MASSIVE INCREASE IN DEMAND FOR FIRST AND SECOND CLASSS STAMPS PROVES TO BE NO SOURCE OF JOY FOR ROYAL MAIL
April 2012 could well be seen as a turning point in the history of the Royal Mail.
A recent series of what could be calamitous events began with an announcement that first class postage rates would go up from 46p to 60p and second class stamps would rise from 36p to 50, nearly a 39 percent increase at a time when British inflation is about 3 percent.
Royal Mail officials went on TV to proclaim blandly that the increase, while it might on the surface seem large, was necessary to stem increasing losses and maintain universal postal deliveries. They added that as the "average" household only spends about 50p a week on postage, the increases would have little impact.
They couldn’t have been more wrong. The British public -- recently spooked by the threat of a petrol tanker drivers’ strike and government advice to stock up, resulting in massive queues for fuel – immediately went out and cleared the post offices of first and second class stamps. These will still be valid for the inscribed services after the increase.
The Royal Mail, in its infinite economic wisdom, of course, had no idea this would happen. Rather than increase supplies it sought to ration them. Businesses were told they could have only small increases in their usual purchases. My village post office has been told it will get more stamps soon, but even if the promised supplies do arrive, and I have doubts that they will, they will immediately vanish.
The philatelic bureau has been just as heavily affected. A month before the increase was due I sent in an order for a business roll of 100 second class stamps, which my wife uses, and for mini-sheets, which happened to contain a fair number of first class stamps. The order failed to materialize and the money wasn’t taken from my account.
Fearing that the philatelic bureau would wait until after the price increase to fill my order – I phoned up to say that either my order had to be filled at the prices valid at the time I made it, or cancelled. I should say I tried to phone the philatelic bureau, for twice I was cut off before I so much as reached a real human voice. I e-mailed the philatelic bureau with the same crushing news, and received an automatic response that my inquiry would be handled within a not exactly record-setting ten days – which is after the postal increase, as it happens.
Nearly a month later I received another e-mail saying: "Unfortunately due to a download problem only part of your message was received and as a result the nature of your enquiry is unclear. Only if the matter has not yet been resolved would I be grateful if you could resend the message directly to us …" I resent my original e-mail, which prompted an e-mail saying my message would be replied to within 14 days. At the time of writing 13 days have passed and I have not heard back.
The Royal Mail will presumably take another financial hit thanks to the logjam because it is one of the increasingly few postal authorities to take orders for first-day covers only up to the day of issue. Of course, I would not put it past executives to work out a way to handle first day cover orders while neglecting those for mint stamps.
However all of this is just the beginning. People will not accept the massive postage increases happily, but will accelerate their use of alternatives. Instead of 10 percent increases in postal volumes annually, the Royal Mail will likely suffer 20 or 30 percent declines, only increasing its deficits.
Long-suffering collectors, putting up with ever-increasing numbers of stamps with excessive face values not designed for postal usage, will see this as another blow and many will stop collecting mint stamps. Prestige booklets, a popular collecting area for some time, are facing a backlash because they now longer are sold at face value, and Stanley Gibbons says that if it followed its new issue guidelines to the letter these booklets would lose full catalogue status.
Many collectors stopped buying mint stamps at the dawn of the Millennium and so many more have stopped since that the Royal Mail has finally admitted it needs to listen to collectors and issue fewer values.
In a recent mailing, which of course cost thousands, to collectors to announce that the Royal Mail would issue "instant" stamps for British gold medallists in the upcoming London Olympic Games, postal authorities revealed that several other issues would be delayed so collectors’ pocketbooks wouldn’t be so hard hit.
Like a lot of collectors, I am annoyed and more than a bit worried about the financial impact of the postage rate increases, for I have a large postage bill. However, like many, to a large extent be shielded from the blows because I buy discount postage. The wholesale rate for mint stamps in Britain is 75 per cent, and falling, as ever more quantities of mint collections are coming on to the market. In a recent postal auction without buyers’ fees, for instance, I bought some £230 ($368) worth of unmounted mint sets for £150 ($240), and even a large postage fee failed to make much impact in my bargain of 63 per cent of face value.
Yet demand for postal services remains high. The queue in the post office in Montrose, the town in north-east Scotland near where I live, is always long – although this a lot to do with cutting of costs and staff. Furthermore, the Royal Mail does itself no service by only putting a small number of commemorative stamps on sale in post offices, and for limited periods.
The Royal Mail is, to be sure, between the proverbial rock and a hard place, as it has the massive costs of universal mail delivery to cover, even as its rivals cherry pick the most profitable postal services thanks to European laws designed to increase competition in the postal marketplace.
The Royal Mail, like virtually all national postal operators around the globe, has much higher labour and overhead costs than its ultra-slim competitors. Occasionally I receive a private parcel delivered by a local lady with her little girl in tow. Neither mum nor child is likely to be getting much in the way of fringe benefits.
The only good I can see coming out of all of the price rise fiasco is if the Royal Mail and the current government, which likes to wave the wand of market forces as a cure-all for evils, are forced to take a new tack. Not until they treat postal services for what they are – a necessary and expensive part of daily life that really can’t be expected to turn a profit – will they halt the current vicious cycle.
Update: In one small bit of evidence, my post halved the first week after the increases of nearly 50 percent in some categories, such as the basic second class rate, and his been running at about two-thirds of normal amounts since. Repeated across the country that would spell disaster for Royal Mail.
Despite a month’s notice of the new rates, brochures listing them did not arrive at my village post office until after they were in effect.
It now appears my order for plan-ahead order for stamps to beat the was lost, which does nothing to create a warm feeling about Royal Mail as I used a Philatelic Bureau prepaid envelope.
Editor’s note: This article appeared originally in a slightly different form as one of my Commonwealth Communiqué columns for Canadian Stamp News, an excellent publication of interest to all collectors in Canada and those who collect Canadian stamps.
A recent series of what could be calamitous events began with an announcement that first class postage rates would go up from 46p to 60p and second class stamps would rise from 36p to 50, nearly a 39 percent increase at a time when British inflation is about 3 percent.
Royal Mail officials went on TV to proclaim blandly that the increase, while it might on the surface seem large, was necessary to stem increasing losses and maintain universal postal deliveries. They added that as the "average" household only spends about 50p a week on postage, the increases would have little impact.
They couldn’t have been more wrong. The British public -- recently spooked by the threat of a petrol tanker drivers’ strike and government advice to stock up, resulting in massive queues for fuel – immediately went out and cleared the post offices of first and second class stamps. These will still be valid for the inscribed services after the increase.
The Royal Mail, in its infinite economic wisdom, of course, had no idea this would happen. Rather than increase supplies it sought to ration them. Businesses were told they could have only small increases in their usual purchases. My village post office has been told it will get more stamps soon, but even if the promised supplies do arrive, and I have doubts that they will, they will immediately vanish.
The philatelic bureau has been just as heavily affected. A month before the increase was due I sent in an order for a business roll of 100 second class stamps, which my wife uses, and for mini-sheets, which happened to contain a fair number of first class stamps. The order failed to materialize and the money wasn’t taken from my account.
Fearing that the philatelic bureau would wait until after the price increase to fill my order – I phoned up to say that either my order had to be filled at the prices valid at the time I made it, or cancelled. I should say I tried to phone the philatelic bureau, for twice I was cut off before I so much as reached a real human voice. I e-mailed the philatelic bureau with the same crushing news, and received an automatic response that my inquiry would be handled within a not exactly record-setting ten days – which is after the postal increase, as it happens.
Nearly a month later I received another e-mail saying: "Unfortunately due to a download problem only part of your message was received and as a result the nature of your enquiry is unclear. Only if the matter has not yet been resolved would I be grateful if you could resend the message directly to us …" I resent my original e-mail, which prompted an e-mail saying my message would be replied to within 14 days. At the time of writing 13 days have passed and I have not heard back.
The Royal Mail will presumably take another financial hit thanks to the logjam because it is one of the increasingly few postal authorities to take orders for first-day covers only up to the day of issue. Of course, I would not put it past executives to work out a way to handle first day cover orders while neglecting those for mint stamps.
However all of this is just the beginning. People will not accept the massive postage increases happily, but will accelerate their use of alternatives. Instead of 10 percent increases in postal volumes annually, the Royal Mail will likely suffer 20 or 30 percent declines, only increasing its deficits.
Long-suffering collectors, putting up with ever-increasing numbers of stamps with excessive face values not designed for postal usage, will see this as another blow and many will stop collecting mint stamps. Prestige booklets, a popular collecting area for some time, are facing a backlash because they now longer are sold at face value, and Stanley Gibbons says that if it followed its new issue guidelines to the letter these booklets would lose full catalogue status.
Many collectors stopped buying mint stamps at the dawn of the Millennium and so many more have stopped since that the Royal Mail has finally admitted it needs to listen to collectors and issue fewer values.
In a recent mailing, which of course cost thousands, to collectors to announce that the Royal Mail would issue "instant" stamps for British gold medallists in the upcoming London Olympic Games, postal authorities revealed that several other issues would be delayed so collectors’ pocketbooks wouldn’t be so hard hit.
Like a lot of collectors, I am annoyed and more than a bit worried about the financial impact of the postage rate increases, for I have a large postage bill. However, like many, to a large extent be shielded from the blows because I buy discount postage. The wholesale rate for mint stamps in Britain is 75 per cent, and falling, as ever more quantities of mint collections are coming on to the market. In a recent postal auction without buyers’ fees, for instance, I bought some £230 ($368) worth of unmounted mint sets for £150 ($240), and even a large postage fee failed to make much impact in my bargain of 63 per cent of face value.
Yet demand for postal services remains high. The queue in the post office in Montrose, the town in north-east Scotland near where I live, is always long – although this a lot to do with cutting of costs and staff. Furthermore, the Royal Mail does itself no service by only putting a small number of commemorative stamps on sale in post offices, and for limited periods.
The Royal Mail is, to be sure, between the proverbial rock and a hard place, as it has the massive costs of universal mail delivery to cover, even as its rivals cherry pick the most profitable postal services thanks to European laws designed to increase competition in the postal marketplace.
The Royal Mail, like virtually all national postal operators around the globe, has much higher labour and overhead costs than its ultra-slim competitors. Occasionally I receive a private parcel delivered by a local lady with her little girl in tow. Neither mum nor child is likely to be getting much in the way of fringe benefits.
The only good I can see coming out of all of the price rise fiasco is if the Royal Mail and the current government, which likes to wave the wand of market forces as a cure-all for evils, are forced to take a new tack. Not until they treat postal services for what they are – a necessary and expensive part of daily life that really can’t be expected to turn a profit – will they halt the current vicious cycle.
Update: In one small bit of evidence, my post halved the first week after the increases of nearly 50 percent in some categories, such as the basic second class rate, and his been running at about two-thirds of normal amounts since. Repeated across the country that would spell disaster for Royal Mail.
Despite a month’s notice of the new rates, brochures listing them did not arrive at my village post office until after they were in effect.
It now appears my order for plan-ahead order for stamps to beat the was lost, which does nothing to create a warm feeling about Royal Mail as I used a Philatelic Bureau prepaid envelope.
Editor’s note: This article appeared originally in a slightly different form as one of my Commonwealth Communiqué columns for Canadian Stamp News, an excellent publication of interest to all collectors in Canada and those who collect Canadian stamps.
posted by Chad Neighbor at
5.6.12
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