PRC Recommends Approval For NSA Request

Share this article:
The Postal Rate Commission has recommended that the United States Postal Service Board of Governors approve an experimental three-year test of a negotiated service agreement with HSBC North America Holdings Inc.


According to the recommendation issued May 20, the agreement would give HSBC, Prospect Heights, IL, discounted rates for increasing its First-Class mail volumes and accepting electronic address corrections. The USPS would save about $6.1 million over the life of the agreement, according to the PRC.


Under the deal, HSBC would get discounts ranging from 2.5 cents to 5 cents per piece if it increased First-Class mail volumes to 615 million pieces in the first year of the agreement, 725 million in the second year and 810 million in the third year. The increased First-Class volumes would generate $2.4 million for the USPS, but the discounts would cost the USPS $2.8 million in lost revenue, according to the PRC.


Also, the USPS would provide electronic address corrections on First-Class solicitations for no fee. In return, HSBC would agree to forgo the physical return of undeliverable mail, creating savings of $6.5 million for the USPS.


The agreement with HSBC is modeled after an NSA between the USPS and Capitol One Service Inc., McLean, VA, that took effect Sept. 1, 2003. The agreement with HSBC differs with the Capitol One NSA in some aspects, the PRC said.


The HSBC agreement relies on shifting mail volumes from Standard to First-Class rates, rather than the generation of new First-Class volumes, the PRC said.


Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. He is covering the postal service while Melissa Campanelli is on maternity leave. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Direct Mail

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Direct Mail

Delivered: Birthday Deals Mailers

Delivered: Birthday Deals Mailers

What's in our mailbox this month: Birthday Deals. See which ones are good deals—and which ones you shouldn't deal with.

USPS Commissions Brain Research on Direct Mail

USPS Commissions Brain Research on Direct Mail

The Office of the Inspector General seeks neuroscientists to investigate human responses to digital and physical media.

Direct Mail Remains Impactful

Direct Mail Remains Impactful

Even in this prolific digital age, direct mail proves to be a strong tool for marketers. Standard mail volume is growing at 3% and marketers will spend $45 billion on ...

Copyright © 2014 Haymarket Media, Inc. All Rights Reserved
This material may not be published, broadcast, rewritten or redistributed in any form without prior authorization.
Your use of this website constitutes acceptance of Haymarket Media's Privacy Policy and Terms & Conditions.