Royal Mail plans new business products

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Two new products as well as enhancements to existing services aimed at business customers and large-volume mailers in Britain will debut April 2, according to Royal Mail.

The enhancements are part of the changes to postage prices that take effect next year as a result of the four-year price control set by postal regulator Postcomm in March 2006.

"Now that the UK mail market is open to full competition, it is essential that Royal Mail tailors its products more closely to its customers' needs," said Lorna Clarkson, Royal Mail director of commercial policy and pricing. "We have developed these new products to appeal to government, financial services and medium-sized business customers to make communication with their customers easier, flexible and competitively priced."

Last year 18 new operators entered the postal market, Postcomm said, attracting many large mailers in the private and public sector.

One of the new products is Automated Standard Tariff Large Letter, which offers discounts of 6 percent to 9 percent to business customers who send at least 250 large letter-sized items that can be machine sorted.

Another new product, Cleanmail Advance, offers easier access to discounts for customers sending more than 1,000 items with correct, machine-readable addresses.

Business mail (business-to-business, business-to-consumer and consumer-to-business) makes up about 90 percent of Royal Mail's daily mailbag.

Royal Mail also is enhancing volume-related discounts for some of its Mailsort business mail services. Mailsort lets large-volume mailers sort their mailings and ensure that at least 90 percent of their addresses have the correct postcode, saving up to 30 percent of their costs.

More volume-related thresholds that attract a discount are planned, as are lower minimums to let smaller mailers qualify for a discount.

Prices will continue to decrease for heavier items, which will support the growth of the online retail market, Royal Mail said.

"As Royal Mail's prices need to more closely reflect the true cost of collecting, sorting and delivering around 80 million items of mail a day to 27 million addresses, we are committed to offering discounts to customers who give us mail that can be sorted by our machines rather than by hand," Ms. Clarkson said. "These items cost us less to handle, so it's right that we reflect this in the prices we charge those customers."

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