Whilst we are all enjoying the August holiday break the most far reaching shake up in postal services for half a century will take place.

PIP (Pricing in Proportion)

What is Pricing in Proportion?
Currently, the cost of sending mail is based purely on the weight of the item being sent. When Pricing in Proportion is introduced, you will also need to take the size, length and thickness of the item into account when considering the cost of postage. The key principle of this new system is that smaller, lighter items will cost less to send than larger, heavier ones.

When is Pricing in Proportion being introduced?
This new concept is being introduced by the Royal Mail on Monday August 21st 2006 and will affect everyone who sends mail.

Why the change?
It costs Royal Mail more to sort, handle and deliver larger envelopes and items than they are currently charging customers to send. Large and irregular shaped packages take up more space in postbags and vans and cost more to handle. This means that most light but bulky items are priced below cost, whereas smaller, heavier items are generally overpriced. Royal Mail is changing their pricing system to more accurately reflect their costs.

Who will be affected?
All Royal Mail customers will be affected, but Royal Mail estimate that over 70% of mail will not change in price.

From Monday 21st August 2006 mail will fall into 3 categories:

Letters - Includes items slightly bigger than A5, half the size of A4.
Large Letters - Larger envelopes up to slightly bigger than A4 size.
Packets - Anything else outside of these boundaries.

For the first time royal mail pricing will not only be governed by weight but also by size. You will mainly be able to tell which category your mail is in by the size of the envelope, but you will also need to consider the item's thickness and weight.

Pricing in Proportion will mean changes to your daily routine as mail will need to be sorted into 3 categories; Letter, Large Letter, Packet.

With less than 50 days to the changeover AMC advise all businesses to review their current mail formats as there will be opportunities to change the way that you do business and ultimately make cost savings.