Substantial deregulation of UK parcel delivery market on the way

Substantial deregulation of UK parcel delivery market on the way

The announcement by the postal services regulator for the United Kingdom, Postcomm, that it will loosen its regulatory grip on the prices which can be charged for mail and parcel delivery is expected to lead to great opportunities for courier and parcel delivery companies. In announcing the relaxation of its control, Postcomm is acknowledging the growth of competition in the postal services market, and is implicitly saying that such competition is good for the health of the industry.

According to Postcomm, the market for delivery of parcels weighing 2kg (4.4lbs) should be substantially freed up to greater competition. In addition, it suggests that there should be no controls governing the price for sending parcels and packages weighing more than 500 grams (1.1lbs). Included in Postcomm's recommendations were powers for the UK's main postal and parcel delivery services provider to increase the amounts it charges for collecting, sorting and delivering stamped mail and parcels by up to 10 per cent.

This is widely expected to allow Royal Mail to raise up to 280million in extra funds, which the watchdog intends to ensure is used to protect the obligation which it has under its charter, to provide a universal postal service. With the prospect of the UK's major mail and parcel delivery service provider being given the freedom to raise its prices by substantially more than inflation, it is likely that more individuals, as well as businesses, will take the opportunity to look around at what alternative services are available.

This provides major opportunities for many companies which, because they operate on a large scale, can offer similar economies from having massive resources available such as delivery staff and appropriate vehicles, as well as the latest technology to help them do their job as efficiently as possible. At the same time, the UK is seeing a division of the labour involved in parcel delivery, with one sector co-ordinating deliveries and buying space from others, which carry out the physical deliveries themselves.

These agents can, themselves, shop around and negotiate their own terms with the parcel carriers, meaning that there is already considerable variation in the prices which are offered from one agent to another. With the cost of stamps expected to go up as a result of Postcomm's announcement, people and businesses should see greater benefits from shopping around to find the best price they can for the specific delivery service they need.

The place to compare all the services and prices offered by the many international courier companies is online. It is also now possible to find out the differences between various levels of service, such as standard and express delivery, which they offer.

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