ParcelPost rates to change to cover increasing costs

26 January 2012
ParcelPost rates to change to cover increasing costs

Increasing costs mean the required postage for sending self-wrapped parcels domestically via New Zealand Post’s ParcelPost service, will increase from March 1, 2012.

ParcelPost postage rates will increase between 5 and 11 percent. During the four years since the last across-the-board ParcelPost postage rate increase CPI inflation has increased by 11 percent, and petrol prices have risen more than 16 percent, along with many other costs.

The reality is that the costs of providing parcel delivery services – in particular fuel costs – have increased markedly since 2008.

New Zealand Post is committed to maintaining parcel postage rates at the low end of the market, and even with this adjustment that will still be the case.

There will be no increase for postage included bags which are currently used by just over half our parcel-sending customers. There will be no increase for Commercial customers on ParcelPost contracts either.

Tracked domestic parcels sent to Rural Delivery addresses

There will be an additional charge for tracked parcels destined for Rural Delivery addresses. The charge of $2.80 to take effect from 1 March is to help cover the high costs of the Rural Delivery network.

It has, in recent years, been common practice for private sector delivery firms to levy an additional charge for parcel delivery to Rural Delivery addresses, to reflect the higher actual costs of delivery. New Zealand Post is adopting a similar approach for similar reasons.

New Zealand Post’s Rural Delivery network involves more than 600 owner-drivers who reach approximately 220,000 locations around the country, covering 96,000kms per day. It is important to have realistic pricing structures to ensure this network is sustainable.

The additional charge will not apply to:

untracked parcels
tracked parcels being sent from a Rural Delivery address to a non-Rural Delivery address.
tracked parcels being sent to a non Rural Delivery address.

It is regrettable that the changes to the ParcelPost postage rates and additional charge for tracked items destined for Rural Delivery addresses have had to be made, however these increases are required to ensure New Zealand Post maintains a sustainable delivery network.

[SUBS NOTE: The range of in-store parcel services being trialled in our Kapiti stores are exempt from the increase and the additional rural delivery charge.]
END

ParcelPost Price Change Q&A

PARCEL PRICING

Q: Are all parcel postage rates going up?

A: No. Tracked and untracked (ParcelPost, Registered and Ready to Go) postage included bags will remain the same price. Customers with ParcelPost contract rates will have their prices held and not receive the increase.

Q: Why are you putting up the required postage rate for sending parcels?

A: The costs of operating a postal network continue to increase – with fuel prices being a prime example. Each year we have more addresses to deliver to, and lower total volumes of mail (2001: 1 billion items, 2010: 800 million items) – so we need to ensure we cover our costs.

Q: How big will these parcel postage rate increases be in real terms?

A: We’re talking cents, not dollars. For example the postage rate to send a 3kg package, depending on size, will rise by between 20 and 60 cents. Sending a 5kg package (again depending on size) will cost between 30 and 70 cents extra.

Q: What about high volume customers such as high volume TradeMe traders and businesses?

A: Customers with ParcelPost contract rates will have their prices held. Anyone who sends an average of 10 or more parcels per week should consider getting a New Zealand Post account as discounts may be available. See our website for details: www.nzpost.co.nz/account or call us on 0800 501 501 to discuss your business requirements.

Q: Is the increase about generating income?

A: The increase is designed to ensure we cover our increased costs.

Q: How can you say this is the first parcel postage rate increase across the board in four years – didn’t parcel postage rates go up in October 2010?

A: We changed some of the required postage rates in October 2010 to facilitate the increase in GST from 12.5% to 15%. So it was just the standard adjustment many companies made at that time – and did not generate extra usable funds (with the increase going straight into GST provisioning). The last time we put up parcel postage rates across the board – in the sense of increasing what New Zealand Post gets - was on 28 March 2008.

SENDING TRACKED PARCELS TO RURAL DELIVERY ADDRESSES
Q: Why is this additional charge being introduced for sending parcels to RD addresses?
A: Because it more realistically reflects the high costs of delivering to Rural Delivery areas. Other delivery services (such as private sector couriers) have levied an additional charge for delivering to RD addresses for quite some time.

Q: Does this affect all parcel deliveries?

A: No. For example it does not affect the price for tracking parcels which are being sent overseas – it only applies to domestic RegisteredPost and tracked and couriered parcels. The following table indicates when the new Rural Delivery charge would apply: TRACKED PACELS

Sending from: To: Delivery Charge
RD area RD area Yes
RD area Non RD area No
Non RD area RD area Yes
Non RD area Non RD area No
UNTRACKED PARCELS – No Rural Delivery charge

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