Postal News

USPS Outlines Strategic Plan

Postmaster General John Potter recently presented an action plan for the future—outlining the steps proposed by the USPS to ensure a viable postal service for years to come.

Like all businesses, the Postal Service must adapt to technology and market changes. The current business model, which has been in effect since 1970, needs to be updated to address the challenges of today’s world.

Many of the proposed strategies have been discussed in the news in recent months. Some will require approval from Congress or the Postal Regulatory Commission. And others represent on ongoing effort to expand products and services, improve productivity, create a more agile workforce and eliminate waste.

Some of the more significant proposals outlined in the USPS action plan include:

• Retiree Health Benefits Prefunding. While this has little impact on mail delivery, it has a multi-billion dollar impact on postal profitability. USPS officials feel that if payments for retiree health benefits followed the same approach taken by other government agencies, they would save $5.6 billion a year in cash flow. In 2009, Congress made a one-year exemption—but new laws would be required to affect long-term change.

• Five-day delivery.   Despite lower mail volumes and reduced revenues, the USPS network must support an additional one to two million new addresses each year. In order to maintain universal mail delivery, the USPS would like to eliminate in-home delivery on Saturday (the lowest volume day).  Such a move would require Congressional action.

• 2011 price increase. In addition to changing the structure of how some products are priced, the USPS plans to pursue “a moderate exigent price increase” effective in 2011. Such an increase could go beyond the Consumer Price Index, which has been used to cap price changes on market dominant products since 2007.

• Network realignment.  The USPS plans to expand access in places where customers already shop, creating more on-demand services such as stand-alone kiosks and additional partnerships with retailers. At the same time, the Postal Service would minimize costs by reducing redundant retail facilities—though they acknowledge that Congressional support would be needed to make such network changes.

In summary, the USPS requires the help of Congress to make the much-needed changes that will ensure the viability of the USPS for generations to come.  While the USPS has taken impressive cost cutting measures over the course of the past 10 years ($6.1 billion in 2009 alone), cost-cutting measures alone will not be enough to achieve profitability—they will need Congress to engage on the issues noted above.

If you would like to learn more about the cost-cutting efforts taken by Postal Officials in recent years, how today’s business climate effects postal sustainability or details on all of the proposals presented by PMG John Potter, you can read more at usps.com.

USPS touts Intelligent Mail^® success

With more than 7 billion pieces of mail processed and $2 billion in revenue generated for the U.S. Postal Service as of March 2010, the USPS reports how the Intelligent Mail^® Full Service program has been a success story for business mailers, too.  Postal officials provide tips for mailers who are considering adopting the new barcode now at usps.com.

USPS Posts Details on IMb^TM Services

Mailers can use the new Intelligent Mail^® barcode to request a host of services, including OneCode Confirm^®, OneCode ACS^TM and Full-Service ACS^TM.

Each service or combination of services has a unique Service Type Identifier. Some require fees. Others are not available for all mail types. To help you understand all of your options—and what is required—the US Postal Service has posted a detailed presentation on their website. Implementing these Intelligent Mail^® services can help you increase the value of your mail.  More details!

Mail Processing Changes for Priority Mail

Priority Mail® pricing for 1 pound or less will be calculated by weight and zone effective January 4, 2010.  This change, which applies to Retail, Commercial Base and Commercial Plus Pricing, may impact the way you process your Priority Mail® packages. More details!

2010 Postal Pricing Announced

Zero increase for market dominant products.
The US Postal Service announced that there will be no price increase in 2010 for market dominant products including First-Class Mail^®, Standard Mail^®, periodicals and single-piece Parcel Post^®.  Postal officials also confirmed that there will be no exigent price increase for these products.

For mailers, this news offers advance notice—providing time for organizations to plan their 2010 budgets and future mail investments with greater confidence.

According to postal officials, “this is the right decision at the right time for the right reason.  Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.”

New prices for shipping services take effect in January, 2010.
On USPS competitive products, including Express Mail^®, Priority Mail^®, Parcel Return Service, new prices have been announced.  These rates take effect January 4, 2010.

Not all prices have increased. The retail price for Priority Mail Flat Rate Envelopes, for example, will be reduced from $4.95 to $4.90. Complete prices are available at pe.usps.com

The USPS also continues to offer commercial volume incentives and has added three new products to its Commercial Plus category:

• Commercial Plus Cubic Volume-Based Pricing
• Priority Mail Half-Pound Price
• Priority Mail Padded Envelopes (9.5” x 12.5”)

Postal expert Elizabeth Lombard provides more details on Commercial Base Pricing, including ways you can use Pitney Bowes solutions to save time and money.

For instructions on how to download CBP rates and the required inscription to your DM Series Mailing System, please visit www.pb.com/ratechange.

In comparing prices, shippers should ask whether carriers charge ancillary fees, such as fuel surcharges. Some shippers add extra fees for fuel, rural delivery, Saturday delivery and other items to a customer’s final bill. The Postal Service has no comparable surcharges.

First-Class Mail® Incentive Approved

Through the latest USPS incentive program, companies can earn a 20% postage rebate on presorted letter, flat and card volumes that exceed a predetermined threshold.  This incentive runs October 1 through December 31 2009. 

To be eligible, a company must have mailed 500,000 or more non-parcel First-Class Mail presort pieces between October 1 and December 31 in both 2007 and 2008.  The rebate will be calculated s 20% of the average price per piece multiplied by the number of pieces mailed above the threshold.

Other restrictions and parameters apply.  To learn more, or to register for this program, visit www.usps.com/firstclassmailincentive.  The deadline for registration is November 1, 2009. 

New ‘Move Update’ Penalties

A new approach to Move Update compliance and assessments is slated to take effect January 4, 2010.

Under the current rules, all commercial (discounted) First-ClassTM and Standard Mail® mailings must  be processed through an approved Move Update method at least 95 days prior to a mail date in order to take advantage of presort discounts.

Today, samplings of mailings are verified by the MERLIN™ system, which verifies compliance to the Move Update regulation.  Mailers can receive reports generated by MERLIN that will enable them to improve their Move Update processes and overall address quality.  In January, those reports will be used to assess mailers that do not meet the required threshold.  The MERLIN system will compare names and addresses in the mailing to known change-of-addresses (COA) and will calculate the compliance score as a tolerance percentage.  A mailing with a score below 70% and a minimum of 5 missed COA updates will fail the verification. Failure will result in a seven-cent per piece penalty applied to the portion of the mailing that reflects the failure amount over 30%. For example, a 100,000 piece mailing with a failure rate of 40% will have a $.07 cent per-piece penalty applied for 10% of the pieces in the mailing. The 10% is the difference between the not-updated percentage (40%) and the tolerance (30%). For this mailing of 100,000 pieces, 10,000 of the pieces would be charged $0.07 per piece, adding $700 to the mailing costs.