Postcomm Would Slash Royal Mail's Bulk Mail Universal Service Obligations

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Royal Mail can vary its charges for all bulk mail services except Mailsort 1400 and Cleanmail starting in April 2006, under new proposals from Postcomm, the independent regulator for the United Kingdom's postal industry.


Postcomm said Royal Mail's universal service obligation, which states it has to charge a uniform rate for delivery to all parts of the UK, should be scrapped for other bulk mail products that target large mail users. They include Mailsort 120, Mailsort 700, Walksort, Packetpost, Flatsort and Presstream.


Bulk mail services are large-scale distributions of letters and catalogs by businesses. They account for about half of Royal Mail's business volume.


Two products would stay within universal service:


· Mailsort 1400 (first and second class), which covers mail of all formats up to 2 kilograms and presorted, according to the locations of the 1,400 delivery offices.


· Cleanmail (first and second class) does not require users to have sorting machines and is the "entry level" bulk mail product most often used by smaller businesses.


A Royal Mail spokesman told the UK's Brand Republic, an online resource for UK advertising and marketing news, that Postcomm had "left the handcuffs on" the company, and it should be allowed to compete with other operators in all bulk mail services and before April.


"The products left as universal services account for about a quarter of the bulk mail market," he added.


If Royal Mail decides not to amend its license as Postcomm proposes, the situation could stay as is, with all bulk mail products except Presstream treated as universal services. Any license change likely would take effect in April.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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