Margie Dana

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It may seem like yesterday that US Postal Service rates went up, but in fact it was January 2006. As we brace ourselves for new rate increases (due this May), I interviewed a local mailing specialist about what to expect and how direct mailers can take action now.

Robert Johnson is an Executive Board Member of the Greater Boston Postal Customer Council (PCC). He has been a mailing expert in New England for several decades.

MD: Ok, first things first, Bob. 1st class stamps will jump 2 cents from $.39 to $.41/apiece. Right?

BJ: Yes. The new rate, which is actually $.01 less than sought by the USPS, will take effect on May 14, 2007.

MD: Then there's the new "Forever Stamp." This will be good to use forever. Should consumers and small businesses buy them in bulk now? Will there be different forever stamps issued - such as holiday ones, or will they all look the same?

BJ: There's no need to rush out and buy "Forever Stamps" just yet. As it stands today, the stamp's design is a very attractive representation of the Liberty Bell. The advantage of this stamp is that it will be good forever; that is, when first class rates change, there will be no need to add additional postage to the forever stamp. Also, the USPS will not need to print an interim stamp (i.e., last increase created a $.02 stamp, if you'll remember). I'm not aware of any additional (holiday) designs at this time.

MD: Tell me about the shape-based pricing. Is this new? Are they trying to squash the creative spirits of direct mailers by making us squeeze everything into a #10 envelope?

BJ: Shape-based pricing, while not a totally new concept, is an important component of the current rate increase. Odd-shaped and larger-sized pieces have always been mailed at a premium rate. Squashing creative spirit is not the goal; in fact, with the new rules, creativity is more important than ever. Instead, mailers are being urged to consider all options available to reduce postage costs. It is still possible to be very creative within the confines of size, shape and postage. In any case, compliance with automated standards should be a universal mailing goal.

This postal rate increase is focused on size. Downsizing mail class (i.e., flats to letters) will save postage, while rates for boxes and padded mailers will increase. New uniform thickness and flexibility rules take effect. Keep an eye on weight (the basis weight of the mailing's paper, for example).

Padded envelopes, since they may not pass the new uniform thickness rule, may also be more expensive. This is a new consideration for most mailers.

MD: Which increases will be in effect on May 14th? Which will be delayed till July - or am I misinformed?

BJ: Count on May 14th for almost all of the postal increases to take effect. The rates that will be delayed pertain to Periodical rates, which will be implemented on July 15th of this year. The Board has also asked the Postal Regulatory Commission to reconsider their recommended rates for three product categories: Standard Flats (essentially catalogs); the lack of first-class non-machinable surcharges; and, the Priority Mail flat rate box.

MD: Any other increase(s) readers should know about?

BJ: Every rate is changing. The following examples highlight many of the more significant changes.

• Letters, bill payments, greeting cards: $.41 for the first oz., up from $.39.

• Wedding invitations (2 oz.), $.58, down from $.63.

• Postcards, $.26, up from $.24.

• Priority mail flat-rate envelope, $4.60, up from $4.05.

• Express Mail flat-rate envelope, $16.25, up from $14.40.

• Parcel Post, 1-lb. package, $4.50, up from $3.95.

• Bank statement, 2 oz., presorted, $.45.9, down from $.54.4.

• Utility bill, barcoded, $.31.2, up from $.29.3.

MD: What about catalog and magazine publishers? Will they see an increase as well?

BJ: Full-size catalog rates are increasing dramatically at this time. However, these proposed rates are being reconsidered. Periodicals will experience both a new pricing structure as well as some complex preparation changes.

MD: What steps can businesspeople take now to minimize these upcoming rate increases?

BJ: The postal increase, although not "good news," can work in a positive way for the industry. Designers, printers and clients must be made aware of a few simple steps that can dramatically reduce both the cost and the impact of higher postage rates.

• Review the physical characteristics of every mailing piece at the earliest stage of design. Don’t wait until it's too late.

• Since this rate increase is focused on size, be familiar with piece size restrictions, classes of mail, piece weight and thickness and flexibility rules.

• Proper list hygiene is essential to postage savings. Clean your mailing lists regularly. Eliminate UAA (Undeliverable As Addressed) and dupes.

• Design for automation. Specific physical characteristics are required for automation compatible mail. Be familiar with them.

• Work with the USPS. The new rate case emphasizes work-sharing. Drop-ship to a BMC (Bulk Mail Center) or SCF (Sectional Center Facility) if appropriate. Presort to the greatest degree possible. Commingle if desirable. The savings can be substantial.

• Educate yourself. Contact your mail house early and often. It is a good source for postal expertise. Benefit from the outstanding USPS website (www.usps.com). Attend seminars, forums, and events. A little education will go a long way in saving postage.

Bob, good advice for all of us - thank you!

(By the way, Bob tells me that The Greater Boston Postal Customer Council is sponsoring a free postal rate change seminar on Wednesday, April 4th. Attend either the 10 am session or 1 pm session at the USPS Northwest Facility, 200 Smith Street, Waltham, MA 02454. Register by email at Margaret.a.Jordan@usps.gov or call 617-654-5280.)

©2007 Margie Dana. All rights reserved. You're free to forward this email to friends and colleagues: please do! However, no part of this column may be reprinted without permission from the author.

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