Royal Mail seeks to reduce business mail charges.

[NEWS]

Royal Mail has called for an overhaul of postal regulation to allow it to cut business mail charges and increase competitiveness.
The call follows the loss of large contracts with BT and the Department for Work and Pensions. The postal operator claims regulation is forcing business mail profits to subsidise the delivery of stamped letters, and instead wants to raise opportunities to reduce rates for business customers.

BT is among the former Royal Mail customers that recently ended its contract, instead signing a £90 million, three-year deal with delivery group TNT Post in a bid to save up to £3 million a year. (Web news, 17 January 2007)

Also last month The Department for Work and Pensions ended a contract in an attempt to cut £5 million a year from its £69 million annual postal bill. It has agreed a £12 million deal with private company UK Mail.

Adam Crozier, Royal Mail's chief executive, said: "The regulatory framework is no longer fit for today's environment where Royal Mail is competing against a growing number of rivals on a wide variety of mail services."

A spokesman for Royal Mail told supplymanagement.com that although the proposed changes would not guarantee that Royal Mail won back lost business customers, they would provide a "level playing field and allow Royal Mail the freedom to fight for every last letter".

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[NEWS]

Royal Mail price proposals ''could boost direct marketing''
Proposals from Royal Mail to give it greater control over the prices it charges could see greater amounts of direct marketing being delivered, a leading economist has said.

Speaking to the Telegraph, Ian Senior said a bid by Royal Mail to increase domestic postal charges and reduce business post charges could see marketers being able to afford more direct mail shots.

Prices are currently set until 2010, but company´s chief executive Adam Crozier is pushing regulator Postcomm to completely deregulate charges.

"I think it would have an impact on direct marketing because it is all about trying to keep costs down. If the cost goes down by one or two pence per item, then the volume could go up," Mr Senior told the Telegraph.

"If prices fall, it is possible that the Royal Mail will get a bigger market share of direct marketing, but it doesn´t mean that the volume will go up," added a spokesperson from the Direct Marketing Association.

Royal Mail claims that falling profits on business post is forcing it to seek changes to current fees, as it says it must both be more competitive in this area and charge more from domestic customers.

The regulated postal service still controls virtually all the mail delivered in Britan