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