Postcomm de-regulation of Royal Mail continues
Comment by Andrew Starkey
Postcomm, the postal regulator has just announced its final decision to de-regulate large elements of the UK postal market in order to give Royal Mail more commercial freedom. Importantly much of this centres on the packets and light weight parcel market. Postcomm has made this decision at the same time as agreeing that Royal Mail can change its pricing to raise an additional £100 million this year, on top of that already announced in January. As a result of these decisions Royal Mail Wholesale has announced its new ‘bulk mail’ prices to take effect from 9th May 2011 which will also form the basis for the prices offered to e-Retailers by Royal Mail Retail and the various down-stream access operators.
For packets weighing up to 1 kilo, Royal Mail is able to increase its prices by an average of 12% but the prices issued by its Wholesale division suggest that for lightweight packets (100 – 200 grams) the increases will be 20% - 25%. For heavier weights over 1 kilo, regulation will be partially or fully removed so Royal Mail will be able to offer any prices without restriction and the indications here are that prices will fall by up to 20% (at 2 kilos). Royal Mail’s Retail prices are to be confirmed in the next few weeks but this represents a significant shift in the market and any retailer sending packets and light weight parcels is sure to be affected.
Looking ahead the prospect of external commercial investment in Royal Mail and the separation from Post Office counters, (all as proposed under the new Postal Services Bill) will result in a very different market environment for companies involved in sending goods within and from the UK and all would be advised to pay close attention to these important developments.
Andrew Starkey runs Spiral4… an independent consultancy specialising is strategic advice for all companies involved in e-Retail logistics. For more information contact andrew@spiral4solutions.co.uk or go to www.spiral4solutions.co.uk