include Rural areas. So will the Urban deliveries be daily but if you live on a Farm bounding the edge of Town will you only get your mail twice a week?
Also I suspect that sorting the Urban post from the Rural post is likely to cost about as much as delivering it all daily costs at present.
Remember a lot of our daily post includes such as Special Offers(buy this or that by a certain date and get 50% off or similar). So will those in Rural Areas all miss out on such offers or will the companies concerned have to print two lots of leaflets giving more time to Rural buyers?
Also post includes such as You have missed this payment. Pay by such a date and avoid further action. Again will it mean that Rural Customers will all find themselves in Court or whatever because the post has been held up for several days?
Right from the very beginning of your postings you have had the view that people living in Rural Areas are Second Class and should enjoy a poorer quality of life. While I argue that it does not matter if you are living in a Rural or Urban Area you should both be able to enjoy as much as possible the same quality of life and that includes in regard to the Postal Service.
puddleglums rest says
1:07 pm on January 27th, 2013
have to agree with feedback being not as important, you lived and died by feedback in the early days ,it matters little now,
the constant threats from buyers wittering on about “Appropriate ” feedback just makes us dig our heels in and antagonise them further, as to the Rural thing, were rural and we get a better friendlier more reliable service , we know the local post master ,the posties and their families etc etc
Chris says
11:48 pm on January 27th, 2013
I agree totally. In Rural Areas often the Postman has been doing the same round for years. He knows his customers almost as friends. He looks out for the old lady who might be in poor health and if she’s missing he might just check up on her.
The trouble is that Gary is talking about a Policy of only distributing the Rural Post a couple of times a week. So Puddleglums rest you would suffer as much as I would down in Cornwall.
Feedback might not be as important but I had all sorts of problems in 2012 because a Postal Fraud had a go at me with the DSR’s and ebay kept hitting me with restrictions throughout 2012. I could do without that ever again.
If they are not going to deliver in Rural Areas daily will they still be collecting(from Post Boxes or Rural Post Offices). That would certainly cause problems in the Village Post Office I use(not in my Village – we don’t have a Post Office). Some days I go in and the Clerk is boxed in with sacks of Mail awaiting collection by the Van and he can barely get out. This particular Post Office draws in customers from a wide area(even from Truro several miles away) because Parking is easy and the staff friendly and efficient.
Cambridge_Blue says
12:17 am on 29/01/2013
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
Chris says
12:28 pm on 29/01/2013
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.
board_surfer says
1:41 pm on 29/01/2013
In the 21st century no one will send letters to newcastle or anywhere else.
Mail will be parcels and packages only.
Chris says
1:51 pm on January 29th, 2013
I could have sworn that we were 13 years into the 21st Century and I am still sending and receiving Letters!!!
I suspect that even at the end of the 21st Century there will still be a place for Letters. Not everything will be done by email or similar although I will accept that letters may be limited in numbers by 2099. Although you will have to let me know by Smoke Signals or similar because I will have long been pushing up daisies.
board_surfer says
10:35 am on January 30th, 2013
Which by my rusty calculation means we have 86 years of it left….come back then and tell me I was wrong.
Chris says
1:20 pm on 30/01/2013
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.
Cambridge_Blue says
7:12 pm on 31/01/2013
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
Chris says
9:48 pm on 31/01/2013
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?
Cambridge_Blue says
8:36 pm on February 4th, 2013
Whether you think I am a complete **** or not is of no interest to me whatsoever and I couldn’t care less.
Your arguments such as they are have simply been incoherent and largely based on an emotional reponse.
As I have made clear you can live where you like but do not expect me to subsidise your comfortable rural lifestyle and fantasy about a ‘one nation’ country.
How that equates in your mind to a scorched earth policy to depopulate the bucolic hamlets you love so much says rather more about you than me.
As it happens there is plenty of land for building on the edges of our towns and cities once we sort out the nimbys and bananas.
I live in a town and I do not feel overcrowded in the least as it happens.
pip pip
Gary says
4:10 pm on 04/02/2013
Forget the universal service obigation. Rural are going to pay 60% more than urban from April. See for yourself:-
http://www.royalmailwholesale.com/files/6913/5877/2476/RMW_Access%20Prices%2020132.pdf
This will make ebay life very interesting (not)!
puddleglums rest says
6:13 pm on February 4th, 2013
not the whole story by any means as the quoted link is for wholesale mail users that have a much reduced rate compared to the normal ebay seller
Gary says
6:50 pm on February 4th, 2013
So for the “normal” ebay seller the increase/difference is going to be much higher than 60%?
The local post office is doomed! There will be wholesale closure as business will plummet.