PRC Offers Decision on USPS' Mailing Online Service

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The Postal Rate Commission, the oversight board of the U.S. Postal Service, yesterday recommended to the USPS' Board of Governors a three-year national trial run for the postal agency's Mailing Online Service.


The PRC also requested a higher fee for the service.


Mailing Online is a service designed for mailers that send out fewer than 5,000-piece direct mailings. It also allows mailers to compose a document on a personal computer.


After a mailer purchases the service through a designated USPS Web site, the mailer can select from various printing, finishing, mailing date and payment options, then submit a mailing list of recipients. The USPS batches submitted jobs where possible and transmits them electronically to digital printing contractors, who print the documents, seal them in envelopes and drop them at the local postal facility for delivery.


Mailing Online was originally introduced as a market test in three cities in 1998, but was retracted in early 1999 after the USPS had difficulties with its information technology infrastructure. Later that year the USPS filed a new request with the PRC for a Mailing Online Service that included new features and costs.


In the most recent request, the USPS stated that consumers who use Mailing Online to send an average two-page, single-color, First-Class mail piece should pay 37.9 cents per piece, including postage. The agency based the fee on the direct costs it would have to pay printers involved in the program, along with information technology costs and a markup cost -- or a contribution to institutional costs.


The PRC, however, recommended a higher rate of 40.9 cents for the same representative piece.


"The cost estimates that the postal service used in its case are based on quite speculative volume estimates from about five years ago," said Steven Sharfman, legal counsel for the PRC, Washington. "And, the postal service has come up with its cost estimate, in part, by guaranteeing the printers that it would give them a certain amount of business. If, however, the postal service doesn't give them enough business -- and the volume estimates are wrong -- then the postal service will have to pay the difference to those printers, so it may mean the service could be more costly than we all hope."


The USPS' Board of Governors can accept or reject the request, or send it back to the PRC for reconsideration. However, Sharfman said he is confident the governors will not wholeheartedly reject the case.


"I would assume that the [governors] will not just reject [the case] and say they are not going to play," he said. "If they are unhappy with some aspect of our request, I would assume they would send it back for reconsideration."


Indeed, since the governors have no specific time frame in which to make a decision.


Insiders said the USPS will probably announce a new Mailing Online Service at the agency's Fall Postal Forum in Anaheim, CA, in September.
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