Royal Mail sets out proposed changes to reversion charges

[TrueBlueTerrier]

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Royal Mail has outlined a series of proposals which it hopes will quell an industry backlash over its sudden increase in reversion charges.
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The company had come under fire after doubling the number of staff in its revenue protection facilities and stepping up the policing of its specifications, which led to a dramatic rise in the number of envelopes found to be faulty and mailing houses facing surcharges of up to six figures.

Following the subsequent furore, Royal Mail introduced a three-month grace period on sealing issues in June and pledged to refund 90% of surcharges dating from March 2012 following intervention from the DMA and the Strategic Mailing Partnership.

Royal Mail’s proposals, which it presented at a DMA summit on Wednesday, include publishing on its website a league table of the most common faults together with advice on how they can be avoided.

It also proposes to introduce a system of proportionality whereby surcharges will be based on low volumes, medium volumes or high volumes of mail that have failed to meet the relevant product specification. It believes that this will ensure customers see a surcharge more comparable with the scale and impact of not meeting the specification.

Royal Mail plans to adopt a phased approach to the reimplementation of sealing surcharges after the grace period ends on 15 September, which will start at an additional 20% surcharge on the mail and increase to 50% by November. From January all mail that fails to meet the new sealing specification will be surcharged.

Finally, the company pledged to review its bulk mail specifications to ensure they remain appropriate and to introduce minor changes to its envelope sealing requirements for DL and above sizes that are presented in trays to allow for 35mm of unsealed flap at either end, up from 25mm.

Stephen Agar, Royal Mail's director of regulated business, said he was "pleased" but added that there is "still much to do".

"The DMA will continue to mediate and provide opportunities for all parties to reach a consensus," he said.

Royal Mail’s proposals have been welcomed by some sources within the mailing house sector.

Danny Narey, operations director of print and communications business Adare, business, said: "Although no-one in the mailing house community can be grateful that the situation surrounding sealing reversions arose in the first place, we can at least celebrate the fact that is has spawned a new level of understanding and collaborative interaction between traditionally disparate divisions of our industry.

"Royal Mail, as a complete entity, discussing the mailing process from glue specification through to handover of mail, with mailing houses and envelope manufacturers at the same forum, is previously unheard of."

Howard Matthews, vice-chair of the DMA and chief executive of Loricas, added: "There is no question that progress has been made but there is still a lot of work to be done. The next step needs to be the establishment of an independent working group that can look at issues that are still outstanding, such as the transparency of these charges."

[DGP1]

So they don't think they should pay extra when they don't follow the rules?
I may be wrong in my reading of this but that's how it appears to me.

[P13]

I wonder how long they have been getting away with it and how much has it cost Royal Mail

[POSTMAN]

So they don't think they should pay extra when they don't follow the rules?
I may be wrong in my reading of this but that's how it appears to me.

That's what i've read,and we gave them money back too.

[rhino49]

We get a lot of A4 size envelopes from a particular bulk mailer where the only way to see the address properly is to tear the window area as the items inside do not line up. Do you think these should be returned or should we spend all that extra time getting the delivery information ?

[P13]

We get a lot of A4 size envelopes from a particular bulk mailer where the only way to see the address properly is to tear the window area as the items inside do not line up. Do you think these should be returned or should we spend all that extra time getting the delivery information ?

Same here ,getting fed up wasting time with them they are DSA as well I think they should be told to sort it out or we return them to sender , it would be interesting to know how much time it is costing the business

[oypostie]

You mean good old Virgin Media

[DGP1]

You mean good old Virgin Media

[johnpaulwalker]

The proposals made will do little, if anything to quell the anger felt within the industry.
The Royal Mail take 90% of the revenue from a mailing for 10% of the work and they see this 'revenue protection' as an easy way of making more money.
No mailing house is able to 100% guarantee the standard of sealing from its machines, yet as has been said, the Royal Mail can sit as judge, jury and executioner on it.
I would like to see how the Royal Mail will react when their large customers are told that they can not have any discount as the risks are too great for the mail houses!!!!

[TrueBlueTerrier]

The Royal Mail take 90% of the revenue from a mailing for 10% of the work

Any chance of providing evidence of the breakdown of the work. For certain the delivery side, which is the most labour intensive part of our process, would account for most of Royal Mails costs. Just like to state that not looking for an argument, rather I think the UNOFFICIAL site would like to see the thinking behind the statement.

No mailing house is able to 100% guarantee the standard of sealing from its machines, yet as has been said, the Royal Mail can sit as judge, jury and executioner on it.

But then apart from the mailing house who else could. Our competitors (other postal companies)
One thing mailing house could do to help is to update their own software and databases. Just for an example, Virgin Media are still sending mail to 10 addresses on my round that were demolished 9 years ago. I reckon about every 4 weeks I still get a mailing from Virgin for them so that say 23p (price out of this air) x 10 x 12 = £27.60 - extrapolate that to 65,000 delivery rounds = £1,794,000per year - that's a big saving for just one company.

I would like to see how the Royal Mail will react when their large customers are told that they can not have any discount as the risks are too great for the mail houses!!!!

Perhaps, and I am acting as devils advocate here, could this be the same situation that Royal Mail faced when Liberalisation was introduced. Royal Mail had to adapt and become more efficient to make savings, perhaps mailing houses could see this an opportunity to upgrade their processes. Of course 100% cannot be guaranteed or achieved but getting as close as possible is of benefit to you, your clients and yes Royal Mail.