rate slash

New Delhi, June 11: Sending letters by the local Speed Post has become cheaper, thanks to competition from courier companies.

Starting today, sending letters weighing up to 50 gm will cost Rs 12, against the Rs 20 charged so far.

This means a rate slash of over 40 per cent. The revised tariffs include service tax and education cess.

“With this revision, Speed Post will be quite competitive in the express industry,” said John Samuel, general manager in the department of posts.

“Speed Post articles booked in and destined for Delhi, Ghaziabad, Noida, Gurgaon and Faridabad will be treated as ‘local’ for the purposes of Speed Post tariff,” he added.

Articles meant for the same town will be delivered the same day or the next working day.

There has, however, been no change in the “One India One Rate — Speed Post” plan, launched last August. This allows people to send letters weighing not more than 50 gm anywhere in the country for Rs 25.

The department of posts is hoping the rate cut will give private courier companies such as BlazeFlash, DTDC and XPS a run for their money.

But a senior DTDC official downplayed the cut.

“There will not be much impact on our business because we have a set client base that looks beyond just lower tariffs.”

Courier companies charge between Rs 25 and Rs 80 for delivering a 50-gm letter within the country and between Rs 10 and Rs 20 for local letters. They also negotiate on-the-spot special deals for bulk carriages.

Courier companies are, however, facing a threat from the new draft postal bill. The bill proposes to restore the post office’s 150-year monopoly on letters weighing up to 150 gm by shutting out private couriers.

Courier companies have been doing good business in this segment and are unwilling to give it up. They have begun lobbying to stall the bill or modify it.

Samuel said there had been some increase in rates for slabs above 50 gm for certain distances.

For instance, to send letters weighing over 50 gm to a distance of 2,000 km and above, customers will have to pay Rs 60 instead of the Rs 50 so far.

Speed Post services, launched in 1986, have a market share of 27 per cent and posted a revenue of Rs 449 crore during 2006-07. The services are available at over 1,200 locations.