Tuesday, March 19

Royal Mail 2013 Price Increase / Compensation Cover Cut.


I'm cross.  I mean really, properly, teeth grindingly cross.  In just under 2 weeks time, Royal Mail are changing the way we send parcels.  And it is going to affect thousands and thousands of small businesses.

I'm one of those small businesses.  The kind that is too busy getting on with the running of said small business to stick my head above the parapet and complain.  But last night I wondered if all the small too-busy businesses stuck together and complained, it could achieve something.

This is what is going to happen.  Royal Mail is going to divide parcels into three categories.  Small, Medium and Large.  

OK, you say, that sounds fairly reasonable.  Until you read the dimensions of what constitutes a small parcel.  Length 45cm.  Fine, no problem, quite generous in fact.  Width 35cm.  Still fine, quite happy with that.  Depth 8cm.  Fine. Hang on, WHAT? 8CM!!!!  

That's not a parcel, that is a FAT ENVELOPE. 

So if your nice small parcel is basically, parcel-shaped (i.e. not flat, but 3-dimensional) then it will have to be sent as a Medium parcel.  Still ok with that?  It's now going to cost you £5.65 to send.  

If you read the small print, there is an exception on parcels smaller than 16cm x 16cm x 16cm.  So in order to squeeze into that little package, thousands of businesses are having to order in new boxes, re-design products and reduce protective packaging.  

Oh, well, I suppose that's not the end of the world.  Oh hang on again, there's more....

So you've bought new boxes, you've removed half your protective packaging, you've redesigned your product, all ready to send.  Only now the compensation cover should your parcel get lost will only be £20, instead of £46 as it currently is.

So instead of raising the cover limit, as perhaps you might expect them to, to keep in line with inflation, they've more than HALVED IT?

Aha, say Royal Mail, you can send it by Special Delivery, the compensation cover on that is up to £500.  Great, that small box is now going to cost you £6.95 to send.*(SEE BELOW)

Now, I've worked really hard for the last 4 years building up a small, but flourishing business.  And this small business of mine, it's not just a way of earning a bit of pocket money for me while I'm a full time mum looking after the kids.  It's much more than that.  

It's a way of keeping my (hard won) skills as a traditional stained glass artist up.  It's a way of feeling that when my children are old enough not to need me quite so much, I have something to return to.  And not only that, I'm constantly learning while I'm doing this.  About Marketing, PR, Social Media, Enterprise, Profit Margins, Retail.  It's a way of staying connected to the workplace while I'm temporarily filling the role of mum.  And there's thousands of us doing the same thing.  

And it's not just people who are taking a break from their careers to raise kids who have turned to selling online (Etsy, Folksy, Ebay, Big Cartel, Not on the High Street - and many other e-commerce sites) to keep them ticking over.  It's people who've been made redundant, or who have health issues that prevent them from doing a traditional 9-5.  It's also talented, enterprising young adults who can't find a job because there aren't any.

And the Royal Mail is going to trample all over us, with these unfeasible postage charges.

Here is a link to Royal Mail's leaflet outlining the new charges: http://www.royalmail.com/sites/default/files/RoyalMail_OurPrices_April2013b.pdf

There is an e-petition you can sign.  It's here: http://epetitions.direct.gov.uk/petitions/46737

Please sign it, Tweet, Facebook it, Instagram it, Pin it.

Thank you.


Lots of very interesting comments have been posted below - well worth a read to find out about different courier options and other people's experiences and ways around the problem.  This one in particular sums up my feelings brilliantly:


Signed and shared. This is an issue that needs to be looked at seriously. We're not going to come out of the recession any time soon if small businesses are given this extra hurdle. Small businesses should be encouraged and nourished so that they can grow and contribute to getting this country back on its feet. The government needs to step in. Thank you for posting this petition, it's in all of our interest (as small business owners and consumers) to sign it.

*It has been pointed out that the Signed For option (which used to be known as Recorded) does offer compensation up to £50 on both 1st and 2nd Class options, although of course the size restrictions still apply.




67 comments:

  1. So well put Flora! I really couldn't have said it better myself (in fact nowhere near). Hope you don't mind I've tweeted the link to your post as it just explains things so much more eloquently than you can in 140 characters!! x

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  2. Great post. I will be sharing this.
    Even more of a kicker is that the post office haven't even got any leaflets available on the change. I rely on post for my business in a small way and I am annoyed. I feel gutted for the many businesses that won't be able to survive this change.
    Also what you don't mention is all the complex recoding that businesses will have to do to their websites to calculate p&p charges. Some will have to completely scrap their systems and start again.

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  3. What a load of shit - not you the Royal Mail. GGGGGGRRRRRRR! Thanks for putting it out there. I've signed and facebooked it. x

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  4. I've been dreading this rise but had kinda kept my head in the sand about the actual nitty-gritty changes. It's worse than I thought! This is going to be a big deal for my business too. Thanks for sharing.

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  5. Hi Flora, I don't know how I've managed to miss talk of these changes, but your post is the first I've heard of it. Its absolutely ridiculous - thanks for highlighting it to me and explaining it all so well. I've signed the petition and will tweet your post and facebook it. x

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  6. Hi Flora, thanks for highlighting this, it's an absolute joke what are Royal Mail playing at! I've signed the petition and tweeted about it too. It is bound to put people off from buying things online which is such a shame when so many people have built up thriving businesses on etsy/folksy. x

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  7. Thank for posting Flora, I've shared your post on my FB page.
    Like you, I'm absolutely fuming about this. Anyone who posts lightweight products which are deeper than 8cm are screwed. So that's everyone who sells things like cushions etc.
    If anyone else is interested there is another e-petition here, 2000 people have signed it so far http://epetitions.direct.gov.uk/petitions/33550

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    1. Hi, I did see that one, but it wasn't as comprehensive as the petition I'm linking to, and actually wouldn't help me as most of my items are over 250g. Frustratingly, neither of them deal with the issue of compensation cover, and there isn't enough time to start a new one.

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    2. Yeah, I suppose it's about what is important to you. The biggest thing for me is that it will now cost at least £3 more to post a lightweight product such as a cushion :0(

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    3. Has anyone also noticed that an Airmail small packet is bigger than the current UK equivalent parcel. So if I use my custom boxes (45 x 35 x10 cms) it now goes as a medium parcel. What a rip off.
      Equally the non-existant Airsure and International signed for services are also useless,as all you know is that the parcel has left the UK. No record is made (or reported)for either actual delivery, or that a signature was taken. I have to email my clients to see if the parcel has arrived. Complain to Royal Mail and they just recite the service description back at you. They don't give a monkey's
      regards
      Dave Hickman
      (T/A 205 GTi covers & trim)

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  8. Thanks for everyone for sharing this! Keep at it x

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  9. Hi Flora,

    Sorry to sound picky but your petition states halt price rices from 2014, should it not be this year i.e. 2013?

    I've already signed the other petition (http://epetitions.direct.gov.uk/petitions/33550) although I suspect there will be little action on either as people do not recognise the impact this will have across the board.

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    1. Hi Phil, I think what that petition is asking for is something that Royal Mail could actually do - accepting there will be a price increase this year but that there should be no further price rise in 2014. Also that the dimensions of a small package be combined, to allow for example, small cube shaped packages to qualify as Small Parcels. More likely to get action if it is easy for Royal Mail to do!

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  10. Thank you for putting this in the public eye. I too have been hoping for the best but fear this will be a breaking point for small businesses. More will have to give up as sales will be too difficult to achieve. I sell dairy free and gluten free chocolates online. We buy wholesale and sell on, we do not have the opportunity to absorb these price rises. I agree with all the points raised above regarding parcel size, weight and compensation. I will certainly be having to look for an alternative.

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  11. After you last mentioned the new postage prices I've been in a bit of a panic as quite a few of my things are more than 8cm deep and I doubt very much people will pay such high postage costs. I'm off to sign the petition and I've tweeted your post. Bethx

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  12. Thanks for bringing more attention to this - I am sharing and tweeting. So frustrating. It's all about privatisation and money - nobody wants the small parcels and letters market. If it was staying in the public sector, there would be an obligation to provide this service. Grrrr.

    Emma
    Baker and Maker

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  13. I've seen posts similar to this one from lots of my maker friends. Whilst I agree something must be done / said about it, have you considered any alternatives such as Collect Plus? (http://www.collectplus.co.uk/send) My husband and I have used them quite a bit. Of course, it all depends whether you have a shop nearby that does it! Good luck.

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    1. Thanks Bee, that actually looks really good - £4.99 (under 5kg) and covered up to £50 is definitely way better than what Royal Mail will be offering.

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  14. have signed the petition flora. going to look at collectplus now too! x

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  15. I totally agree. If the government wants to stamp out small mail order and internet businesses by allowing these sort of price hikes, they are going about it the right way. I bet there are hundreds of thousands of people who will be affected. A lot of us are trying to get by doing Etsy Folksy and selling things on Ebay. I find that buyers expect postage costs to be low or even free. They don't realise how much postage is and that packaging costs and it takes time to parcel things up. I already absorb part of the postage costs into the price in some cases. Its outrageous. I'm off to sign the petition...

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  16. I've signed the petition, I hope more and more follow suit. Like you, we are once again thrown into crisis by the greedy suits at Royal Mail. We've written to Vince Cable, The PM, Ofcom, the BBC and the Royal Mail themselves. As Ofcom actually capped the price of small packets last year after their 2012 price hike. Now the Royal Mail have done away with small packets altogether and introduced these new categories, knowing that they are more than doubling the price of most packets. Good luck with the petition, hopefully the courier services are ready to cope with the influx of new customers on April 2nd.

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  17. http://www.parcel2go.com/ I've used Parcel2go for UK parcels for a time now, partly because of the price and partly because the parcel is collected and tracked. The last book I sent cost me less than Royal Mail, was booked through the parcel2go website, collected by http://www.myhermes1.co.uk/.
    Well written everyone. I'm off to sign the petition now.

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  18. From someone who has been made redundant after 20 yrs, couldnt find a job, found a niche & set up a small business this is just the worst news. Customers DO expect free postage and of course competitive pricing on your product. As you say, boxes bought etc etc but Thank you for all the advise.

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    1. Thanks for posting and sharing :)

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  19. Flora

    A brilliant blog. Thank you for doing it for all of us.
    I've Shared, Tweeted, Forumed (is there such a word ?), Facebooked, Pinterested and basically spread the word around as far as I can.

    I have also asked my MP for comments on the effect it will have on buyers, sellers especially small businesses and also, and perhaps more importantly our local post offices.
    My local ( rural) post mistress is worried it will put her out of business when her customers change to using couriers for their small packages which are suddenly going to be charged as if enormous parcels.
    I do wonder if anyone out there has noticed yet what is coming as I think the post offices have only just received full details (and they are Not amused).
    Joy
    PS: I think I will do a bit more Tweeting. Maybe a few Twitters to the Press might get noticed.

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    1. Brilliant, thank you so much Joy. I spent all tuesday tweeting about it, but it's so time consuming, and I didn't want to start to annoy people for banging on about it endlessly! It's great if you can take the baton and run with it for a bit - then find some other kind soul to carry on with it. The more attention this gets, the better. It is a political issue. I'm very surprised that Folksy haven't helped out more - I tweeted them twice to RT the petition, but they don't seem to want to know.

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  20. We are going to quietly vote with our feet and move all UK deliveries to Hermes who offer a fully tracked service up to 2kg for £4.19. Royal Mail have already priced themselves out of the 1kg + market and this completes the process for all parcels. I feel very sorry for the poor counter staff who have had very little notice of this , ahem "simplification".
    The Royal Mail have been protesting for years that the letter post is unprofitable but the rising parcel volumes are where the profit is. These were my thoughts on the subject.
    Good luck with the petition.

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    1. Thanks for that Rog, very well said in your blog. The tragedy is that this will also mean the end of lots of rural post offices who rely on the business of small cottage industries.

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  21. Well said that woman. This will have a big impact on my business. RM may think that they'll make more money from this, but people are either going to look for alternatives, or stop sending completely. My buyers already think the postage is high; this makes it astronomical.

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    1. Thanks. I still haven't decided what I'm going to do!

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    2. Lisa@louloubelle.co.ukMarch 27, 2013 at 7:27 PM

      As another jewellery maker I feel my hands are tied - nowhere else as far as I am aware covers/insurers jewellery apart from RM special delivery so don't feel I can move to couriers.

      Delete
  22. I will be sharing this - I'm one of the lucky ones who sends tiny parcels but I am in a minority

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  23. HERE HERE! I've shared this and signed the e-petition, fab post xx

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  24. Thank you for this post, I am unspeakably upset about this as I have only just started my business and due to the size of my bath bombs and the fact that I really do have to package them well to avoid damage I am never going to be able to make my business work, I mean who is going to pay over £5 to ship a bath bomb????
    I will be posting the link to the petition on my facebook and sharing it on my Etsy groups so thank you for putting this out there.

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    1. Exactly - this not only scuppers those already in business, but will also prevent other people from contemplating starting a business.

      Thanks for putting the word out :)

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  25. Also singed and shared, as a small business on ebay we will have to remove some of our most profitable products from sale as customers will not pay to have them posted.

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  26. Well said. I totally agree with you. I'm going to look into couriers to see what the best deal is.

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  27. wow, well said. I am in exactly the same position as you...the paragraph about being a mum & keeping in touch with the workplace is so true. Thanks for the link to the e-petition, will be signing it now.

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  28. Great post! I have been thinking about opening up an Etsy shop, now I'm completely re-thinking all my products and packaging. I think the Royal Mail will find they will lose business, as we all will look for cheaper couriers.

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  29. Yes, yes, yes, this is an outrageous move by Royal Mail and I'll be very surprised if they don't go under within the next 5 years - unfortunately, this will also put a huge pressure on already struggling Post Office Counters, who will also likely go under unless they do a deal with other courier companies(if they're allowed to do this). About 50% of my trade is overseas, so I'm not sure how that will be affected... I'm pretty sure I'll find a more reasonable courier company for my UK items that don't fall into the new small packet criteria, but it's yet another blow for independents who are just trying to make a go of things in an extremely dismal financial climate. I fear that soon we'll all be controlled exclusively by large conglomerates who will produce everything from food to fashion and there will be no room for any individual expression at all.

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  30. You've missed the recorded delivery (now "signed for" ) option - there's comp of £50 on that - you don't need to go straight from 1st class (£20 cover, no proof of delivery) to Special Delivery (£500 cover, fully tracked).

    It's still crap, but adds £1.10 to the base price of the parcel rather than boosting it to the new band completely. (and that's another thing, adding "recorded" service used to (2 years ago) be only £0.79... now it's £1.10.. ick!)

    (please excuse the "anonymous" posting - I don't have an account with any of the other options)

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    1. I didn't see that - I presumed Signed For was just the same as normal first or second but with the addition of a signature. I'll add this to the bottom of the post.

      Thanks for alerting me, that will make my life much easier!

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  31. Signed and shared. This is an issue that needs to be looked at seriously. We're not going to come out of the recession any time soon if small businesses are given this extra hurdle. Small businesses should be encouraged and nourished so that they can grow and contribute to getting this country back on its feet. The government needs to step in. Thank you for posting this petition, it's in all of our interest (as small business owners and consumers) to sign it.

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    1. Excellent point, very well made. I'll add it to the bottom of the post :)

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  32. Hi Flora, Thanks so much for laying this out so clearly for us all, I've struggled to make sense of it on the royal mail website and at my local post office!
    It makes me so cross and so many small businesses are going to suffer :o(
    Signed and shared....

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  33. I have blogged about this as well at http://throughthelookingglass12.wordpress.com/2013/03/26/new-postal-rates/

    I know I will sell less because of the price increases and I can't afford to hide it in my prices and take a hit there as well!

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  34. I'm a very small scale seller on ebay - or at least I will be for the next couple of days. Most of my items are lightweight clothing, so the parcels will fall into the new medium parcel range, at a cost of £5.20. Identical parcels posted today cost me £2.20. Most of my items sell for between £1.99 and £3.99, plus postage. No-one will pay £5.20 postage for even a £3.99 item. The cheapest option I can find now is MyHermes parcel shop, at £3.00. That's still a 36% increase in the postage cost, but it's better than the Royal Mail alternative! I also worry about the future of our local post office, as it will lose a lot of trade.

    PS sorry about being anonymous, but I'm not registered with other sites - yet!

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  35. Well I prepared for the changes, paid a premium for 'small parcel' boxes, researched alternatives for when my parcels went over the small parcel limit, changed the postage rates on my website and advised customers via facebook, twitter and a blog that my delivery service had some amendments to it. Took my first parcel to the post office yesterday and the first one refused to accept it because it didn't slide easily though the guide Royal Mail have issued to them. It appears they have made the small parcel guide exactly 8cm tall which means parcels which are at or very near the maximum 8cm limit struggle to fit through the guide!

    The second post office I visited accepted the parcel but only after we had got the tape measure out and confirmed that it was no more than 8cm tall. I am now worried that someone else in the Royal Mail chain will decide that it's not a small parcel and demand additional postage from my customer before they'll deliver it. I've had to contact the customer just in case.

    It seems this small mistake on the part of Royal Mail(I am giving them the benefit of the doubt and assuming that someone has made a mistake with the guide) is going to be the cause of even more stress to all of us trying to continue to support their business by complying with their new postage rates.

    I'm not a happy post-easter bunny!

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    1. That sounds very frustrating. They do seem to be slaves to those measuring guides. God forbid you try and send a parcel that is 0.5mm bigger than their guide!

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    2. The same thing happened to me the other day. I went to my local PO with a small parcel 8cm tall only to find they wouldn't accept it because it didn't slide through the guide easily. I had to take it back home and cut the box down by 1mm and take it back next day. This time a different member of PO staff accepted it without even offering it up to the guide. What is going on, this is so unproffessional.

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    3. My company had to go back to the drawing board regarding our new packaging because of these changes. We both redesigned packaging and change suppliers so that we could remain in the small parcel bracket, with our new boxes coming in at 270mm x 210mm x 75mm. Happy days.

      Yesterday we take a small batch of parcels to the local post office. The first few go through their little letterbox guide, but the last is a little sticky. No problem we thought, it still goes through. The clerk then turns to us and says the parcel will probably be pulled out of the system and surcharges passed to our customer. And that'll be the extra £2.65 AND a handling fee of god knows what. (I can well imagine a dedicated processing centre where the task is to deform as many as possible to lift revenues.)

      When we point out that the boxes are 75mm deep (and I have since checked a load of them - all under 80mm), the clerk informs us that they have been advised by RM that boxes must go through the slot freely and with no hindrance whatsoever.

      They have advertised the small parcel service for up to 8cm, but the PO staff are told they box must slide through freely. If the guide has been made to exactly 80mm, then surely they must accept boxes that need a little nudge to go through? Otherwise me smells false advertising. In my book up to 80mm means "up to and including" 80mm. Otherwise it should be advertised as being for parcels UNDER 80mm.

      Next problem comes about when the parcel enters the system. Our boxes are fairly sturdy and packed with void filler, but if an evil postie gives the box a squeeze it'll deform, probably around the midriff, and potentially push it over the 80mm. Do my customers get slapped with a surcharge for that?

      Interestingly I note that the RM online shop sell mailing boxes, but 110mm is the smallest.. http://shop.royalmail.com/postal-stationery/mailing-boxes/icat/cat154/

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    4. I am having exactly the same problem. I bought a large number of boxes which even the PO staff agree are only 78mm but they won't go through the slot so I have to pay for a medium parcel.This is going to cost me thousands of pounds which I should not have to pay! I have tried writing to my MP! Surely Trading standards should be able to do something about this - if they had a weighing scale that wasn't accurate it would not be allowed.

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  36. Email from Collect+ this morning - http://www.collectplus.co.uk/news/?p=609&utm_source=Current&utm_campaign=d710b3cf01-Goodbye_Jiffy4_2_2013&utm_medium=email
    They have removed the "must fit a jiffy bag" requirement for their 0-2kg band. Hermes are still cheapest if your parcel is not RMs miniature "small parcel" size and weighs 0-1kg (£3.30), but now if it's 1-2kg Collect+ is cheapest @£3.99 (max dimensions 50x30x30). Hermes is £4.20 for the same weight.
    FWIW in the past couple of years I nearly always used one of them for parcels over 1kg as they were so much cheaper than RM, even though they took longer (3-5days). I've only had 1 problem with a damaged parcel in 2 years too...

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  37. These changes are simply outrageous, we have only just finished fazing in the huge price increases from last year and we still were not passing on the full amount of increases to our overseas customers. We are a small independent book publisher and we send 50% of our books overseas and the last rise was enough to make me worry seriously about the impact it would have. This latest rise is the final straw!!! if they do this every year it wont be very long before the cost of the postage will be more than the book to somewhere like America!! Also post office staff were sworn to secrecy about this until it happened, that little underhand tactic has also cost us a lot of money. We take pre orders for up coming books a few weeks before they officially published. This means we have a lot of books paid for under the old prices on which we will loose a considerable amount of money.

    I understand they have to make a profit but the way they go about changes is terrible and very destructive for small businesses. Royal Mail if you are listening wake up before you destroy your customers!!!

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    1. Yes, it was only through a few wise folk on twitter that I even knew about it - the secrecy and sneakiness of it is disgraceful.

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    2. Hi Flora

      Well done for stating your comments so well. I agree with all your comments. Most people accept that prices have to rise in line with inflation but these increases are way more than they should be. The biggest issues are the restrictions on sizings and the changes in compensation levels. To limit a small parcel to a depth of 8cm (with the exception of parcels that measure up to 16cm length, width 16cm & depth 16cm) and have a high weight limit of 2 kg is totally ridiculous. And, again the medium parcel size limit of 61cm length x 46cm width x 46cm depth but with a weight of up to 20kg does not make sense. In my opinion the weight limit of 20 kg is fine but not many customers are going to need to make use of this high limit, but many customers ARE going to need to send items bigger than the new size restriction, but will only be able to do this using Parcelforce, which again in the majority of cases will cost us all more.

      Are Royal Mail doing this to make themselves more profitable in order to be sold off I wonder?

      I really hope Royal Mail will receive enough adverse comments, and loss of revenue by customers using other means of delivery so that Royal Mail will re-think their actions and take on board what their customers want, need and expect from them.

      I think that up to now they have offered an excellent service, but these new price increases and changes have been ill thought out and the vast majority of their customers will be out of pocket as a result and also receive a lesser service.

      I feel sure that other organisations will be looking at how they can provide a service that the majority of the people in this country want and need but it will obviously take a year or so for a new company to get up and running to provide an excellent, reliable and in the main affordable service like Royal Mail used to do prior to the April 2013 price and service changes.

      I too will make sure that all my friends know and understand the impact of these April 2013 changes and hopefully if everyone who feels Royal Mail have acted unfairly take action and sign your petition and make as many people aware as possible, then hopefully Royal Mail will respond in a positive way and gain back some respect and some of their old customers.

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  38. This may have been mentioned before, but if not, how crazy is this that it is now cheaper to send a medium sized parcel weighing up to 250g to Europe and World Wide and up to 500g to Europe than it is to send those very same parcels 2nd class within the UK.

    250g: £5.20 UK, £3.50 Europe, £4.50 Zone 1, £4.70 Zone 2.

    500g: £5.20 UK, £4.95 Europe.

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    1. I thought part of the Royal Mail price increase was a 'fuel charge' - for the environment and all that. What halfwit didn't think that through? Crippling increases, and my postman is really hot, so I'll miss the eye-candy as things start coming and going via courier.

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  39. Apparently My Hermes are going to be raising their prices soon too. If the couriers all do this then we're screwed!

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  40. Biggest problem now is sending internationally. Below 2KG I have sent items via Royal Mail as there is no other affordable option.

    Its £5 more to send signed for and cover the insurance to £50. If I sell something for £30 even if its extremely lightweight it would around a third of the cost of the item to send it! When it was a tenth before!

    This will put people off international buyers at a time when as a country we should be exporting more!

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    1. Absolutely - the cut in compensation cover is scandalous.

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  41. It's because the Government want to privatise the service, it is being run down so that they can make the shares more attractive to the parasites who buy them. Many of them friends of theirs, of course. I'm in a very rural area, this will make life impossible for those in such places.

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  42. Petitions on gov. website. When they get over so many (is it 1000? Maybe more, but still) it has to be brought to parliament to be discussed. This is putting more and more businesses out of business! Also, speak or write to your local MP That is what they are there for! This government cannot keep getting away with ruining this country and they will if people just complain and don't get into action.

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  43. As a box supplier, we've seen a lot of customers affected by this PIP change. It's interesting because a lot of major internet retailers have special arrangements with logistics companies, not excluding Royal Mail, that circumvent these kinds of restrictions so I do wonder if its affecting lots of smaller businesses as many people on this blog have already commented.

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