Royal Mail Price Changes for April 2013

Royal Mail have today announced their price changes for both consumers and businesses which come into effect ont the 2nd April. There’s a lot to take in but the headlines are:

Prices and services are changing

You will need to check the rates that will apply to you. Whilst Royal Mail have tried to simplify services with Guaranteed, Tracked and Standard tariffs the reality is a lot of confusion as people try to figure out which tariff is the best one for them.

Compensation

Maximum compensation for First Class or Second Class Signed For items increases from £46 to £50. Compensation for loss or damage of untracked products will be reduced from £46 to £20.

2.5% fuel surcharge for businesses

This applies to Special Delivery Guaranteed and Royal Mail Tracked 24 and 48. Fuel surcharges will not apply to non-contract business and consumer parcel services.

Parcelforce

Whilst in recent years Parcelforce have been a separate business, it would appear they’ve been more closely aligned with Royal Mail and for heavier items Royal Mail intend to push consumers to use Parcelforce services.

Existing business contracts honoured

Royal Mail will honour business customers’ fixed price contracts on Royal Mail Special Delivery and Royal Mail Tracked 24 and 48, for the duration of their contract term, excluding any extensions agreed to the term after 1st March 2013.

Consumer Pricing

Consumer pricing is available as a pdf document and will also apply to postage purchased through eBay Postage. Whilst the price of a 1st class stamp hasn’t changed, most other pricing has.

Consumer 1st and 2nd Class Parcel Prices

Royal Mail Consumer Parcel Prices 2012 2013

Parcels Sizes

Small parcels can measure up to: Length: 45cm Width: 35cm Depth: 8cm Weight limit: 2kg

Medium parcels can measure up to: Length: 61cm Width: 46cm Depth: 46cm Weight limit: 20kg

Large parcels can measure up to: 1.5m length and 3m length and girth combined Weight limit: 30kg Only available on Parcelforce Worldwide services

Exceptions are cubes up to 16x16x16cm and tubes less than 45cm long and 8cm in diameter will also be priced as small parcels.

Roll or cylinder shaped parcels larger than these sizes can be posted as Medium Parcels up to and including 90cm in length and up to and including 104cm (length plus twice the diameter)

1, 2, 3

Whilst Royal Mail launched their 1, 2, 3 website advertising Guarenteed, Tracked and Standard parcels, for consumers the options are Guaranteed, Confirmed (Recorded Delivery) and Standard.

Business (Account) Pricing

Royal Mail Business Contract pricing is available as a pdf document, along with separate documents for Airmail, Airsure and International Signed For.

Pricing for Royal Mail 1st and 2nd Class Account Customers

For 1st and 2nd class options are Letter, Large Letter(4 weight bands), Small Parcel (2 weight bands), Medium Parcel (5 weight bands). There are no discounts for volume or pre-sorting and the services are VAT exempt.
Contract 1st 2nd Class Post

It’s worth noting that I don’t currently see any options to purchase Recorded Delivery Signed For on 1st or 2nd class mail for business customers. I may be wrong, but it would appear this service may only be available for consumers as of April 2013.

Pricing for Royal Mail 24 and 48 Account Customers

Business pricing is changing with just two parcel tariffs for Royal Mail 24 and 48 (Large Letter and Parcel). There’s a limit of 20kg for Royal Mail 24 and 2kg for Royal Mail 48, this will push more parcels onto the 24 hour service.

There is a requirement to send send more than 1,000 parcels and or large letters per year to access these services on account. This is a reduction in required volumes, which will make the service available for more lower volume sellers from April.
Royal Mail Tracked 24 and Tracked 48

International Parcels

Pricing for Airmail, Airsure and International Signed for have also changed. Royal Mail are increasing Business Airmail prices in line with inflation and reducing the number of weight bands for items over 100g from 22 down to 9.

eBay comment

James Miles, Manager, Strategic Shipping Partnerships has been looking through the price changes and said “Keeping consumer letter prices unchanged is good news, although private sellers will need to watch the size of their parcels carefully with the 8cm limit on small parcels.

For business sellers the simplification of services is very much welcomed along with the reduction in the threshold for eligibility. Many Business sellers should now find themselves eligible for a Royal Mail contract and therefore be able to mitigate any impact on their postage costs.

These changes are an important reminder that getting the right portfolio of services to serve your customers is vital, with research showing that over 4 in 10 shoppers have abandoned a purchase due to the delivery date not matching their expectations. We encourage sellers to continue to shop around for the best service for them and their customers, particularly for larger/heavier items and we’ll be playing our part by offering services from a range of couriers, some offering large discounts, in our Label Printing service.”

Alternatives

We’ve had a quick look at the alternatives where Royal Mail is likely to be uncompetitively priced.

eBay Postage Options

If you want to use eBay Postage then Parcelforce and Collect Plus offer a range of 24 hour, 48 hour and 3-5 day deliveries:

ParcelForce 24 – £13.19 inc. VAT flat up to 20kg – (up to 58% off 2013 PF prices)
ParcelForce 48 – £11.99 inc. VAT flat up to 20kg – (up to 56% off 2013 PF prices)
It’s worth noting that Parcelforce prices have not increased only if purchased through eBay

Collect+ (3-5 day tracked service) – from £3.99 inc. VAT

Non – eBay Options

My mobile and inbox have been filling up today with online sellers asking about the price changes. Options like myHermes start at £3.00 and with their Parcelshop drop off offer a 3 day service. Others have been comparing the new Royal Mail rates with courier contract rates which with the right volumes are starting to look very attractive for any parcels around 2kg or more.

We’d love to hear your thoughts on how the price changes will affect your business. Will you be using Royal Mail more, less or about the same. What will be the biggest price change to affect your business, or are you one of those for whom the price changes will benefit?