Royal Mail sets out proposed changes to reversion charges
By Melanie Defries Friday, 03 August 2012
Royal Mail has outlined a series of proposals which it hopes will quell an industry backlash over its sudden increase in reversion charges.
The company had come under fire after doubling the number of staff in its revenue protection facilities and stepping up the policing of its specifications, which led to a dramatic rise in the number of envelopes found to be faulty and mailing houses facing surcharges of up to six figures.
Following the subsequent furore, Royal Mail introduced a three-month grace period on sealing issues in June and pledged to refund 90% of surcharges dating from March 2012 following intervention from the DMA and the Strategic Mailing Partnership.
Royal Mail’s proposals, which it presented at a DMA summit on Wednesday, include publishing on its website a league table of the most common faults together with advice on how they can be avoided.
It also proposes to introduce a system of proportionality whereby surcharges will be based on low volumes, medium volumes or high volumes of mail that have failed to meet the relevant product specification. It believes that this will ensure customers see a surcharge more comparable with the scale and impact of not meeting the specification.
Royal Mail plans to adopt a phased approach to the reimplementation of sealing surcharges after the grace period ends on 15 September, which will start at an additional 20% surcharge on the mail and increase to 50% by November. From January all mail that fails to meet the new sealing specification will be surcharged.
Finally, the company pledged to review its bulk mail specifications to ensure they remain appropriate and to introduce minor changes to its envelope sealing requirements for DL and above sizes that are presented in trays to allow for 35mm of unsealed flap at either end, up from 25mm.
Stephen Agar, Royal Mail's director of regulated business, said he was "pleased" but added that there is "still much to do".
"The DMA will continue to mediate and provide opportunities for all parties to reach a consensus," he said.
Royal Mail’s proposals have been welcomed by some sources within the mailing house sector.
Danny Narey, operations director of print and communications business Adare, business, said: "Although no-one in the mailing house community can be grateful that the situation surrounding sealing reversions arose in the first place, we can at least celebrate the fact that is has spawned a new level of understanding and collaborative interaction between traditionally disparate divisions of our industry.
"Royal Mail, as a complete entity, discussing the mailing process from glue specification through to handover of mail, with mailing houses and envelope manufacturers at the same forum, is previously unheard of."
Howard Matthews, vice-chair of the DMA and chief executive of Loricas, added: "There is no question that progress has been made but there is still a lot of work to be done. The next step needs to be the establishment of an independent working group that can look at issues that are still outstanding, such as the transparency of these charges."
Eslewhere, 4DM group sales and marketing director Lance Hill said work done by the Strategic Mailing Partnership (SMP) had been key to ensuring a dialogue with senior figures within Royal Mail.
"If it were not for the SMP I would not have had the high level access to key decision makers who have listened, and acted swiftly to put proactive steps in place.
"Without question the SMP has played a key part in the three-month moratorium on envelope sealing, but also given significant resource to finding a solution that suits all of the SMP members and Royal Mail," he added.
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