USPS May Discontinue Volume Discounts for Certain International Mailers

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The U.S. Postal Service said yesterday in the Federal Register that it is proposing the elimination of volume discounts for certain high-volume international mailers.


Discounts would be discontinued for mailers who spend $2 million or more combined on International Priority Airmail and International Surface Air Lift in the preceding postal service fiscal year.


A decision will be made by the postal service following a review of comments. The deadline for comments is Aug. 18.


International Priority Airmail is a volume airmail service that provides rapid worldwide delivery for businesses sending all types of mail weighing up to four pounds. This can include invoices, direct mail, catalogs, small merchandise packages and business correspondence.


International Surface Air Lift is a bulk mailing service that provides international delivery of the same types of mail. For ISAL, however, there is a minimum volume requirement of 50 pounds per mailing. ISAL shipments are flown to foreign destinations and entered into a country's surface or non-priority mail system for delivery.


Discounts for these services can be as high as 10 percent, according to the USPS.


The USPS said the change is required based on recent reviews of the costs for providing these services.


The filing in the Federal Register also said these changes do not affect customers who participate in the USPS' International Customized Mail service agreement program, which includes customized agreements with mailers that last one year. In these arrangements, the size of the discount depends on the customer's volume or revenue and is adjusted quarterly based on the volume mailed during the preceding quarter.


"We had two ways that people could access discounts," said Barry Burns, international product manager at the USPS. "One is through the ICM program, and one is through the published discounts structure, or the IPA/ISAL program. But we've found that most people utilize the ICM program and access the discounts through the ICMs, so we decided to discontinue the published discounts.


"We are not getting rid of discounts for international mail. The discounts will now [be facilitated] through the ICM process and not through the published process."


The international mailing community, however, is concerned about the ruling.


"This could have a devastating effect on large mailers who use the postal service to mail internationally," said Charles Prescott, the Direct Marketing Association's vice president of international business development and government affairs.


He added that though the postal service made its decision based on a review of costs, "we believe the IPA product, in particular, is a successful service that people are using and is doing very well."


Prescott said that this announcement essentially means that to get discounts, mailers will have to sign up for ICMs. However, "if the USPS is really having cost issues with ISAL and IPA, discounts granted under ICMs to consolidators as well as mailers will also be under pressure."


Because of this announcement, "smart international mailers should speak to other carriers about their international mail offerings," Prescott said.


Written comments can be mailed or delivered to the Manager, Mailing Standards, 475 L'Enfant Plaza S.W., Room 3436, Washington, DC 20260-3436. Comments may also be submitted via fax to 202/268-4955, ATTN: Rick Klutts.


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