"On May 14, buying a stamp to mail a first-class letter will cost two cents more: you'll pay 41 cents, up from 39 cents. That's not huge price hike for door-to-door delivery of a greeting card, but businesses and organizations that rely on mass mailings to advertise or communicate with their memberships are likely to see a bigger hit in postage costs. Standard mail, formerly known as bulk business mail, will increase an average of 9.3 percent. Direct mail marketing pieces, newsletters or flyers are often classified as standard mail. In addition, on July 15, the cost of sending periodical flats, such as magazines and newspapers, is set to increase as much as 40 percent.
The new postal rates and rules, unlike any other rate case in recent memory, provide for sweeping changes based upon the actual cost to transport, process and deliver different classes and sizes of mail. Previously, weight was the major factor in determining postage costs. Now, the shape of the mail plays a greater role.
Shape-based pricing allows for greater automation and efficiency once a mailed piece enters the U.S. Postal Service mailstream. The changes allow the Post Office to operate in the black. While many in the mailing industry agree the changes are long overdue, it does not lessen the impact for business mailers. The rate case was approved by The Postal Board of Governors on March 19, with the exception of three items that the Postal Regulatory Commission (PRC) was advised to reconsider. The technical term is "allow under protest," meaning the rate case will proceed as planned unless the PRC changes its position. The three items involve: standard mail flats, the nonmachinable surcharge for first-class mail letters (letters that do not fit automated systems) and the priority mail flat rate box.
What does the new rate structure mean to companies in Lexington? "It's a good time to re-evaluate your mailing history. Look at what you've done in the past and determine whether or not you need to redesign future mailing," said Lee Amos, Direct Response, Inc. "A lot of our customers are already using mailers that fit the new size specifications. The biggest impact on the design of a mail piece is its length and height, or aspect ratio. The thickness of a mail piece, how it folds and tabs, and the location of the address will factor in the cost of mailing, as well." According to Amos, the industry is preparing for the changes, including adopting new software to adjust to the pricing and sorting requirements.
John Young of Bluegrass Mailing and Fulfillment Services said the rate change may benefit some organizations that send large quantities of mail. Young worked out specifications using a 5,000-piece mailing with local delivery for a letter-size piece. Using those specs, nonprofits will have a postage savings of about $30. Yet, for the same mailing, a for-profit company will spend approximately $15 more in postage. According to Young, the new, shape-based pricing is just one factor in the cost computation. "A lot of the pricing is based on the cost to distribute. Depending on their mailing area, local businesses may not see much of a difference. For others, the increase may be more significant."
Prepare for postage increases
Lexington Postmaster Clyde Barton wants customers to know the Postal Service is ready to help guide them through the changes brought about by the rate case. "Our goal is to show mailers there are opportunities for lessening the financial impact of the rate case," said Barton. "We'll have numerous training sessions for our permit mailers here at the main post office. We'll also offer training through our Postal Customer Council, which is geared toward business mailers, and the Consumer Advisory Council, which is geared toward individuals and independent professionals."
In a recent publication, the operating chief of Pitney Bowes, Inc., Murray Martin, suggested four steps that companies can take to adjust to the new postal rates.
Plan the mail piece. The rate changes create an opportunity for savings through proper mail piece planning. For example, the second ounce of a first-class letter will be less expensive than the first ounce, so mailers who combine information from two different mailings into a single mailing can save money.
Pay attention to shape. There is a strong financial incentive to switch from flat (9x12-inch) envelopes to standard #10 envelopes, reflecting the Postal Service's lower costs for processing the smaller envelopes.
Capitalize on discounts. Presorting the mail before it enters the postal network can result in double-digit percentage discounts. Partnering with a high-quality mailing presorter can help companies get the most out of discount incentives.
Cleanse addresses. The Postal Service estimates it spends nearly $2 billion each year handling mail that cannot be delivered as addressed. Address quality is imperative to cost efficiency.
"Companies need to start mailing smarter," said Bill Nichols of Bluegrass Mailing. "Last year, we rolled out a customer education program and a weekly Web seminar to help designers and companies get on board and think in terms of what types of mail pieces are best handled by automation." Nichols said there is concern anytime a postage increase occurs that some businesses, especially small companies, may have financial difficulty working direct mail into their marketing plans. "We're helping our customers find options that work for them, like combining a print mailing with e-mail communications."Postmaster Barton encourages customers to take every opportunity to educate themselves on the May 14 changes. Complete information is available at www.usps.com/ratecase. Permit holders will receive letters of invitation to training classes at the Nandino Post Office.
For more information on the Postal Customer Council and Consumer Advisory Council, contact Susan Wright at (859) 231-6765 or susan.w.wright@usps.gov.
Did you know?
Some of the rates taking effect May 14 include:
Letter: 41 cents for the first ounce, up from 39 cents
Postcard: 26 cents, up from 24 cents
Bank statement: 2 ounces, presorted, 45.9 cents, down from 54.4 cents
Utility bill, barcoded: 31.2 cents, up from 29.3 cents
The Forever Stamp
With the May 14 rate change, the Postal Service is introducing the Forever Stamp to help reduce the inconvenience that consumers may experience in acquiring new-rate postage — or "make-up" stamps, such as 2-cent and 3-cent stamps prior to implementation of new prices. Regardless of the purchase price, the postage value of a Forever Stamp will be the current first-class mail, non-automation, single-piece, first-ounce letter rate and will be unaffected by any subsequent change in that rate.
The Forever Stamp will be available 30 days before implementation of new prices. Look for the new Forever Stamp at the post office in mid-April.