Rising ATF prices: Good news for postal dept, bad for pvt couriers

As all airlines have raised carriage charges, private couriers have increased their tariffs 8-20 per cent. India Post, on the other hand, has not tinkered with its tariffs at all.
As a result, India Post's tariff is 70 per cent cheaper for domestic destinations and 30 per cent cheaper for international destinations.
For example, to carry a 500 gm package from Delhi to Mumbai would cost Rs 30 through India Post, while private courier companies like DTDC Courier and Cargo charge over Rs 53, a difference of over 75 per cent. The same is the tariff differential between New Delhi and Bangalore.
In the international market too, to send a 500 gm package to the US through DTDC would cost over Rs 860, which includes courier rate, fuel surcharge and service tax. In comparison, India Post charges Rs 640, a saving of 34 per cent for the customer.
Department of Posts officials said this would help them raise volumes, more so since any tariff hike will not happen till the next Union Budget in 2009. When asked if this will burn a hole in the department's pocket, the officials said India Post was still making money on its courier service.
Some private courier service operators said they do not see any huge swing of business in favour of India Post.
14/07/08 Bijith R & Ishita Russell/Business Standard

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Categories: Cargo Jul 2008