No price promises in wake of global rises
RECENT dramatic increases in postal rates around the world could happen again once life settles down post-Covid, said the chief executive of Guernsey Post.
Boley Smillie said the scale of the increases was like nothing he had ever seen before and he hoped it would not be repeated.
‘As we see things settle down later on this year it will be interesting to see the impact on various businesses and organisations and how they recover.
‘I’d like to be able to rule it out in the future ... but I couldn’t.’
Guernsey Post has announced a 7% rise in the cost of stamps for letters to the UK from 7 April (from 68p to 73p), although it has frozen the cost of a stamp for a local letter at 50p.
While there are modifications made to prices every year, Mr Smillie said that generally the company liked to keep increases to below the rate of inflation.
Rises are also based on increases made by the Royal Mail, but this year increases by postal services globally have led to an unprecedented situation where the cost of international mail has risen by 40% in the last year.
Guernsey Post has absorbed half the cost of that rise, said Mr Smillie.
This has been reflected around the world after the governing body which oversees the charges that each country can apply within their jurisdictions has significantly reformed these rates: ‘That means that each country is charging a lot more for delivery within their country.
‘We have absolutely no control over that.’
In some parts of the US the price of mailing certain products has increased by 100%.
Royal Mail has brought in significant price rises in the cost of mail to the UK, where the price of a stamp for a first class letter within the country has risen from 76p to 85p.
Mr Smillie said it is still cheaper to send a letter to the UK from Guernsey than it is to send one within the UK.
It has also impacted on parcels and will affect companies that export to Europe.
‘The bulk mail sector is really important to us and we’re talking to those customers about the impact,’ said Mr Smillie. ‘But we are seeing these price increases everywhere.
‘We always make price increases very, very reluctantly and always go through the discipline of making sure we offset as much of it as we possibly can.
‘But the scale of the rate increases we are facing now is like nothing I’ve ever seen before and whilst we are doing our best, we genuinely can’t control them.’
While the increases will affect all companies, he said that the online shopping giants were big enough to be still likely to continue offering ‘free’ postage, even though it was not, because the company paid the charge and offset it by making money elsewhere by making profit on the product being sold.
