subject: Government Announces Plan To Loosen Controls Over Parcel Delivery Services And Parcel Prices [print this page] Scrapping limits on the prices individuals and businesses pay for sending heavy parcels is one of the central objectives of the new UK coalition governments proposals for reform of the UKs postal services. Officials from the postal industry regulator Postcomm admit that the current pricing structure and regulatory framework governing the operation of mail and parcel delivery services have failed to keep up with developments in the sector since they were introduced in 2006.
One of the main aims of the reforms which the new government announced within weeks of taking power was to make mail and parcel prices more transparent, and reflect better the actual cost involved in sending a parcel. And because there is greater competition in the market for parcel delivery of items weighing more than 750grams, Postcomm believes there is no need for it to tell delivery companies how much they should be charging for these services instead, the companies themselves should be free to set their own prices.
Postcomm chairman Nigel Stapleton has admitted that the markets for home delivery and express delivery have radically changed since the last review of regulation in the sector. In the intervening time, parcel volumes have risen due to a massive switch towards online shopping, while the amount of letter post being sent has been substantially reduced due to the increased use of email. He added that sustaining a universal postal service, while supporting the interests of users of the all parts of the mail and parcel delivery service, would remain at the heart of regulators objectives.
Royal Mail is expected to be given more commercial freedom to enable it to compete in the parts of its market which have been the subject of the toughest competition including parcel delivery and express delivery services. But at the same time, the measures suggested are designed to ensure that Royal Mail does not use its power in the market to stifle the growth of competing services.
There is also elbow room for the Post Office to raise up to 75million towards the ongoing cost of sustaining its services by increasing the price of stamps above the rate of retail price inflation. Postcomm has said this money can also be used by the Royal Mail to modernise its business and make it more efficient. If it comes about, further liberalisation of the parcel delivery market must be good news for businesses and individual customers alike, as the competition created will breed innovation and a spirit of enterprise as delivery companies seek to make themselves stand out from the competition.
