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Royal Mail International Business Contract USA price increases

By Chris Dawson June 1, 2020 - 11:38 am

From Wednesday the 1st of July 2020, if you use Royal Mail International Business Contract to ship to the USA, you will see increased prices for International parcel services and the introduction of a new ‘Rest of World Zone A (USA)’. There are no changes to letter and large letter prices for Royal Mail International Business Contract customers.

You will want to adjust your prices on marketplaces and your website to take account of the new prices and supplements as for some these will be significant price rises. If you purchase postage through a marketplace, you might well expect their prices to rise to take into account the additional expenses by the 1st of July. Bear in mind that you should increase you prices before the 1st of July to take into account sales that may sell in June but ship in July.

Why will Royal Mail International Business Contract customers see increased USA costs?

Royal Mail say that these prices changes are the result of exceptional cost increases outside of their control:

  • Last year, the UPU agreed to allow the US to set terminal dues/prices themselves from the 1st of July. This met the US administration’s stated objective – to increase how much they charge other countries for delivery. It averted their threat to leave the global network. It will see a significant increase of over 100% in the the rates Royal Mail pay for last mile delivery in the US from the 1st of July.

    Royal Mail say that they will have to pass on these costs and will not profit in doing so.

  • Royal Mail have seen 95% less air passenger flights as a result of Covid-191 and are having to use air freight instead. This is considerably more expensive. It has led to a five-fold increase in conveyance costs to the US following the outbreak of Covid-19. As a business, Royal Mail say that they have absorbed these costs to date. But, from the 1st of July, they are going to recover their best estimate of future conveyance costs in this financial year.

    Royal Mail say that they are closely monitoring the cost of conveyance and may reduce prices accordingly in future.

Royal Mail International Business Contract Temporary Air Carrier Supplement

In order to manage these increased costs as fairly as possible, Royal Mail have temporarily introduced an Air Carrier Supplement for each country where they have experienced increased costs, which will be charged on the price per kilo. This supplement will be regularly reviewed to reflect changing air carrier costs for the USA and other countries.

To view the latest rates check out ‘Temporary Air Carrier Supplement’ on royalmail.com/prices2020, but currently appears set to be £4.46 per kilo.

Which Royal Mail International Business Contract services are impacted?

Parcel prices are changing for the following Royal Mail International Business Contract services to the USA:

  • International Tracked and Tracked & Signed services
  • International Standard Mixed Mail
  • International Standard Parcels

“At Royal Mail, we fully recognise that these changes are significant. This was a decision we reluctantly took but is necessary in view of the increased costs borne by Royal Mail.

We charge 2% less for customers providing electronic customs data.”
– Royal Mail

It has been mandatory to provide electronic customs data for each item (containing anything other than general correspondence) since the 1st of January 2019. This is a Universal Postal Union (UPU) requirement and one that is increasingly being enforced with tighter controls being applied by countries from 1 January 2021.

Royal Mail charge 2% less for all packages that comply with the new electronic customs data rules.

  • Paul Middleton
    4 months ago

    “There are no changes to letter and large letter prices for Royal Mail International Business Contract customers.”

    No changes to prices, no. However, you’ll no longer be able to send commercial products via large letter.

    This effectively means that an item that would have been posted as a large letter now has to go as a parcel and so the price rise for what used to large letters is around 50-60%.

    • JoeB
      4 months ago

      Paul – “you’ll no longer be able to send commercial products via large letter”

      Have you got a source for this because I can’t see this in print?

    • Paul Middleton
      4 months ago

      Our Royal Mail account manager. She called to clarify on Monday.

    • Paul Middleton
      4 months ago

      I tried to reply yesterday but it appears it didn’t pass moderation. My Royal Mail account manager called to clarify.

      She has also sent me an email this morning:

      – no changes
      Zone A USA
      Zone B ROW

      “For the USA – Please note that due to the new rules, large letters format will not be able to be used for sending commercial goods, therefore you would have to send them as parcels. (large letters for the USA must only include documents, brochures or magazines)”

    • Paul Middleton
      4 months ago

      Sorry, I didn’t post in full:

      Hi Paul

      Apologies for the confusion but I just wanted to confirm below.

      There will be a temporary Air carrier supplement due to Covid-19, from 8th June 2020, see below link.

      https://www.royalmail.com/sites/royalmail.com/files/2020-05/temporary-air-carrier-supplement-pricing-29-may-2020.pdf

      From the 1st of July there will be 3 zones for International.

      EU – no changes
      Zone A USA
      Zone B ROW

      For the USA – Please note that due to the new rules, large letters format will not be able to be used for sending commercial goods, therefore you would have to send them as parcels. (large letters for the USA must only include documents, brochures or magazines)

    • JoeB
      4 months ago

      Thanks Paul but that link doesn’t even work. I think she’s mistaken, otherwise why wouldn’t it state this clearly on the price increase page?

    • JoeB
      4 months ago

      Also that quote mentions Zone A and Zone B, but the PDF shows US in a new zone 3. I think she’s quoting something for a different product than what most of use.

  • ifellow
    4 months ago

    We can blame China for this, Sorry its just the truth. The more they make it harder for external factors to mess up their domestic market, the better for them. Well done TRUMP. Hang your head in SHAME BORIS JOHNSON and HMRC.

  • Toby
    4 months ago

    We jumped ship a long time ago & use FedEx Priority to USA, DPD Classic within Europe & DHL Deutsche Post Global Business Mail service for everything else .

  • Brian Jakeman
    4 months ago

    “Zone A USA”
    USA is Zone 3

  • DT
    4 months ago

    What’s the score then if I sell “documents, brochures or magazines”? Do they have to be sent as parcels is they’re “commercial”. Surely brochures and magazines are always “commercial”, even if they’re sent free of charge as they’re still presumably promoting a business?

  • Binnie
    3 months ago

    I have tried to phone Royal Mail but in a big queue so gave up.
    I have tried on twitter to get an answer, they point me back to the phone number and a link.
    I can’t see where it says what can go in a large letter.
    I send small items to US sometimes, fashion jewellery, alrge letter size.
    Does that mean it has to go as a small parcel?

    • Stephen Wright
      3 months ago

      Yes, the USA now requires all goods to be sent in as parcel – large letter is now for papers only.

      We sell t-shirts and hoodies into the USA and the increases will probably finish it 🙁

    • JoeB
      3 months ago

      @Stephen Wright

      This again? As far as I can see this is a rumour that’s perpetuated on online forums with no actual official statement from RM.

      If you can provide evidence that this is the case, I’d love to see it.

  • 3 months ago

    If anyone is suffering with the RM increases, I can help support this with our USA service via Landmark Global. We do letters/flats/parcels and offer an alternative delivery solution into the US which is competitive against Royal Mail. Happy to help. You can reach me on LinkedIn – https://landmarkglobal.com/en_GB/ – or email – ihornby@landmarkglobal.com (hope this comment is OK and doesn’t come under the ‘jerk’ rules guys :D)

    • JoeB
      3 months ago

      I’m always wary of these kind of posts, with not even a hint of prices.

      Interesting Trustpilot score of 81% of 1 star reviews.

      I think I’ll pass.

  • 3 months ago

    i would love clarity too. My RM account manager told me that US were not accepting goods via large letter, but can find nothing written on their website to support it. Supplement shipping chart is https://www.royalmail.com/sites/royalmail.com/files/2020-06/temporary-air-carrier-supplement-pricing-4-june-2020.pdf

    prices from 1st July are
    https://www.royalmail.com/sites/royalmail.com/files/2020-05/royal-mail-our-prices-valid-from-1-july-2020.pdf

    but I can’t see anything saying I have to change what LL is providing it fits . However I am tired and not quite focussing. If I find anything else I will update it here later.

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