Royal Mail is planning to introduce a new next-day service for high value goods and also wants tostart “zonal pricing” for large-scale bulk mail customers, according to Postcomm, the British
postal services regulator. The latter is seeking views on the proposed changes.Postcomm said that Royal Mail would like to change its existing Special Delivery Next Dayservice in 2007 by excluding valuable items, such as cash and jewellery, and reducing maximumcompensation options. Instead, it would introduce a new Special Delivery High Value service whichwould allow customers to post items of value and to claim compensation for lost or damaged highvalue items.
At the moment, customers using the Special Delivery Next Day service are able to claimcompensation if items of value are lost or damaged. If the changes that Royal Mail wishes tointroduce are approved by Postcomm, customers using the standard Special Delivery service will notbe able to seek compensation for lost or damaged items which contain items of value. The SpecialDelivery High Value service that Royal Mail wishes to introduce would be more expensive than thestandard Special Delivery service, but would allow the conveyance of high value items that RoyalMail is proposing to exclude from the standard Special Delivery compensation arrangements.
Royal Mail is obliged to provide an insurable service for high value items as part of theUniversal Service, Postcomm noted. Under the terms of its licence, it may only make changes whichare less beneficial to customers to the non-price terms and conditions of its regulated productswith Postcomm’s approval.
Separately, Postcomm is also seeking views on the issues that it should take into accountwhen it assesses “zonal pricing” proposals by Royal Mail to charge large mailers different ratesdepending on where in the UK their mail is delivered. Royal Mail made an application toPostcomm in July which proposes to introduce zonal pricing to certain bulk mail products used bythe largest mailers, such as banks, utilities, advertisers, charities and government. At presentRoyal Mail charges these large mailers the same “one price goes anywhere” rate.
Royal Mail says that introducing zonal pricing for some bulk mail products would help bringits prices more closely into line with its costs. Royal Mail wants to be able to charge less thanat present for areas where it is cheaper to deliver and charge more for areas where it is morecostly to deliver. Such changes cannot be implemented without Postcomm’s prior approval.
Royal Mail’s application does not affect any other postal products, including the“one-price-goes-anywhere” stamp available to the public – a core part of the universal postalservice commitment – or those business mail services that are also included in the universalservice (Cleanmail – first and second class – and Mailsort 1400 – first and second class). Most ofRoyal Mail’s business tariffs are currently the same, regardless of delivery location. Royal Mailalready applies zonal pricing to some of its “access” agreements, under which it delivers mail “thefinal mile” for large customers and other postal operators.
