NZ Post hikes international postage charges, changes the way it calculates prices

Inside NZ Post's distribution centre in Highbrook, Auckland. Photo / Dean Purcell

NZ Post has increased the price of international postage in response to a global decrease in air freight options as a result of the Covid-19 pandemic.

Along with the domestic postage increase of 7 per cent, or 10 cents, this year, the state-owned enterprise has changed the way it charges for letters and parcels being sent overseas.

Charges will now be based on the size of the item, or volumetric weight, rather than its actual weight.

A spokeswoman for NZ Post said the new charges were calculated by measuring height x length x depth x 200, in line with how airlines were charging because of the lack of space on flights.

The new system and prices for international postage started on September 16.

"Due to Covid-19 there are less flights running around the world, and as a result there is much less space available. This means the cost of airfreight has increased significantly and we have had to pass on some of this additional cost by increasing the price of international postage," the spokeswoman told the Herald.

"This decision has not been made lightly, particularly given the impact of Covid-19 and the challenges we know many are facing throughout New Zealand."

She said NZPost reviews its prices every year and usually increases them to cover rising
costs.

As well as changing the way it calculates the cost of sending an item, a $5 service fee has been added to cover the cost of NZ Post now needing to collect sender, receiver and parcel content information from Customs notes for border security and clearance purposes.

Retail NZ chief executive Greg Harford said it was not surprising that the cost of international postage had increased as fewer planes were coming in and out of the country.

"We've seen domestically too, some quite big increases for domestic courier services, which is a bit more of an issue for retailers as it is costing more for them to fulfil orders from customers and get products delivered around the country," Harford said.

Increases to postage costs made it harder for retailers to offer free shipping, which customers were always very keen on, and was often used as a unique selling point to encourage spending, Harford said.

Postage was expensive "at the best of times", he said, and any additional costs would be passed on to consumers.

"One of the big challenges for New Zealand e-tailers in particular is that because our market is small we don't necessarily have the volumes to drive those costs down.

"New Zealand is a hard place to navigate around - a very long, thin country with a light population density, so that makes it quite expensive to operate delivery services at the best of times. We are seeing cost increases coming through and most businesses will be looking to pass those on to customers."

NZ Post said a wider range of products and services were available for business customers and encouraged organisations to get in touch "to find a solution that keeps costs down".