USPS rates rise, marketers react to new process

The US Postal Service raises rates today for its mailing services, for the first time under new standards established follow­ing the passage of the Postal Account­ability and Enhancement Act (PAEA) in December 2006.

One of the goals of the PAEA was to cre­ate predictability and stability in rates and to allow for greater pricing flexibility.

“Feedback from mailers indicates appre­ciation that they were kept informed through frequent communications via the DMM [Domestic Mail Manual] Advisory and instantaneous access to information online,” said David Partenheimer, a USPS spokesman, in an e-mail.

Jerry Cerasale, SVP of government affairs for the Direct Marketing Association, said, “Overall, DMA members are pleased that this process worked; that basically the rates are at or below inflation.” This time there weren’t as many surprises, unlike last year when catalogers saw rate increases of 20% to 40%, he added.

“We’re both feeling our way through the process,” Cerasale said of the USPS and the mailing community. “I’m sure the process will get more and more streamlined as time goes by.”

In compliance with the new law, the aver­age price increase per class cannot exceed increases in the Consumer Price Index, which was capped at 2.9% as of January 16. However, within a class, prices can vary.

As of today, First-Class mail rates increase by approximately 2.9%, Standard Mail by 2.8%, periodicals by 2.7%, package services by 2.9% and special services by 2.8%.

In addition, Express Mail increases by 3%, Priority Mail by 6%, Parcel Select by 5.7%, Parcel Returns by 2.2%, Global Express Guaranteed by 5.2%, Express Mail International by 6% and Priority Mail International by 6.1%.

However, not all mailers are happy with the new rate changing process.

“It doesn’t seem that the board of gover­nors and the USPS were all that good at incorporating feedback from the business community,” said Andrew Hally, VP of segment management for Unica Corp., a marketing management company.

Hally anticipated that as the cost of send­ing mail goes up, “marketers are just going to continue to be smarter about how and when and for whom they will use it.” He added, “Increasing rates will just serve as fuel to continue a trend that’s already hap­pening around marketers becoming much more multichannel.”

Last week, the USPS published its final rule for changing address standards for commercial flat-sized mail in the Federal Register. The new standards will go into effect on March 29, 2009.

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