re: Zonal pricing update

[F0zziebear]

Royal Mail challenged over plans for zonal pricing for bulk mail
Matt Whipp , printweek.com, 15 June 2007

Royal Mail's bid to introduce zonal pricing for bulk mailers has come under fire during industry body Postcomm's fourth annual industry forum this week (12 June).

The company's proposal would affect the cost of sending bulk mail depending on which of five zones it is sent to. In some areas, such as within the M25, the charge increase could be as great as 12%.

Around 140 representatives attended the debate on Royal Mail's proposals, which, if approved, could come into effect as early as April next year.

"There were a large number of businesses at the event," a Postcomm spokesperson told printweek.com. "There was very little support being mooted by businesses customers for the RM proposal."

TNT Post's chief executive Nick Wells said: "Zonal pricing is bad for everyone – both consumers and businesses alike. It is complicated, reduces transparency and creates a tremendous amount of uncertainty. No one is asking for it, and it will threaten deliveries to the millions of people who live in rural areas. So why bother? It isn't necessary. In fact, Royal Mail could haemorrhage millions of pounds from the introduction of zonal pricing which will slow down the modernisation of the UK postal service. Everyone will lose as a result of zonal pricing."

The Postcomm spokesperson added that the watchdog Postwatch was "not terribly supportive".

The zones are priced according to population density. Low density zones would see prices hiked 11%, whereas the business district of central London would see a drop of 28%.

The spokesperson told printweek.com that the increase for greater London was "surprising a lot of people".

Royal Mail justifies this anomalous increase because of the congestion charge, increased recruitment and salary costs and other factors.

It insisted that "where strong competition and customer choice is already well established, Postcomm should let the market decide on prices. That means allowing Royal Mail to introduce zonal pricing for bulk business mail - if business customers want it".

Postcomm chief executive Sarah Chambers said: "If customers decide they don't want zonal pricing, they should challenge Royal Mail on why it is proposing this change. Given its statement today that it will introduce zonal pricing only if customers want it, Royal Mail will have to demonstrate that this is the case."

Postcomm will publish a consultation document in July, after which there will be two months for interested parties to raise issues. A final decision will be taken 2 January 2008.

The Postcomm spokesperson questioned whether an April 2008 rollout would then be a feasible date and whether there would be enough time to communicate these changes to bulk mailers.

He added that a final decision would ultimately be down to the arguments from both sides. "We are an evidence-based organisation, we don’t do deals," he told printweek.com.

[F0zziebear]

Here you go. This is the debate about zonal pricing for bulk mail. Royal Mail have cut the country up and said that to deliver bulk mail I will charge you different amounts. This proposal is aimed at rival companies who are looking to only deliver mail in urban areas and not rural areas. The problem Royal Mail has is that they are lumping all bulk mailers together.

HOWEVER!!!! If Royal Mail's competitors want to deliver only the urban mail of their customers, then who is going to deliver the rural mail? If they bring Royal Mail to their knees by removing the bulk of their profitable mail they will suffer as they won't be getting their mailed delivered on behalf of their customers, and if they do get it delivered it won't to the quality or the service standard we have traditonally been used to.

The current internal fight over conditions has been on the cards since Single Daily Delivery if not before. The situation above is more desperate. If Royal Mail lose out the competitors will be delivering mail sooner rather than later and will cripple Royal Mail possibly beyond repair.

The CWU and CMA need to support Royal Mail senior management and help prevent competitors truly going for cherry-picking!

F0zz

[POSTMAN]

OI!! Numnut i've already posted that up!!
Will reply to the other bit later
Now behave yaself

[F0zziebear]

POSTMAN I'm sorry. My servant didn't inform me of this, and was surprised it hadn't been put up before.

feel free to transfer it and close down this thread

Left field F0zz

[POSTMAN]

Seems to me that it will be left down to what the customer wants,and if they don't want this,then that's it.
BUT....and i'm not sure whether i've got this right,with mailings to 'expensive' London be offshot by cheaper mailings to other parts of the UK.
And would that then put our competitors at a disadvantage because we have the network to offer cheaper than them elsewhere.

Some of this is confusing,you're due a seminar on here this Sunday,i may wait till then to try and digest a bit more.