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.
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Some private courier service operators said they do not see any huge swing of business in favour of India Post.
"The tariff is not the only factor that a customer looks for; he looks at other value propositions like reliability, safety, transit time and the efficiency that we offer," said Chandrashekhar Pitre, head of marketing, DHL.
Meanwhile, India Post is gearing itself for a makeover to provide stiff competition to the private courier services.
"People have the perception that India Post is complacent in its working. We are trying to change this mindset. So to improve our image we are now directly going to customers and offering our services as compared to expecting them to come to us, we have a wide range of service for them to choose from," says an official from the postal department.
Admitting that a lot of companies were not aware of the service offering provided by the department of post, the official said, "We are now looking at strengthening our marketing and sales by making the potential customers aware of the services we provide."