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Many may be Hit by NZ Post ‘Pricing in Proportion'

Media Release

Many Businesses may be Hit by new NZ Post ‘Pricing in Proportion’ System

AUCKLAND, 31 March 2008 – The cost of sending domestic letters and parcels through New Zealand Post has just changed. In some extreme cases there will be increases of up to 300% claims the other major player in the market.

Freightways Limited, which specialises in the express package and business mail market, believes NZ Post’s new ‘Pricing in Proportion’ system introduced last Friday (March 28) will have caught a number of customers unawares.

According to Freightways, while sending regular DLE or similar sized letters will not incur a price increase if they are 6mm or less in thickness, the same letter, just 1mm thicker, doubles in price from 50c to $1.00.

And for some businesses a foolscap sized parcel item under 500g in weight and between 21-50mm thickness, is increasing from the previous $2.00 Packet Post price to a new $6.00 Parcel Post price – a staggering 300% increase! Packet and Parcel Post products in particular have been affected by a number of significant price increases as the previously straightforward pricing system is being replaced by a complex, confusing and more expensive system.

“These increases from NZ Post have the potential to hit New Zealand businesses hard at a time when they can least afford it,” says Freightways Managing Director Dean Bracewell.

“Freightways group is pleased to be able to offer the business community competitively priced alternatives to NZ Post through our New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers and DX Mail brands.”

As these price hikes close the gap between standard post pricing and courier rates, many companies will look to increase the business they do with courier-service providers. In doing so, a business would also enjoy the added benefits of door-to-door pickup and delivery, item tracking, and much higher insurance protection.

Allen Calendars Ltd is one company whose regular deliveries will be affected by the new system. General Manager, Peter Goulter, says, “The new size and weight restrictions being introduced under New Zealand Post’s proportional pricing system will see a portion of our current range categorised as Parcel Post. The expected increase in delivery cost to our customers gives us no choice but to explore other options. Express courier products and services may now be a viable option for us, where they were not the most economical option before.”

Scholastic New Zealand Ltd has recently moved its parcel freight business to Castle Parcels, says Neil Welham, New Zealand manager. “After a recent decision to move our general business parcel freight to Castle Parcels we discovered that a viable alternative to the postal network could be found in the Freightways group’s courier networks to support our operation,” he says. “Given the changes forced on us through the proportional pricing system we are seriously considering the courier options available to us to help us grow the business while maintaining necessary cost controls and remaining competitive”.

“We believe that users of NZ Post’s services will start to monitor their postal costs closely over the coming months,” says Dean Bracewell. “These businesses will no doubt explore the other options on offer and might be pleasantly surprised at the alternatives offered by the Freightways group of companies.”


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