Royal Mail PLC Royal Mail Access Contracts (3920X)
10 Januar 2014 - 1:05PM
UK Regulatory
TIDMRMG
RNS Number : 3920X
Royal Mail PLC
10 January 2014
10 January 2014
Royal Mail plc
Royal Mail Access Contracts
Royal Mail plc (RMG.L) today announces the 2014 Access tariff
increases and some changes to its contracts with its 31 Access
customers. These changes help secure the sustainability of the
Universal Service, against the backdrop of a continuing decline in
letter volumes. They are part of a longer term programme to adjust
Access contracts so that they better reflect the structure,
operation and costs of maintaining the Universal Service delivery
network.
Underpinning the economics of the Universal Service
The Universal Service Obligation (USO) requires Royal Mail to
maintain a high-fixed cost infrastructure capable of delivering to
more than 29 million addresses six days a week. Access customers'
volumes now constitute around half of the UK's inland addressed
mail, and over 70 per cent of business mail.
Royal Mail is changing the price differential for delivery
between its four zones (London, Urban, Suburban and Rural), to
ensure they are more reflective of relevant costs and market
conditions. This change responds to Ofcom's comments in its March
2013 guidance document on end-to-end competition in the postal
sector.
Sharing the cost benefits with Access customers
Access customers' future volume intentions, including their
local geographic posting profile, are a key driver of the economics
of the USO. For the first time, and as a result of the contractual
changes, Royal Mail will share with some Access customers the cost
benefits generated by the greater local volume certainty they
provide. Access customers providing monthly volume forecasts,
including significant changes, for up to 2 years ahead based on a
national mailing profile across 86 local geographical districts,
will pay 0.25p less per item. In return, Royal Mail will be able to
realise a clear cost benefit by being able to plan more accurately
at a local level, delivering greater efficiencies in the
process.
Access customers who choose not to provide the more detailed
volume certainty will continue to be charged for delivery on the
basis of the existing four zones.
The changes we are making to our Access contracts follow careful
consideration to ensure compliance with our regulatory and legal
obligations. Price changes will come into effect on 31 March 2014,
with average increases of between RPI(1) +0.3 per cent and RPI +1.0
per cent, depending on customers' choice of price plans.
Stephen Agar, Royal Mail Managing Director, Consumer and Network
Access said: "The UK postal regime is one of the most open and
competitive in the EU. Royal Mail is constantly driving efficiency
across our operations against the challenge of falling mail
volumes. Our Access customers are responsible for around half of
the mail we carry and we want to work with them to improve our
planning and the generation of cost savings across our delivery
network. The changes we are introducing will ensure Access
customers can, where possible, share those benefits with us."
Ends
For further information please contact:
Media Relations
Mish Tullar
Phone: 07423 524154
Email: mish.tullar@royalmail.com
Investor relations
Catherine Nash
Phone: 020 7449 8183
Email: investorrelations@royalmail.com
Notes
(1) The RPI measure used is the ONS average measure of RPI over
six months from May to October 2013, which was 3.1 per cent.
Access is where Royal Mail accepts mail that has been partially
sorted by large customers and other postal operators, at our Mail
Centre nearest the recipient's address. For an agreed price we then
deliver that mail to the recipient.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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