USPS to Raise Rates in May

The US Postal Service announced its plan to increase its mailing rates. Effective Monday, May 11, 2009, the price for a 1-ounce First-Class Mail stamp will increase from 42 cents to 44 cents. The rate for additional ounces will remain at 17 cents per ounce.

Prices for most shipping services like Express Mail and Priority Mail will still reflect the January rate increases. The prices for standard mail, periodicals, package services, extra services will increase. For a detailed list of the new prices, please check the USPS Complete Price List.

The USPS will continue to sell their Forever Stamps for 42 cents until May 11. Forever stamps remain valid regardless of rate hikes – no additional postage will be necessary after the rate change.

While the rate hike will help ease the current financial burden of the USPS, it is not the prescription they need to cure their economic woes. Raising rates will not get them out of the crisis they are in. The USPS needs to come up with new and possibly controversial ways to cut their major costs – and I’m not talking about another bail-out.

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posted by Beatriz Alemar @ 1:03 PM   No Comments »

Post Office lobbies Congress for 5 day-a-week Mail Delivery

Trying to find some sort of financial relief, the US Post Office suggests cutting back on its mail delivery days going from a 6 day mail week to a 5 day mail week. After losing over $2.8 billion last year, the post office estimates it will lose up to $6 million or more this year. With rising costs in a recession and dwindling mail volume, Postmaster General John E. Potter doesn’t think a 6 day mail week is economically feasible.

Studies have shown that decreasing mail delivery days from six to five could save the post office between $1.9 billion to $3.5 billion per year. It doesn’t necessarily mean the end of Saturday mail delivery – other days like Tuesday are being considered.

Other options being considered:
• Relief from $5.8 billion obligation to pre-fund retirement health insurance
• Closing rural and small offices
• Reduce routes

Both the Miami Herald and Direct have great articles with more information.

What surprises me is why no one has talked about reducing the massive pension plans the USPS has for its employees. I know it won’t win any political favor – not to mention, the unions will go crazy. But, the USPS just simply can’t afford to be paying so much to previous workers and break even. What do you think the USPS should do?

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posted by Beatriz Alemar @ 3:36 AM   24 Comments »

Postal Optimization: Maximizing Your Direct Marketing Budget – By Greg Recht

With USPS rate increase that took effect on May 12, direct marketers are faced with the challenge of maximizing their direct marketing campaigns targeted to customers and prospects while optimizing postage.

In compliance with the Postal Accountability and Enhancement Act, the average price increase per class cannot exceed the Consumer Price Index, which was capped at 2.9% as of January 16, 2008. However, rate increases can vary within a class.
The USPS reported a 3% drop in mail volume for the first quarter of fiscal year 2008. This decrease indicates that marketers are reducing mail quantities or eliminating campaigns all together largely due to a soft economy, shrinking budgets, rising production costs and of course, increased postal rates which at times, can make up the majority percentage of the campaign’s total cost.

Reducing mail quantities to achieve budget and/or eliminating once successful direct mail campaigns is not the answer. Successful marketers have implemented better practices specifically in the area of postal optimization. Despite rising postage costs, it is possible to create successful, cost effective direct mail campaigns by aggressively analyzing mail piece design, mail logistics, data hygiene processes, mail tracking and deliverability. Utilizing effective strategies and best practices combined with technology can enhance conversion rates and the overall economic value of a direct mail campaign.

Data Hygiene – according to the USPS, more than 33 percent of the nearly 200 billion pieces of mail handled each year contain inaccurate address information that affects deliverability. Even the most effective campaign cannot be successful if the mail does not reach its final destination. Undeliverable mail can lower conversion rates and negatively impact the campaign’s ROI.

Cleaning data through CASS (Coding Accuracy Support System) will standardize addresses and make minor corrections allowing for a higher rate of mail deliverability.

Another option to ensure proper deliverability is the Delivery Point Verification (DPV) System. DPV is used to assist mailers in obtaining accurate delivery address information and facilitates identification of erroneous addresses contained in the address file. DPV helps to reduce the amount of undeliverable mail pieces, which in turn will result in more efficient postal mail processing and delivery operations.

NCOA (National Change of Address) processing will ensure that the mail is delivered to the new address, minimizing forwarding delays which can also be subject to surcharges by the USPS. Marketers should look into partnering with other service providers to repair bad addresses that cannot be corrected through the CASS and DVP process.

Presorting Software – robust presorting programs should be used to maximize postage discounts and assist Direct Marketers in complying with USPS guidelines. Most mailers utilize presorting software and Direct Marketers should inquire with their provider to ensure that presorting software is being used.

Mail Piece Design – with the most recent rate increase impacting classes of mail differently, marketers should evaluate the design of their existing mail piece(s) and make changes to the pieces most significantly impacted by the rate increase without sacrificing the marketing impact or increasing the cost of production. A campaign’s existing mail piece can be redesigned to comply with a different class of mail and even reduce the postage cost despite the rate increase.

Direct Marketers should also consult with their mailer to see if their mail piece qualifies for automation or non-automation rates – based on the mailing class, dimension and weight of the piece. Mail pieces that qualify for automation require less manual handling by the USPS resulting in reduced postage costs.

Co-Mingling and Co-Palletization – this process consolidates physical bundles of mail from multiple companies and zip codes that have already been addressed and presorted onto pallets. These pallets can then be shipped to the USPS processing and distribution centers that serve a designated geographical area defined by one or more three-digit ZIP code prefixes. This process enhances transit time and reduces the USPS’ handling costs which ultimately reduces the postage rate of the mail piece.

Mail Tracking and Campaign Optimization – various service providers also provide mail tracking services at a reasonable price. Mail tracking can be used to track in-home dates where customer or prospect response dates are critical to a marketer’s success. Marketers can use this tool to adjust mailing dates and drop plans based on in-home dates and corresponding response rates, while making adjustments for future mailings if necessary.

The USPS is also scheduled to implement the new Intelligent Mail barcode in 2009. The Intelligent Mail barcode combines the data of the existing Postnet and Planet Code barcodes as well as other data into a single barcode. The Intelligent Mail barcode will benefit Direct Marketers by having a greater overall data capacity, provides mailers with more digits for their use, increases mail piece, “real estate”, provides more accurate and detailed information for better decision making and allows participation in multiple USPS service programs with a single barcode.

Thorough postal optimization will not only combat increasing postage costs but can also provide enhanced speed to market, conversion rates and the overall ROI.

Greg Recht is the Director of Client Services and Business Development at Inktel Direct (www.inktel.com), an integrated direct marketing services provider specializing in direct mail/letter- shop, product and literature fulfillment, data management, order management and contact centers. Inktel Direct has offices in Chicago, Miami, Ft. Lauderdale and Dallas. Greg Recht can be reached at 630-694-7209 or via e-mail at greg.recht@inktel.com

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posted by Beatriz Alemar @ 12:37 PM   No Comments »