Rates, reform main topics at NPF

WASHINGTON – The upcoming rate case and what reform means to the mailing community were the two issues most on the minds of attendees, vendors and speakers at the 2007 National Postal Forum held last week.

In his keynote address, Postmaster General John E. Potter stressed that dialogue between mailers and the U.S. Postal Service is key if the mailing industry is going to successfully navigate new roads that have barely been mapped.

“Roles…have changed. Rules [are] under development,” Mr. Potter said. “Today, communication with each other is more important than ever as we work to understand and shape this new world.”

Mr. Potter was referring to the new postal law that took effect on Dec. 20 that changes the role of the agency and the Postal Regulatory Commission. Under the law, the PRC must write a new set of rules on how to establish mail rates, ensure compliance with the new rules, act on complaints about postal rates and poor mail delivery, review whether mail delivery is meeting the needs of the nation, and, if necessary, use subpoena power to get information from the postal service.

Mr. Potter also discussed how mailers and the USPS have to work together to mitigate some of the larger rate increases that they face. Catalogers, for example, face 20 percent to 40 percent increases, although these rates are being reconsidered by the PRC. New rates go into effect May 14 for most mailers.

“In many cases, the PRC lowered rates compared to the original Board of Governors proposal,” he said. “That’s good, but I’m very concerned about whose rates are growing significantly above the average. My message to you is that we want to work with you to lower your costs so you stay in the mail…While we all wish there was more time to react, we have to use the time available.”

Mr. Potter offered some examples such as medical products, which he told the audience they could convert from bottles to blister packs.

“In postal terms, you mail a flat and not a package and get the benefit of the lower flat rates,” he said.

He also explained that boxed cards and boxed checks can easily move to a flat shape, which makes the mail pieces more efficient to process and deliver, and thus lower postage costs.

Some lighter, oversized envelopes and catalogs can be folded and mailed as letters, according to Mr. Potter.

“And some catalogers are talking about changing to a digest size,” he said. “Both can help you save by taking advantage of lower, letter-sized rates.”

Vendors on the trade show floor also offered tools to help mailers mitigate the increases.

Paris-based Neopost, for example, showcased its IJ-Dynamic Scale shape-based compliant dynamic scale and its DS-80 folder inserter.

With the new USPS shape-based pricing structure, the size, thickness and weight of parcels will be taken into consideration when determining postage. Neopost said the IJ-DS features a four-point detection system that automatically measures packages in order to correctly classify and rate outgoing mail based on the new 2007 postal rates.

Also as a result of the pricing structure, changing mail from flats to letter formats will directly equate to significant postage savings. The DS-80 folder inserter is designed to change the shape of mail, Neopost said.

John Ward, vice president and general manager of mail services at Stamford, CT-based Pitney Bowes Inc., discussed Pitney’s PSI division and how it is a USPS work-share partner that offers presort services, such as high-speed automation, intelligent work-flow and high-volume discounts.

“No one likes a rate increase,” he said. “But by partnering with the private sector, the postal service has been able to minimize the impact of the rate increase for mailers.”

Envelope vendors also said many of their customers and prospects are trying to find ways to switch from flats-shaped to letter-shaped envelopes. To do this, many are planning to fold their mailers to fit into a letter-sized envelope.

“We have many customers coming to us, asking if they can switch from a flat envelope such as a 9 by 12 [inches] to a 6 by 9,” said Beverly B. Chrismon, a sales representative at National Envelope, Raleigh, NC.

Atlanta-based MailExpress Inc. announced a money back delivery guarantee for expedited non-letter-size mail and small parcels for high-volume mailers. The guarantee is for customer delivery within five days, or MailExpress reimburses the mailer up to four times the cost of shipment. The company said that Standard flats mailers facing high increases can switch to pay rates that are 20 percent lower than First-Class mail rates.

Mailers, however, understand the work they have cut out for them.

“We are going to be hit pretty hard, and we are going to be experimenting with many new formats,” said Michael Swarr, director of magazine distribution at Washington – based National Geographic. “We’ll be reexamining our entire processes to see what we can do to improve our processes and mitigate the increases we face.”

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