Creative solutions to USPS hikes
For DM professionals who rely on standard mail, the May 14 postage carried the subtlety of a sucker punch. The move to shape-based pricing at the US Postal Service levied a huge increase on flats and parcels, which often require manual processing, and bulk mailers have scrambled to minimize the exorbitant hike in postage rates. Already, two solutions have emerged as best practices: efficient packaging and mail consolidation.
To ensure compatibility with automated processing machines, the USPS introduced guidelines on flexibility and uniform thickness for flat mail pieces. Consequently, many packages that previously mailed as flats now ship as either not-flat machinable (NFM) pieces or as parcels - the most expensive category. For example, converting a first-class flat to a letter saves $0.39 per piece, and reconfiguring a first-class parcel as a flat saves $0.33.
Companies that use standard mail have even larger incentives to improve packaging efficiency. In this category, pieces that ship as flats save $0.65 over parcels of the same weight and $0.55 compared to NFM rates.
The pricing restructure takes a greater toll on nonprofits that send enclosures. Many items that qualified for automation discounts now mail as NFMs or parcels, incurring postage two to three times higher.
Package redesign and mail consolidation offer two methods of reducing postage costs. First, efficient packaging can slash standard mail rates. Unlike first-class mail, standard mail isn't as heavily affected by weight. Each additional ounce costs only $0.046, compared to $0.17 with first class. Redesigning mailers to convert parcels or NFMs to flats eliminates the above surcharges. Innovative new products have reached the market that package items like CDs, calendars and boxes of greeting cards as flats, minimizing postage costs.
And, third-party mail-consolidation services can reduce mailing costs even more. Consolidators combine high volume mail from multiple organizations and use state-of- the-art sorting equipment. These firms remove much of the workload from the USPS and qualify for the deepest postage discounts, which they pass on to clients.