Royal mail price increase could hurt small law firms

Royal Mail’s Regulator has recently allowed Royal Mail to set their own prices for first-class and business mail.  This has seen an increase of 30 per cent on first-class mail and 39 per cent on second-class mail, these changes will take effect from the end of April.
Many firms may have already decided not to renew DX subscriptions due to increasing subscription fees and a change to the way in which the DX is monitored.  The DX recently announced new monitoring measures, in line with Royal Mail’s format and weight monitoring, which sees firms having to complete an A3 sheet during monitoring periods.
One alternative, if you don’t already use it, is a franking machine, where  Royal Mail offer large discounts for franking machine and franking meter users.
John Lafferty at Eagle Consultancy, a firm specialising in reducing postal costs for law firms commented:
“As the Royal Mail continue to strive to offer a great service, currently the best in Europe, with the highest targets, they have to increase prices to enable them to modernise.
You may like to note that in the last 6 years, daily volumes of post have reduced from 84 million items, to 59 million, still a sizeable number, and one they handle admirably.
We do not like price increases at any time, therefore in line with the intention to make the system easier and more cost effective, they have rewarded their business customers by drastically increasing the discounts they now offer franking machine and franking meter users. The discount on a standard first class letter is now 16pence per item, and for a standard second class item 19pence”.
On the other hand, a spokesperson for DX Group commented:
“Royal Mails prices are now becoming so high that it will change the shape of the mail industry and really hurt smaller businesses that rely on the service Royal Mail provide.
We have been watching closely as Royal Mail has made the changes to the mail structure and now dramatically increased the prices of each of the services.  If you are a business customer who is large enough to have a contract, or who use a franking machine — then you benefit from the slower price rises than those that rely on the retail service.  
However, many of our customers are not fortunate enough to be considered large enough for their own contracts and a significant proportion still use stamps and have therefore been hit hardest by the price increases.  It is these customers and the many others like them in the market, which will benefit from finding an alternative to Royal Mail services — such as DX’s Document Exchange and our other mail services”.
One would assume that DX Group might try to capitalise on the growing discontent with Royal Mail’s price hike but the likelihood is that with prices rising everywhere, including fuel, the services from both Royal Mail and DX Group are themselves victims of the tough economic climate we find ourselves in.
Even at 60p for a first-class stamp, when you think about what you get for your money, the service is valuable — you can send a letter from Land’s End to John O’Groats for 60p.  It would likely cost you more than that to place a telephone call.
What effect will the price hike have on your firm — are you likely to consider the option of a franking machine?
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