Many mailers may save on the cost of forwarding parcels thanks to a system introduced last week by the U.S. Postal Service.
Standard A parcel mailers normally pay for each forwarded parcel a weighted fee based on a national forward-and-return ratio. Now, with Shipper Paid Forwarding Service (SPFS), they have the option to forward Standard A parcels – that is, parcels weighing less than a pound — at a single-piece rate of between $5 and $8 for up to one year from the date the recipient filed a change of address. Both services require mailers to pay an Address Change Service notification fee, which is 20 cents per notice.
“Before SPFS, Standard A mailers had to pay the average of all mailers that use the postal service instead of exactly what their forwarding profile was,” said John Ward, vice president of marketing services at USPS. “To pay this average, oftentimes they had to pass that cost onto the customer, which no one was happy about.”
SPFS shifts the cost of postage due to the sender, making mailers optimistic that this will improve customer relations.
“Prior to this system, our customers who received a forwarded package with postage due on it had to pay the postage,” said Joe Monastro, senior director of BMG Direct Marketing Inc., Indianapolis. “This system will eliminate that need.”
Rick Kanka, vice president of marketing at Cosmetique, Vernon Hills, IL, agreed.
“While we are not currently using SPFS, we are considering it for the future,” he said. “At face value, it seems like a significant improvement.”
The system is designed to work with the Bulk Parcel Return Service (BPRS), which went into effect Oct. 12 and allows Standard A parcel mailers who receive more than 10,000 undeliverable-as-addressed parcels each year to have the parcels returned to their processing and distribution centers or delivered in bulk back to the mailer at a rate 40 percent less than the previous rate.
Some mailers say both systems still need work.
“[Both services are] a good change from a bad mistake the USPS made in the first place, but the whole parcel return area still needs some real examination,” said Jim Jellison, executive vice president of the Parcel Shippers Association, Washington, DC. “It’s a good thing, but it’s definitely not the final answer.”
SPFS was approved by the USPS Board of Governors on Oct. 6, after the recommendation of the Postal Rate Commission.