UK mail-order d&p industry ‘saved’ from extinction
August 19, 2005
The mail-order d&p industry has escaped possible extinction because the Royal Mail?s new ?sized-based? postal charges will not be as costly as first feared.
Expressing relief at the news Bonusprint managing director Anthony Ward told AP: ?Considering that we started in a position where we were going to be switching the lights off, we are – at least – still in the game.?
Mail-order d&p firms pay the Royal Mail for the cost of a film sent to them by customers in pre-paid envelopes. But the Royal Mail’s plans to charge post according to its thickness as well as its weight could have meant disaster for the industry (see AP 29 November 2003).
The Royal Mail?s original proposals would have quadrupled the cost of posting a roll of film and pushed up the industry?s postage costs by £7m a year – forcing mail-order d&p firms out of business.
However, after lengthy consultation, the charging structure – approved this week by postal regulator Postcomm – means that an envelope containing a roll of film will not now be re-classified as a ?packet? as had been feared.
Instead, according to Bonusprint, mail-order d&p firms incoming mail will be treated as a ?large letter? under the Royal Mail?s business response service. This limits thickness of the envelope to 50mm which means that both films and single-use cameras will be covered, added Ward.
Ward expects this to push up the industry?s postal charges by just 15%, rather than the 300% hike he had feared, when the new pricing structure takes effect from September 2006.
Truprint expects its costs to rise by around 20% but the firm?s former finance director Ray McCarthy agrees the Royal Mail?s initial plans would have forced it out of business. ?It?s changed from being life-threatening news to being bad news,? added McCarthy who works as a consultant for the company.
The new charges will, however, mean that posting a free film to customers, along with their prints, will be more expensive for mail-order firms than before because the envelope will be classed as a ?packet?, said Ward.
He added that it was too early to say exactly how the new postal charges would be reflected in Bonusprint?s services and pricing structure.
He said that rather than being sent a free film, customers may be given an option to receive, for example, a CD, which is less bulky and therefore less expensive to post.
?We will always try to avoid putting prices up for customers,? continued Truprint?s Ray McCarthy who said the company would look to absorb cost increases by making savings internally.
Truprint and Bonusprint both fought against the Royal Mail?s initial proposals through the Mail-order Photofinishers Association.