Royal Mail Plans Size-Based Pricing in August '06

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Royal Mail named Aug. 21, 2006, as the day its Pricing in Proportion scheme takes effect.


Postcomm, the independent regulator for postal services in Britain, gave Royal Mail the all-clear last month to charge postage based on the size of a letter or package as well as its weight. Postcomm told Royal Mail that it could introduce Pricing in Proportion no earlier than Aug. 17, 2006, in order to let postal users prepare for the changes.


The new price structure will apply to most of Royal Mail's inland services, including first and second-class post. However, because the vast majority of mail is flat and weighs less than 60 grams, most people will find the price of mailing a letter to be the same, Postcomm said.


Postcomm's changes will let Royal Mail charge more for light but large mail such as very large greetings cards, rolls of photographic film and videotapes. But some heavier items, such as catalogs and books, would cost less. Any price increases need to be balanced by reductions elsewhere to make the restructuring revenue-neutral.


Letters and packages are now priced solely by weight, but Royal Mail said it costs more to sort, handle and deliver large envelopes and packages. This means light but bulky items are priced below cost, whereas heavy items are generally overpriced. Royal Mail wanted to change its prices to reflect its costs more accurately.


Royal Mail said that it selected the date following feedback from customers. The company also committed to run a publicity campaign explaining the changes.


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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