The Hindu Business Line : Speed Post intra-city rates slashed by 40%

New Delhi June 11 The Department of Posts on Monday revised its tariffs for Speed Post service whereby sending packets within a city has become cheaper by 40 per cent even as couriering parcel over long distance has become dearer.

The DoP has reduced rates of local Speed Post for packets weighing less than 50 g by 40 per cent. A 50-g packet can now be sent anywhere within a city for Rs 12 instead of Rs 20 being charged at present. The move is aimed at capturing market share from private courier companies, which are already offering local delivery at around Rs 10 for a 50-g packet. The move comes even as DoP is facing a Budget deficit of nearly Rs 1,400 crore.

Mr John Samuel, General Manager, Department of Post, however, said that the tariff reduction will not have any impact on DoP's revenues as volumes are expected to grow. "When we launched One India tariff, we saw a 45 per cent increase in traffic. We are expecting a similar surge in our local post traffic, which until now has been dominated by private courier firms."

Distance slabs

The Postal Department has, however, increased the tariff for long distance Speed Post service for higher weight categories. A 500-g packet to be sent over 2,000 km will now cost Rs 80 instead of Rs 70 at present. Similarly, a 500-g packet sent to a destination that is over 1,000 km away will now cost Rs 70 instead of Rs 60. The department blamed the increase in transportation costs for the hike in long distance Speed Post tariffs. The revised tariffs will come into effect from today.

Though Mr Samuel said that DoP's tariffs are cheaper than the rates offered by private courier, the increase in tariffs has put it at par with private players. DTDC, for instance, also offers to carry a 500-g packet over distances beyond 200 km for Rs 80. DoP, however, has more number of distance slabs where it offers to carry the same packet for distances less than 1,000 km for Rs 45. It earned Rs 449 crore in 2006-07 from the service.