Shape up for the new postal rates

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With the new Postal Service rates now in effect, direct marketers whose shipments don't conform to the new shape-based standards could be paying double what they should.

The direct marketing industry makes more than 750 million product shipments, including CDs, books, dietary supplements, cosmetics, apparel and household appliances, through the USPS.

After automating the letter mail stream and making some progress automating the processing of catalogs, periodicals and other printed materials, the USPS turned its attention to automating the handling of product shipments.

So shape-based rates were created. In most cases it has been impractical for direct marketers to "repackage" their shipments to avoid the effect of the new rates.

The push for automation has affected more than box shape. If a shipment is "too rigid," as with a CD in a jewel box, or "too thick" or "too floppy," it faces additional charges. In some cases, shipments weighing less than six ounces are subject to different rules than an identical box weighing more than six ounces.

Marketers are confronted with stark choices: Absorb the costs, pass them on to consumers or find other ways to offset the increase.

Even at the new rates, the USPS tends to be less expensive than its competition, and in the competitive and price-sensitive online marketplace, passing costs on to consumers may not be a viable option.

However, one avenue may present a workable solution. Despite the rate increases, the USPS continues to offer "worksharing" discounts. These price breaks vary with the depth of sortation, the extent to which the mail is trucked closer to the delivery area. A number of companies aggregate product shipments from different marketers to take full advantage of these discounts.

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