A new survey undertaken by the British Chambers of Commerce has discovered that Royal Mail’s Pricing in Proportion (PiP) initiative has led to an increase in costs for businesses.Pricing in Proportion was introduced by Royal Mail to better reflect the costs involved in handling different sized pieces of mail  in what was claimed  to be a revenue neutral exercise  for them.

For business however the impact of the change has not been revenue neutral.  The BCC survey discovered that:

-          60 per cent of businesses have seen their costs rise since PiP was introduced.

-          64 per cent of businesses say that they have  had to  change or adapt the size of their mail

-          84 per cent of businesses feel that PiP has not simplified the way that their mail is priced.

-          Less than 1 per cent of businesses feel that there has been any improvement made.

Instead of simplifying the postal service the changes have increased costs for Small and Medium sized businesses and seen no corresponding improvement in service.

David Frost, Director General at the British Chambers of Commerce, said:

“Royal Mail has increased costs for businesses and delivered no corresponding improvement in the service they provide.

“Businesses are no longer wedded to just Royal Mail and incidents such as this will drive businesses away into the hands of competitors.  Technology is allowing companies to use online payment methods instead of relying on the post for payment and increasing costs are likely to further increase the move away from the established postal service.   Some small firms have little option but to use Royal Mail however so it is vital that it improves its service and remains competitive on costs”