USPS Postal Reform May Finally Happen
It’s early yet, but according to a report in the Washington Post, there is strong bi-partisan support for a new round of Postal Reform. As one would expect from a compromise, there are good and bad points from whatever viewpoint you may hold.
Some key items, Saturday delivery would continue (which is a major advantage for USPS in the parcel delivery space). Stamp prices would increase 1 cent (beyond the recent annual increase). It’s not stated in the article, but this would likely include a similar modest increase for commercial mailers. Postal employees would participate in Medicare, eliminating a great portion of the pension and healthcare issues that have plagued the organization.
The main point is, if it holds together this time, the USPS may finally have the reform legislation that’s been needed for many years. Then we can all get on with the business of using the postal system without having all the uncertainty hanging over us.
New Rates Effective January 22, 2017
The 2017 rate increase is almost upon us. Any mailings presented after January 22, 2017 will use the new rates and fee. While the rates are tied to inflation, and First Class stamps are going up from 47 to 49 cents, they have adjusted the rates differently in various categories. For example Non-Profit postage had a slight decrease, while Bound Printed Matter goes up about 1%.
Here’s a link to the USPS Proposed Rates page.
There are also various rules changes associated with the increase. For example, you cannot use FTP to transmit SSF and EVS files soon, but that’s another story.
Bound Printed Matter increases average of 1%
Details of the 2017 proposed rate increase have been filed by USPS with the Postal Regulatory Commission (PRC). While preliminary, the filing usually reflects the rates we’ll see. We’re in the process of performing our analysis of these new rates and rules. Rather than simply comparing the old rates to the new, our analysis takes actual historical shipping data into account.
Specifically for Bound Printed Matter Parcels, the USPS states a 1% rate increase. For local entry mailers, this basically holds true. The rate of increase varies from 0.8% to 1.5% by weight of the mail piece. With a typical 2 pound book, the rate is 1%.
However, there is good news for drop ship mailers. Whether you enter at the NDC or SCF level, the rate increase is only 0.5%. It seems the USPS has finally figured out they should reward drop ship mailers for doing so much work for them.
We hope you find this information useful. If you have further questions on proposed rates or rules changes (such as the proposal to drop the FSS discount/sorting requirements for Flats) please contact us, and we’ll be happy to look into it for you.
If you’d like to explore the published rate information yourself, it’s on USPS Postal Explorer.
USPS Intelligent Mail Package Barcode
Are you ready? If not, we can help.
There’s a lot to know about the Intelligent Mail Package Barcode, and the stakes are pretty high. For example, an average 2.5 pound book, shipping Bound Printed Matter, would cost 79 cents more without the IMpb. If you do drop shipping, it’s even worse, because you lose those discounts too. If you’re not ready, we can help get you there quickly and efficiently.
Intelligent Mail Package Barcode (IMpb)
Effective January 2013, the USPS requires an IMpb bar code for all parcel/package services.
If you don’t have it, you lose your presort discounts.
If you drop ship, you lose that privilege and discount.
Effective January 2014, there is also a 20 cent penalty per piece.
You must submit a data file, which is not a Mail.Dat, to the USPS for each shipment.
There is a strict certification process for the barcode printing, and the data file.
IMpb Related Services
Guidance through entire certification process.
Programming and consultation in preparing the new label format.
Pre-certification examination of label samples to catch formatting errors.
Advice in passing the print quality standards.
Ability to format the labels and send you print-ready PDFs.
Programming and consulting in creating the package data file.
If desired, we can prepare and transmit the file on your behalf.
We provide as much or as little help as you need in a fee for service structure.
As you’ve probably heard, the USPS is in deep financial trouble. They’re losing billions of dollars every year. This report from the Government Accountability Office (GAO) – Testimony Before the Committee on Oversight and Government Reform in the House of Representatives on May 11, 2016 outlines many of the challenges they face. In many cases, it may be worse than you know. Here are some key points…
- Despite declines in service levels, labor compensation and benefits account for 80% of USPS expenses. This puts them in a bind to further reduce expenses.
- First Class mail (letters, statements, invoices, etc) is the most profitable class of mail. Volume has declined from about 98 billion pieces of mail in 2006, to about 62 billion in 2015.
- As the USPS is major fulfillment service for online shopping, package volume is rising. However, USPS calculates they need $2.50 in new package revenue to offset each $1.00 lost in First Class Mail volume due to higher processing costs.
- The mandate to 100% pre-fund the retirement accounts of all past, current and future employees is often cited as the key contributor to USPS losses. However, you may not have heard that USPS has defaulted on $28.1 billion in these payments since 2007, which makes all that red ink a few shades darker.
- Even without this pre-funding requirement, the USPS would still have lost $10.8 billion during the same time period due to reduced mail volume.
While Congress will have the final say in what, if any, reforms will take place, in Postmaster General, Megan Brennan’s Written Testimony to the Committee, she outlines the position of the USPS. She outlines the major elements of their plan as follows..
- Require full Medicare integration for parts A, B and D, for postal retiree health plans (This would lower USPS exposure by moving some of the burden for retiree health benefits onto Medicare).
- Restore the exigent price increase for market-dominant products (taking back the April 2016 price decrease).
- Calculate all retirement benefit liabilities using postal-specific salary growth and demographic assumptions (they dispute the way the payments are currently calculated).
- Provide some additional product flexibility (more control over the services they offer, and what they can charge for them).
Even if they do get this entire wish list, Brennan admits it won’t be enough to solve all the USPS woes, to which the answer is more price increases. Unfortunately, we feel this will mean further declines in volume, which will lead to larger losses.
We’ll keep you posted if there are any developments from Congress, but don’t expect anything until at least November after the elections.
NPF 2016 Coming to Nashville, TN March 20-23
The National Postal Forum will meet in Nashville, TN March 20-23, with the exhibit floor being open on March 21 – 23. The NPF is the premier show to demonstrate and learn about the latest in mailing technology and techniques.
There are educational sessions discussing USPS, postal news, Direct Mail, and general business subjects, with several professional certifications offered. The exhibit floor allows you to explore the latest in the world of mailing and printing hardware and software.
The NPF is always a good show. You should catch it any time it’s near you.
USPS Announces Rate Change for April 2016
New prices are now available on the USPS website to take effect in April 2016. Before you panic, this is actually great news. The USPS has appealed to the Postal Regulatory Commission (PRC), but most likely it will go into effect.
A little history. Back in 2013, part of the rate increase was a 4.3% “exigent” (emergency) rate increase. This was to help the USPS deal with the unusual circumstances caused by the Great Recession. The PRC agreed to the increase, but only allowed it to be temporay and based on reaching certain revenue goals. Unless the USPS can convince the PRC otherwise, this exigent increase will be allowed to expire when those revenue goals are met. This is forecast to happen in mid-April.
This rate decrease will effect “market dominant” products, which include First Class, Standard Mail, Bound Printed Matter, Periodicals, etc. It will not effect “market competitive” products like Priority Mail and Parcel Post.
Keeping up with the USPS is a moving target. Their rules and technology are constantly shifting. This presents dangers and opportunities to any business involved in mail or parcel shipping.
We’ve been writing programs and developing procedures to meet USPS regulations since the 1980’s. We know what works, and how fast we have to move when things change. More than that, we know who to ask if we need to clarify a rule, or resolve a dispute in what a rule means.
Want to start a mail house, move your mailing services in house, find the best rate for a new project, or just need help in lowering your distribution costs? Talk to us before you mail, you’ll be glad you did.
We provide USPS Mail Presort and data processing services for a large number of printers, publishers, and mailers. In general, the customer provides a data file, and we process it through in-house and commercial software to provide USPS documentation and label or invoice output (usually PDF files for customer printing).
One of the highlights of this service is our Remote Mail Manifesting service. In this, customers send data files to our systems. They are automatically sorted and prepared as a manifesting mailing. Data files are returned to the customer and transmitted to USPS.
All of these services are pay as you go, saving our customers thousands of dollars in terms of software purchases and license fees, not to mention the postage savings from USPS rules compliance and optimization.