Iceland Post raises letter rates to reflect actual costs

Iceland Post says its revised postage rates reflect actual costs, according to a submission to Byggðastofnun cited by mbl.is. The increases took effect at the end of last month.

Postage for the most common category, letters weighing up to 50 grams, rose by 4.3%. The rate for letters weighing 51 to 250 grams increased by 4.7% to 445 Icelandic krónur, while the rate for letters weighing 251 grams to 2 kilograms rose by 4.9% to 755 krónur.

The same rate for letters weighing up to 50 grams applies throughout Iceland, as required by the Postal Services Act. The same applies to the other two weight categories. Iceland Post says there is no basis for dividing the rates by region because the number of letters in those categories is small.

Universal service requires the same postage to apply across the country, regardless of the cost of delivering letters to recipients. The provider of the universal service, in this case Iceland Post, must give Byggðastofnun sufficient reasons for changes to the universal service tariff.

The submission says the law does not explain what constitutes sufficient reasoning. However, explanatory notes to the provision state that changes must comply with the fundamental principles governing postal services.

Those principles include keeping universal-service charges affordable for users and setting rates according to actual costs plus a reasonable profit. The tariff must also be easy to understand, and the principles of equal treatment and transparency must be observed.

Iceland Post says that as the number of letters has declined, its turnover has also fallen considerably. The company has closed traditional service locations, installed post boxes instead, changed its distribution arrangements and reduced its staff, among other measures.