Wednesday, 8 April 2015

PiP Goes International

This is the first of three posts on the new tariff.

Now that we are over the shock of £14 in new Machins... (we are over the shock, aren't we?) let's look at the changes in international air mail rules that took effect on March 30 with the new tariff. These changes are significant and help explain why there are so many new Machins and why they have such high values.

To see how we got here, we have to hop back to 2006. That year, Royal Mail introduced Pricing in Proportion for UK domestic mail. In brief, PiP means that both the weight and size of an item are considered in calculating the cost to mail the item. PiP introduced the concept of a "large letter," an item that meets certain size and weight criteria. Large letters fit between standard letters, which are called simply "letters," and packets. 

International mail was not affected by PiP. At the time, there were letters and small packets. The distinction between the two related to contents not size: packets could contain gifts, goods, or samples, with an accompanying letter. Small packets had a single price up to 100g and then increased in 20g steps to 2kg. Starting around 60g, the postage rate for a small packet was less than for a letter of equivalent weight. Printed papers were treated similarly to packets and cost even less. (Starting in 2007, printed papers and small packets cost the same.)

Jump forward to 2012, when big changes occurred for international mail. The price for a packet up to 100g to Europe was now much higher than a 100g letter, and a packet up to 100g to the rest of the world was the same as a 100g letter. Prices for packets over 100g jumped significantly, erasing the discount in relation to letters. In fact, letters over 100g were now priced the same as packets. This meant a large increase for letters just over 100g, but a small increase or even a significant decrease for heavier letters.

Another change in 2012 was that letters and small packets over 100g sent to rest of the world zone 2 now cost more than zone 1. The definition of a packet didn't change, but it was moot for any item over 100g. 

In 2013, packets morphed into parcels, but there were no changes other than a general increase in rates. 

Major changes occurred again in 2014. Letters were limited in size and weight the same as domestic mail: length up to 24cm, width to 16.5cm, thickness to and including 0.5cm and weight to 100g. Anything exceeding one of these limits was priced as a small parcel. 

This was a partial implementation of PiP, although Royal Mail didn't highlight it as such. Items affected were those letters that were large but weighed under 100g - these now had to be sent using the higher small parcel rate. 

Also in 2014, different rates for rest of the world zones 1 and 2 were extended to small parcels under 100g.

That brings us to 2015 and a full implementation of PiP for international mail. As with domestic mail, items are divided into three classes: letters, large letters and small parcels (including printed papers). The size limits for letters remains the same as last year.

International large letters have the same limits as domestic large letters: length up to 35.3cm, width up to 25cm, thickness to and include 2.5cm and weight to 750g. Large letters have different prices for rest of the world zones 1 and 2. Any item exceeding one of these limits is priced as a small parcel.

The introduction of large letters leads to the increase in the number of Machins. Three of the new Machins pay the rates for the new large letters up to 100g: £2.45 for Europe, £3.15 for world zone 1, and £3.30 for world zone 2.

The other three new Machins replace older ones for letters. The £1.33 replaces the £1.28 for world up to 20g. The 60g weight step has been eliminated, and rates for 100g have been reduced to what the new 60g rates would have been. The £1.52 for 100g to Europe replaces the £1.47 for 60g, and the £2.25 for 100g to rest of the world replaces £2.15 for 60g. (Remember that letters have the same rate for both rest of the world zones.)

We were saved from having two additional Machins. There is no replacement value for the 81p that paid the international economy rate (previously known as surface mail); the new rate is 85p. The rate for 20g letters to Europe and 10g letters for rest of the world is now £1 (formerly 97p), and there's an existing Machin for this denomination. A dedicated stamp for that weight step will probably be issued again next year.

I'll have more to say about weight steps in the next post.


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