News

Financial constraints on printers will increase in 2008 as Royal Mail has announced price hikes for its business-to-business mailing.

However, according to postal price comparison website Post-Switch, the price increases are more likely to affect upstream mailing providers such as TNT and DHL.

From 7 April, Royal Mail will be increasing its Mailsort tariff rates. Mailsort two is going up by 1.5p per unit and Mailsort three is up 0.8p.

Commercial mail prices will also increase, with a first class mailer costing 36p, up from 34p, and the second class price increasing from 24p to 27p.

Jonathan DeCarteret, senior postal analyst at Post-Switch, said: “What we are witnessing here is an attempt by Royal Mail to reduce the margin between its retail rates and the downstream access rates it charges competitors to access the final mile.

“Mail operators wishing to maintain a price advantage over Royal Mail are going to have to reduce their profits.”

Although a number of private operators have entered the UK postal market since it was opened up to full competition in February 2006, Royal Mail continues to dominate final mile delivery. Only 12% of the UK direct mail volume has switched from Royal Mail to downstream access, according to Post-Switch.

Lucy Edwards from Dartford-based Howard Hunt said: “Our clients trust us to keep the cost of jobs down and often look to us for help in stretching the budget, so switching postal providers to save money makes sense.”