Royal Mail pilots a parcel price drop

Royal Mail is to reduce the costs of sending a second class parcel for a pilot project. The online price reduction is for second class medium parcels between 2-5kg.

Between the 17 July and the 16th October online customers will pay £6.29, reduced from £13.75 for the second class parcels in question.

Royal Mail is to reduce the costs of Signed For medium parcels as well. This will be dropped from £14.75 to £7.29 for each unit sent.

A spokesperson for Royal Mail said, “The trial is designed to test the popularity of this price point rather than being a trial of the online channel. We’re offering this trial price point online simply because it makes it easier for us to execute.”

The drop in price would put the cost of a medium Royal Mail parcel at roughly the same cost as that of a leading courier. It is a significant drop for the postal operator and is also a lot cheaper than the Royal Mail First Class equivalent.

It will be interesting to see whether volumes increase, given that online sellers will try to avoid sending parcels by Royal Mail when they can save a good sum of money by sending through one of the postal operator’s competitors. The cost reduction may well be an acknowledgement of the competition Royal Mail faces and ultimately, if followed through from pilot, be an opportunity for the company to go head to head with its rivals in the parcels market. Apex Insight will report when Royal Mail does.
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