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Isle of Man Post to introduce new Pricing in Proportion structure 16 June 2006

Isle of Man Post will be introducing a new pricing structure called Pricing in Proportion on 21 August 2006.

Pricing in Proportion (PiP) takes into account the size and shape as well as the weight the mail. At present, postage is dependent entirely on weight, which does not reflect the true handling costs of Isle of Man Post. Smaller items are less expensive to sort and process, it is therefore logical that they should cost less to send; bulky items require greater manual input therefore attract a higher cost. This is the principle behind ‘Pricing in Proportion’, a system that brings prices into proportion with costs, taking into account both weight and size.

For the majority of customers, the new system will make little difference: more than 90% of mail currently posted falls into the ‘letter’ category. The price for sending a ‘letter’ will remain the same – 28 pence for local delivery and 31 pence for delivery to the UK and Channel Islands. With the new structure, these customers will have the advantage of being able to send up to 100 grams for this price, up from the current 60 grams. Those customers currently sending a 100 gram letter will make a saving of 8 pence on a local letter and 14 pence to the UK and Channel Islands.

The full details of confirmed posting prices from 21 August are now available on www.iompost.com and Isle of Man Post is sending the new PiP price information to its business account customers throughout June. The new structures are for mail posted on the island for Isle of Man and UK addresses only. International mail, Parcelforce and Special Delivery services are not affected.

Mrs Pamela Crowe MLC, Chairman of Isle of Man Post,

“Following public consultation in Autumn 2005 and DTI approval on rates in May 2006, Pricing in Proportion is being introduced in line with changes being made by Royal Mail to better reflect the cost of collecting, sorting and delivering mail. The new prices, which will apply from 21 August, are available now so that customers have time to prepare for the changes and to identify potential benefits.

We are also taking the opportunity to simplify the pricing structures – instead of the current 15 different weight-based tariffs (both local and UK) there will be just 10 options, making the tariffs simpler to use. We are implementing an awareness campaign to support the introduction of Pricing in Proportion. Our Business Relationship Team will be visiting key business contacts and we are currently expanding the awareness campaign to communicate to the general public.

Our aim is to assist with these changes as much as possible. In particular for businesses to help them identify and benefit from any potential cost savings. For example, business could reduce their postage costs by folding A4 items in half and posting in a C5 envelope, so that they are priced under the new ‘Letter’ category.”

Further information about Pricing in Proportion can be found at Isle of Man Post’s website www.iompost.com/pricing.xml or via our Business Relationship Team, telephone 698444 and email: info@iompost.com

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