Mail Pooling: Using Innovation to Create Savings
However, higher postal rates and transportation costs have changed that thinking. Today, it's not unusual for distribution costs to exceed all manufacturing costs combined. Distribution has become a big bottom-line concern, and mailers are looking for options to reduce this cost.
The most effective distribution strategy is one that maximizes postal savings by taking full advantage of the latest computer processes and electronic distribution technologies. To do this, catalogers must work with a printer/mailer that has developed a comprehensive mail pooling system.
Catalog printers create mail pools by consolidating pallets from multiple jobs on trucks to specific destinations to create shipping efficiencies. A well-run pool should consistently qualify 93 percent or more of participating mail for destination entry. Since most mailers don't have the volume or density to fill a trailer to a specific destination on their own, in many cases the cost of transportation would negate the postal savings being earned.
The challenge is to load several titles together on one trailer so the capacity of that trailer can be maximized. This allows the freight to be prorated based on the weight contributed by each title, allowing all publishers to achieve a higher level of net savings.
The other benefit to catalogers is destination entry of their catalogs ensures the most controlled distribution challenge through the postal system. The deeper you enter the mail into the postal stream the less likely the mail will be significantly delayed in processing because you are avoiding the larger or extra processing facilities altogether.
In order to evaluate the quality of a mail pooling operation, it is important to consider the following:
Find out if the mail is pooled based on in-home or drop dates. Understanding this is important to avoid miscommunication and provide the mail distributor with clear delivery expectations.
Ask if they are using mostly contract carriers or buying most trucks on the spot market. While the spot market offers price advantages when trucks are plentiful, this strategy can come back to haunt you in the third and fourth quarter when trucks are tight and carriers are taking care of their contract customers.
Ask to see samples of their reporting package. You want to see system driven, automated reports. This indicates that the reports are something they do all the time, with procedures and accountabilities in place to support them.
The more sophisticated operations will require participants to provide a GCA Mail.Dat file, which is an industry standard computer file generated during the presorting of the job that describes each container in the mailing using detailed statistics (i.e. weight, quantity of catalogs, destination of container, etc.)
Find out what type of tracking capabilities they have and verify the methodology used to ensure deliveries have been made. This can be important when the postal system is full or you response seems to be delayed.
With postage rates and distribution costs continuing to increase, it is essential to develop a comprehensive mail pooling system.
By creating effective distribution strategies, catalogers are able to reduce freight and postage costs, improve transportation service and increase the penetration of mail into the postal system, which in turn improves the delivery of the mail.
Dave Johannes is director of distribution services at Banta Catalog Group, Minneapolis.