Royal Mail Seeks Higher Business Fees To Boost Finances

London, England, United Kingdom (AHN) – The Royal Mail is seeking permission to increase charges for business customers by 7 percent beginning April 2011. The rate hike would raise $150 million (100 million pounds) a year and boost the service’s coffers.

Like post offices in other parts of the world, the Royal Mail has been affected by the decline in mail sent the traditional way as people shift to using email. To address the dip in the agency’s revenue, the British coalition government is considering privatizing Royal Mail.

To be affected by the proposed rate increase are bulk mailers, which are companies that sends out every day at least 4,000 letters. That would include banks and utility firms that send out thousands of letters and bills daily, and even smaller businesses such as catalogue retailers.

Royal Mail informed Postcomm that unless it was allowed to hike its business rates, the agency would run out of cash. The company reported last year a $235.5 million (157 million) loss on account of 6.4 million pieces of letters, packets and parcels collected by Royal Mail’s competitors, but delivered by the agency’s postmen and women.

Because of cost cutting measures, Royal Mail still registered overall group operating profits of $606 million (404 million pounds).

Small business owners and consumer groups opposed the Royal Mail’s planned rate increase.

Although the postal services bill, which went through first reading in the House of Commons last week, sought the privatization of Royal Mail likely through a stock market float or sale, the government said it would keep the Post Office publicly owned.

The Post Office is part of the Royal Mail group. Over the past few years, about 2,500 post offices – many located in rural areas – have been shuttered due to declining business. The National Federation of SubPostmasters is pushing to secure an agreement with Royal Mail for the agency to continue using the former’s 12,000 branches across Britain for these units to keep on running, if Royal Mail were privatized.

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