Mailers Ready as USPS Raises Rates Next Week

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Most direct marketers are mailing on schedule this month despite next week's increase in the U.S. Postal Service's rates.


When rate changes take effect Jan. 10, the cost to mail a First-Class letter will go up 1 cent, to 33 cents. Standard-A mailers will begin paying rates that are, on average, 1.2 percent higher than their current rates. First-Class bulk mailers who mail 1-ounce bills will see a 3.1 percent increase, and Standard-B mailers will see an average 12.3 percent increase. Worksharing discounts also will take effect at this time.


Postal experts, direct mailers and USPS representatives said the process has gone smoothly, mainly because the rate case wasn't as complicated as previous ones. Mailers prepared by updating their postage rate-paying software and presort software early. A few have even started using their upgraded systems for Jan. 10-dated mail and aren't expecting any delays.


"We have been working with the postal software community for quite a while, specifically putting together 'implementation-readiness' teams last February," said John Nagla, classification specialist at the USPS.


Postal customers said they are ready.


"Advo is soundly prepared for the new USPS rates," said Vince Giuliano, senior vice president of government relations at Advo Inc., Windsor, CT. "Unlike previous postal increases, this one is less than the rate of inflation and it marks the smallest increase ever recorded for advertising mail."


This year's increase also is different because most direct mailers aren't rushing to mail items before the deadline.


"Catalogers' schedules are pretty much locked in, even though they may do some minor shifting," said Daniel J. Minnick, director of postal and industry services at Experian Direct Tech, Schaumburg, IL. "Since the rate increase is minimal, it probably isn't worth shifting and having the impact that that could have on their marketing plans."


Jack May, vice president of operations at AmeriComm Data Direct, Mountainside, NJ, hasn't seen many companies mailing earlier to beat the increase. "Most of our customers are sticking with their mail dates," he said.


Nonprofit mailers, however, are doing everything to get their late January and February mailings moved up because they face increases of up to 13 percent.


"They are scrambling like mad, and the letter shops are probably doing the best they can to accommodate them," Minnick said, "even though it's a little awkward since capacities are getting full."


Another reason the process may be going smoother is because plant-verified drop-ship mailers -- or large USPS customers -- have 10 extra days to get their mail into the mailstream before they have to pay new rates.


"If mail enters the postal stream after [Jan. 10], it can still be accepted


at the old rates until Jan. 21 for Standard A, Standard B and periodicals," Nagla said.


Shippers who use worksharing discounts will have an easier time digesting the rules because of a branding program the USPS' expedited/package service business unit is launching Jan. 10. The program, Parcel Select, will wrap a brand name around the revamped discounts and service offerings eligible to the 3,500 companies in the United States that ship more than 50 packages a day via commercial ground and who use either their own fleets or consolidated shippers to drop-ship parcels to USPS distribution centers.


"Parcel Select creates a brand name to link up to product and service offerings mailers will receive after Jan. 10," said Chet King, marketing specialist at the USPS. "We are trying to frame out something that is more user-friendly and easily identifiable. The rates and service offerings were already in place. We just wanted to make them more easily understood and communicated."


This week, the USPS is sending videotapes and letters about Parcel Select to internal key plant and district managers, as well as postmasters in the larger post offices. It will send a direct mail program to large customers in the spring.


In general, the USPS hopes Parcel Select will cut into some of United Parcel Service's dominance in the United States. King said Parcel Direct is the first brand name within 25 years in the parcel arena of the USPS, after Express Mail.
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