Postal Plan May Double Move Update Costs
The notice will ask for comment about changing from 180 days to 90 days the required frequency of Move Update. Move Update, implemented in July 1997, is designed to reduce the volume and cost of UAA mail, which the agency says costs it $1.5 billion a year.
First-Class mailers currently must update their addresses every six months using USPS services such as National Change of Address, Address Change Service or the Fast Forward system to receive postal automation discounts. These systems, which customers buy through USPS vendors, vary in cost. NCOA users pay from 50 cents per thousand to $3 per thousand based on their mail volume.
The proposal also would extend the Move Update requirement concept for bulk mailings to Periodicals, Standard Mail and Package Services. These groups use the service -- especially Standard mailers -- but are not required to do so to get discounts.
The change also would eliminate manual address corrections generated from Ancillary Service Endorsements as a means to meet the Move Update requirement. And it would change the frequency from 180 to 90 days for addresses that are ZIP+4 coded via Coding Accuracy Support Software-certified address matching software to obtain a discounted automation rate.
Comments are being sought through the summer. If approved, the changes would not take effect for another 18 to 24 months.
Though the USPS and its licensees -- such as Anchor Computer Inc., Group 1, Firstlogic Inc., Acxiom Corp., Time Customer Service Inc. and Harte-Hanks -- say the new process would reduce UAA mail, lower postage and materials expense and improve response rates, some mailers are concerned about the extra costs.
"This would entail more work on the part of the mailers," said Irv Warden, general counsel for the American Bankers Association, Washington. "The postal service's rate proposals do not adequately reflect the cost savings that the postal service gets from the required address update measures. Therefore, mailers are required to spend the time, effort and money to update their addresses, and the discounts or rates they receive don't adequately reflect those savings."
However, another mailer said the ruling may be positive for the mailing industry.
"There certainly will be more work in the short run, that's definitely true," said Eric Fielding, director of postal administration at Geico Direct, Fredericksburg, VA. "But in the long run, we all benefit from this because what this will do is increase the quality of addresses and reduce forwarding and return mail charges for both the postal service and mailers."
Fielding, whose company, like all large First-Class mailers, is required to use Move Update to qualify for automation rates, predicted that "within two update cycles, mailers will receive a benefit."
The USPS is proposing the ruling with input from a Mailing Industry Task Force address quality work group. Members include Acxiom, Advance Services Presort Inc., Prudential Financial, First USA, Time Customer Service and Harte-Hanks. The committee is co-chaired by Charles Morgan, company leader at Acxiom, and Charles Bravo, senior vice president and chief technology officer at the USPS.