The U.S. Postal Service filed a negotiated service agreement case Feb. 23 with the Postal Rate Commission seeking a recommended decision on a three-year test with HSBC North America Holdings Inc., Prospect Heights, IL.
Negotiated service agreements are special service and rate arrangements between the USPS and a mailer or group of mailers. Proponents say NSAs encourage greater volume by rewarding the postal service's major customers with discounts and premium services.
The USPS Board of Governors approved the filing of this fourth NSA with the PRC earlier this month, but at the time would not identify the company.
The filing contains the same terms and conditions as the NSA with Capital One Services Inc., McLean, VA, which took effect Sept. 1, 2003, and represented the first NSA. They include a declining block element and an address correction element.
Review of functionally equivalent NSA proposals should require substantially less time for PRC consideration, according to the commission.
HSBC would get discounts of 2.5 cents to 5 cents per piece during the three years if its First-Class bulk volume exceeds 615 million pieces in the first year, 725 million pieces in the second and 810 million in the third. The NSA would cover mailings for the financial institution's credit and banking products.
HSBC would agree to receive electronic information about its undeliverable-as-addressed solicitations sent as First-Class mail instead of physical return of the pieces. HSBC also must use only addresses processed using the USPS National Change of Address/Coding Accuracy Support System database within 90 days prior to mailing.
According to the filing, “the postal service estimates that it will benefit by $6.1 million over the life of the NSA.” The USPS said this month that it netted more than $21 million in benefits from the first year of the Capital One NSA.
Another three-year NSA involving Discover Financial Services Inc., Riverwoods, IL, a business unit of Morgan Stanley, took effect Jan. 1. Also, at this month's USPS board meeting, the governors set an April 1 implementation date for the NSA with Bank One Corp., which merged in July with J.P. Morgan Chase & Co., New York.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. 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