New Tabbing Requirements for Self Mailers

The Post Office has released the final standards for folded self-mailers ( FSM ) this afternoon in a federal register posting.  The Post Office has spent two years working with the mailing community to develop these new standards and there are not to many surprises.  I will summarize the key changes:


1. New size and weight standards
2. New definition of what is a FSM, for example items containing a disk is treated differently
3. Can no longer use tabs with perforations
4. Can no longer use tabs on the bottom panel
5. All FSM's now require a minimum of two tabs
6. There is now a limit to the number of panels in a FSM
7. Postal customers will be encouraged to comply with the new standards right away with final deadline 
    Jan 5, 2013. For Std mail customers, failure to comply will mean having to pay full fare FCM rates.


If you have any concerns how this new change may effect your operation, and if your business is within San Diego or Imperial Counties, please give us a call at 800.545.0437, otherwise please contact your local Neopost or Hasler Dealer for an addressing specialist to assist you.


Here are some of the critical items in the Federal Register Posting: (All of this will be available in the DMM and Quick Service Guide, including pictures detailing tab placement guidelines.)

Physical Characteristics

    The maximum height for all automation and machinable FSMs is 6 
inches and the maximum length is 10\1/2\ inches, with a maximum 
thickness of \1/4\ inch. The maximum weight of three ounces is 
applicable to all mailpieces prepared without envelopes.
    The paper basis weight for folded self-mailers is based on book-
grade paper unless otherwise specified and varies depending on the 
total weight of the mailpiece and/or optional elements that are 
incorporated in the design. The final fold must be at the bottom for 
all designs except oblong style pieces. For oblong-style FSMs the final 
fold is on the leading edge. Tabs cannot be placed on the bottom open 
edge of an oblong-style FSM.
    A minimum of two tabs will be required to seal all FSMs when tabs 
are used as the sealing method. Tabs used as seals may not have 
perforations. Glue may be used as an alternate sealing

[[Page 74705]]

method when applied according to the standards for FSMs.
    After January 5, 2013, folded self-mailers that do not meet these 
requirements will be assessed postage as follows: First-Class 
Mail[supreg] and Standard Mail[supreg] customers will pay nonmachinable 
prices; Periodicals mailers will pay nonbarcoded prices.

Note: They refer to "Book Weight" Paper.  If you consult paper weight comparison charts you will likely not see "Book Weight" listed.  Book Weight is a form of "Offset"  Most of us are used to "Bond" weights.  Here is the basic conversion:

Bond weight = Offset weight

20 = 50

24 = 60

28 = 70

h. Quarter-folded self-mailers made of a minimum of 100 pound book 
grade paper may have as few as 4 panels. Quarter-folded self-mailers 
made of 55 pound or greater newsprint must have at least 8 panels and 
may contain up to 24 panels.

3.14.3 Panels

    Panels are created when a sheet of paper is folded. Each two-sided 
section (front and back) created by the fold is considered one panel. 
When a folded self-mailer is made of multiple sheets, multiply the 
number of sheets by the number of panels created when folding a single 
sheet to determine the total number of panels. The following conditions 
apply:
    a. External panels created by folding must be equal or nearly equal 
in size.
    b. The final folded panel creates the back (non-address) side of 
the mailpiece. The open edge of the back panel must be at the top or 
within 1 inch of the top or trailing edge of the mailpiece.
    c. The final folded edge must be the bottom of a folded self-mailer 
unless prepared as an oblong. The final folded edge of an oblong folded 
self-mailer must be the leading (right) edge.
    d. Internal shorter panels must be covered by a full-size panel, 
and count toward the maximum number of panels.
    e. Folding methods and the subsequent number of panels created when 
folding a single sheet of paper are:
    1. Bi-fold: Folded once forming two panels.
    2. Tri-fold: Folded twice forming three panels.
    3. Oblong: Paper folded once to form two rectangular panels with 
one elongated dimension and parallel opposite sides. The final folded 
edge is on the leading (shorter) edge.
    4. Quarter-fold: Folded twice with each fold at a right angle 
(perpendicular) to the preceding fold. One sheet of paper quarter-
folded creates four panels.

Twisted government accounting behind Postal Service woes By Bob Sullivan

Twisted government accounting behind Postal Service woes

By Bob Sullivan

You might have heard that the United States Postal Service is in trouble: that it's losing billions, that it will have to end Saturday service and close branches — and most inflammatory, that it might need a government bailout. Perhaps you heard that the Postal Service couldn't pay $5.5 billion bill that came due Sept. 30 and that only an emergency postponement saved it from the government's equivalent of default.

In fact, it's the Postal Service that’s currently bailing out the U.S. government. Politicians have been raiding Postal Service revenues for years, using them to make the federal deficit appear smaller than it really is. The fiscal gyrations are so twisted that the Postal Service is right now forced to pre-pay health care benefits for employees the agency hasn't even hired yet — in fact, for many future employees who haven't even been born yet — all to artificially shrink the federal deficit.

It's these crushing accounting tricks, not the cost of delivering mail, that has pushed this 200-year-old institution to the brink.

Welcome to the wacky world of Washington, D.C., accounting.

There's a long and a short story to the tragic tale of Postal Service financial trouble. I'll start with the short one. Right now, the Postal Service is being forced to pre-pay health benefits for the next 75 years during a 10-year stretch. In the past four years, those prepayments have totaled $21 billion. The agency's deficit during that time is about $20 billion. Remove these crazy pre-payments — a requirement that no other government agency endures and no private industry would even consider — and the Postal Service would be in the black.

Of course, it's not quite that simple. And no one denies that the rise of e-mail has meant the fall of first-class mail, creating a real long-term challenge to USPS relevancy. But the current fiscal "crisis" is entirely manufactured by the Washington way — in fact, the payment missed on Sept. 30 represents this year's tithe to the federal deficit, disguised as health care benefits layaway for a mail carrier the agency might not hire until the year 2060.

The controversy over the future of the post office has been slowly coming to a head, and it reached a fever pitch around the Sept. 30 payment, meant to satisfy this year’s health care pre-payment costs. The agency begged for a delay, which it received — but that led to detractors’ calling for immediate reforms, such as post office closings and the elimination of Saturday delivery. But supporters have rallied to the agency’s side — about 500 rallies were held last week all around the country in support of the agency.

Meanwhile, some advocates are desperately trying to call attention to the USPS’s unique budget situation, which is not quite the crisis it appears.

“It is clear that these prepayments for future retiree health care benefits are — at this point — the primary reason for the U.S. Postal Service's financial crisis,” Ralph Nader wrote in a letter to Congress last week. “In fact, simply looking at the numbers reveals that the Postal Service's ‘financial crisis’ is in fact an entirely manufactured crisis.”

Why would the Postal Service find itself in this crazy arrangement, bleeding red ink today so it can pay for employees’ health benefits 50, 60, or 75 years from now? Believe it or not, there is an explanation, but it's not so simple — delivered with fair warning from Jim Sauber, chief of staff of the National Association of Letter Carriers.

"It takes a long time to explain how crazy and complicated it is," he said.

But a quick tour into this fiscal crisis is incredibly instructive as to the ways of Washington, and failing to understand it might mean someday soon you won’t get mail at your house any longer.

First, it's important to note that the USPS is financially self-sufficient. Since the 1970s, it has been mandated by Congress to operate entirely on its own revenue, with no taxpayer money. It's an enormous agency — with $65 billion in annual revenue, it would be a Fortune 50 company if it were a private entity. As a quasi-government agency, it enjoys privileged fiscal status — its revenue and expenses are "off budget," meaning Congress isn't supposed to be able to toy with them. It shares this privileged state with only one other government entity: the Social Security Trust Fund. But as you know, Congress finds a way to toy with everything.

In 2006, Congress passed the "Postal Accountability and Enhancement Act" to modernize the agency's stamp-price-setting tools and a host of other elements of mail delivery. That law set up this seemingly crazy health care prepayment fund.

To bean counters at the U.S. Treasury Department, however, the fund made perfect sense. It was a crazy arrangement to cover for another crazy arrangement the Postal Service escaped in 2006.

When former members of the U.S. military take a government job, their military service counts as annual credits toward pension eligibility. This holds true when service members take postal jobs — but who pays for the value of those credits? In 2006, the Postal Service was shouldering that cost on its balance sheet, even though there was general agreement that the Treasury Department should be responsible for pension credit earned prior to employment with the Postal Service. The 2006 law shifted the burden from the USPS, but that meant an addition burden on the Treasury — that is, it would have added to the federal deficit. So to balance out that negative on Treasury's balance sheet, the Postal Service was ordered to make health care pre-payments equivalent to the cost of the pension cost shift.

The problem of military pension credits itself was a creation of just such a deficit-hiding accounting trick. In 2002, an audit of the USPS budget found it had overpaid into the federal government's pension plan by roughly $80 billion. Postal Service officials lobbied hard have its pension payments readjusted. They were, in 2003, but in order to make the shift revenue neutral, military pension credit costs were shifted from Treasury to the USPS.

The 2006 law passed by Congress was designed to put an end to this fiscal football.

In the middle part of the last decade, the Postal Service was so awash in operating cash that the 10-year tithe to the federal government seemed a small price to pay for a promise that the crazy cost shifting would be over in a decade. In the meantime, the cash played a small but measurable part in reducing the federal deficit.

"But it became very clear that these payments were unaffordable once the economy tanked," Sauber said. In short order, the health care prepayments became “a million-pound weight” on the Postal Service budget.

Sauber and other Postal Service advocates say the Postal Service would have no trouble balancing its own budget if Congress and the Treasury Department stopped adding billions to its annual expenses through fiscal maneuvering.

Still, powerful forces have gathered in an attempt to use this budget bickering as an excuse to reform the post office dramatically. Rep. Darrell Issa (R-Calif.), the Republicans’ top government cost-cutting advocate in the House and head of the powerful Committee on Oversight, has introduced legislation that would dramatically alter the agency. His Postal Reform Act of 2011 would end Saturday delivery, create a commission to study post office closings and create a Solvency Authority that could break union contracts if the agency fell into the red.

Last month, President Barack Obama proposed that the Post Office end Saturday delivery. His proposal offered some relief from health care prepayments, but it merely by spreading the costs out over a longer period of time. Issa responded by calling Obama's plan a "thinly veiled attempt to offset continued operating losses with a taxpayer-funded bailout."

Others have advocated complete dismantling of the service, turning mail delivery over entirely to private industry. Rarely do those arguing against mention that the Postal Service starts its year in a hole designed to hide a portion of the federal deficit.

A Heritage Foundation report published last month called "You've Got (No) Mail: Is the End Near for the Post Service?" indicated that the agency "barely avoided default" and was down to "a week's worth of cash."

"Congress should act quickly to address this not-so-slow-motion postal train wreck. The goal, however, should not be to ‘save’ USPS or even to save mail delivery," the report said. It mentioned the pension overpayments but made no mention of the health care costs prepayment, and it concluded that the USPS cannot survive unless supported by "tens of billions of dollars in subsidy."

Sauber says it’s hard to counter such arguments with a long discussion of Washington accounting tricks.

"It's so much easier to say, ‘Oh, it’s the Internet.’ That seems obvious, but that's not really what's going on,” he said. “It is frustrating for letter carriers to have to deal with all this misinformation. … It’s easy to demagogue on this, for people who don’t like government workers to say the Postal Service is failing because it’s a government agency. But in this case the easy explanation isn’t the right explanation."

The postal workers' union favors legislation proposed by Reps. Elijah Cummings, D-Md., and Stephen Lynch, D-Mass., that would allow the agency to access overpayments to the federal pension system, and to restructure its health care prepayments, to solve its immediate budget woes.

It's also hitting back at critics with an aggressive TV ad campaign that began running last month.

"Congress created this problem, and Congress can fix it," the ads say.

Sauber doesn't deny that the Postal Service has problems. Revenue shrank from $74 billion to $67 billion from 2008 to 2010. Mail volume plummeted from 202 billion to 170 billion pieces during that same stretch, a 22 percent fall. While the drop parallels the recession, common sense dictates that even a robust economic recovery probably won't lead to an increase in handwritten love letters.

But Sauber says the rise of the Internet has created almost as many opportunities as problems for the Post Office — package delivery from online shopping has soared, for example. Meanwhile, the agency has shrunk full-time employee ranks from 663,000 to 583,000.

The Postal Service hasn’t always done itself any favors — long lines, unhelpful employees and stories of double-dipping by pensioners feed the public’s notion that change is needed.

"We know we have to change. But the right way to do that is to clear up this artificial fiscal crisis now, survive the recession and then see where we are," he said, "not to gut the Postal Service now based on misinformation and budget politics."

Follow Bob Sullivan on Facebook or Twitter.

Ralph Nader: cutting postal services is “suicidal” for USPS

Monday, September 26th, 2011
Ralph Nader, the renowned consumer advocate and five-time candidate for President of the United States, has warned key US Congressmen that cutting postal services is a “suicidal prescription for further decline” at the US Postal Service.

Nader wrote to the chairmen of the US Senate and House government oversight committees last week declaring that the financial troubles at USPS were an “entirely manufactured crisis”.

In particular, he urged Senator Joseph Lieberman and Representative Darrell Issa to sort out the “perverse” annual healthcare payments required of USPS by Congress in the Postal Accountability and Enhancement Act (PAEA) of 2006.

The Postal Service’s current $19.5bn debt could be entirely blamed on the $20.95bn that Congress has so far required the Postal Service to pay into the fund to cover healthcare benefits for its retirees for the next 75 years, he suggested.

Nader said it was an “incredibly unreasonable burden” for Congress, via its 2006 postal reform legislation, to require USPS to pay $103.7bn for 75 years’ worth of future retiree benefits in just a 10-year period – “something that no other government or private corporation is required to do”.

The letter from Nader voiced sentiments that have been expressed repeatedly over the past two years by postal management, unions and customers – as well as US Congressmen from both parties, though it would appear not enough in the House of Representatives to overturn the situation.

“Not unexpected”
Nader, who is politically a progressive independent, suggested that the decline in mail volumes was a less important factor in the Postal Service’s present troubles than the PAEA benefit payments, stating that the largest volume declines had coincided with the peak of the global financial downturn.

“Critics of the U.S. Postal Service will say that declining mail volume has been a result of the internet age and a move toward digital communications,” he wrote, adding that energy costs and an expanding US population were also factors impacting USPS revenues. “But they aren’t the chief drain on the USPS’s financial resources.”

He said the 10% drop in USPS revenue from 2007 to 2010 was “significant”, but “not to be unexpected”, given that other corporate giants saw revenues dropping by even greater margins during the same time.

Nader also demanded a return of $82bn in funds overpaid into USPS civil and federal retirement funds, as he warned that USPS efforts to rebalance its books with service cutbacks would inflict the “harshest” impact on the most vulnerable in society.

Cutbacks
Nader cast doubt on whether further USPS cutbacks were even needed from here on, with 110,000 jobs already cut in the last four years since the peak of US mail volumes in 2006.

With mail volumes reducing by 22% since Peak Mail, USPS is currently seeking to cut costs by shuttering nearly 3,700 post offices and more than half its processing plants, as well as slowing its First Class Mail service.

But Nader said such a move, along with the prospect of postal rate increases, would prompt a “suicidal” further decline.

“What is the sense in closing such a large number of post offices and cutting back on the service and the sense of community to millions of U.S. citizens in exchange for such a pittance of cost savings – especially when there are other much larger ways that can be adopted to put the Postal Service back on financially sound footing?” said Nader.

He insisted that Congress now needed to focus on maintaining the Postal Service’s universal service mandate, suggesting that the requirements of remaining self-sufficient and fiscally sound while continuing universal service were not necessarily compatible.

Support
The letter to the oversight chairmen last week came as various factions in Congress attempted to garner support for separate postal reform proposals, with a key difference at the moment being between a Republican-led proposal that refuses to sort out the retiree benefits and pension overpayments situation, and Democrat-led proposals that do.

On Friday, the House Republicans’ proposal stepped into the Senate, with Senator John McCain introducing the Postal Reform Act of 2011.

However, as it is the McCain bill stands little chance in the Democrat-controlled Senate, just as the Democrat proposals at present stand little chance in the Republican-controlled House.

Last week Republican Senator Scott Brown, who represents Massachusetts, revealed that he has been involved in meetings with House Democrats seeking bipartisan support in the Senate for their proposals, notably Massachusetts Representative Stephen Lynch, who has been leading House Democrat attempts at postal reform.

Senator Brown said on Thursday that there was “common ground” between the proposals on the table at the meeting, saying: “I was encouraged by a bicameral meeting that took place today with Congressman Lynch and others to forge a bipartisan plan to put the Postal Service on a sustainable financial path. With the Postal Service close to insolvency, we can’t afford to delay some difficult, but necessary, decisions.”

Source: James Cartledge, Post&Parcel

Earn your Professional Certification

The San Diego Postal Customer Council and MSMA San Diego will co-host a one-day Professional Mail Certificate Conference. Conference attendees will be able to earn the Mailpiece Design Professional (MDP) Certification from the United States Postal Service and/or the Mailpiece Design Consultant (MDC) Certification from the Mail Systems Management Association. Gordon Glazer, President of San Diego Postal and Shipping Equipment, will be our instructor with the assistance of USPS officials.

Conference Details:

Date: October 14, 2011

Time: 9:00 AM to 2:30 PM (registration begins at 8:30 AM)

Location: USPS, MLS P&DC, 11251 Rancho Carmel Dr., San Diego, CA 92199

Conference attendees will be able to earn the Mailpiece Design Professional (MDP) Certification from the United States Postal Service and the Mailpiece Design Consultant (MDC) Certification from the Mail Systems Management Association.

The MDP is a written test that can be taken onsite after the instruction is completed. The MDC exam is only available online from the MSMA and won't be offered onsite.

Cost for the conference is $30.00 and includes a continental breakfast, lunch and all study materials needed to take both the MDP & MDC test. When registering for the conference, attendees can also be pre-registered for one or both exams. The additional costs to take the individual test are: MDP -$75.00, MDC - $35.00

Register at www.sdpcc.org

New Marketing Case study - 45% Improved Return

By adding low denomination stamps to a pre-cancelled stamp and adding the optional Mailer's Postmark (cancellation) the Wildlife Conservation Society achieved dramatic increase in both response and return. San Diego Postal and Shipping Equipment can help your organization achieve similar results by providing you with the equipment and know how. Give us a call. Here are the key findings as reported by the Ballantine Corporation

"Test Strategy"

"Wildlife Conservation Society knows they have about 1.3 seconds to persuade someone to open their mail piece, and they figured anything they could do to make it look more like a personal piece of mail rather than a mass-market communication would give them an advantage in capturing the recipient’s attention."


"Test Results"

"The additional stamps definitely gave them the edge they were seeking. Their response rate and average gift amount both jumped 20% versus the control, and the revenue generated by the test panel was 45% greater than the control."

For the complete Story and pictures http://www.ballantine.com/2011/07/19/july-case-study/

Sometimes it’s hard to be a Republican.

Darrell Issa (R) from north San Diego county is pushing legislation to help "bail out" the Post office. He doesn't have a clue what is needed, and it is very un-Republican to add more un-needed bureaucracy to an agency that is already suffocating from regulation. Government needs to get out of the way and remove the straps that are holding the USPS back. Allow them to right size their production and distribution networks as the market needs dictate and take the politics out of it. Relieve them of ridiculous pre-funding of their retirement burden mandated by the PAEA. Give them back the 75 BILLION the GAO has reported that they have already overfunded.

Postal Rate Increase confirmed for Jan 2012

Just Announced: The Postal Service has made it known that the next price increase will be implemented on January 22, 2012. It will include both the competitive and market dominant price change together.

We do not know if this will eliminate the need for the May time frame that has been the traditional time for Market Dominate product price adjustments since the PAEA went into effect in 2007.

This increase / adjustment will be filed sometime in October 2011, and will most likely contain the CPI figure through September 2011. If the economy tanks, then there is a possibility that the USPS would file on Oct 14, to avoid the September figure and use the August 2011 figure.

Less than 12 months will have passed since the last price increase and there is a slight difference in the available price cap.

“Top 10 Ways to Reduce Postal Spend”

If you are like most of our customers, you are probably trying to look for ways to reduce costs for doing mail. For instance, postage costs seem like they are only going up, however in some cases there are significant discounts available to the commercial mailer that can actually help you reduce your postal spend.

I would like to invite you to register for the upcoming MSMA educational Luncheon event on April 21. There will be a brief presentation on the different postal rate changes by the USPS and then I will share over the next 40 minutes the

“Top 10 Ways to Reduce Postal Spend”

Besides getting a great Tri-Tip lunch, you are sure to take away key ideas and strategies to save your organization time and money. These include:
1. Choosing the right class
2. How to make Standard perform like First Class
3. Shaped based pricing, and how to use it to reduce costs
4. Automation to reduce mail center labor costs
5. Address quality = better results, less money
6. How to reduce mailings, not content
7. Empower and hold accountable
8. Key postal compliance changes and strategies to avoid hidden costs
9. Benchmarking performance
10. How to calculate Return on Investment (ROI) to justify labor and technology investments

To register: www.msma-sd.org click on events

I will also be presenting a much more comprehensive presentation called “What You Need to Know for your Mail Center Operation” on Sunday, May 1st at the National Postal Forum held at the San Diego Convention Center. This is a 4 day conference that has over 130 workshops and more than 100 exhibitors. For more information visit www.npf.org

In Addition, you have access to our MDC certified (Mailpiece Design Consultant) sales and service staff any time. (800)545-0437 Please call us for a personal consultation to learn how you can reduce your costs and improve your productivity for your mail and shipping operations. We look forward to helping you get the most out of your postal spend in 2011!

April 21, 2011, 11:30am - 1:30pm
Sheraton Mission Valley
1433 Camino Del Rio S
San Diego, CA 92108

Register www.msma-sd.org

Postmaster General Continues Efficiency Improvements

March 24, 2011
WASHINGTON — Postmaster General Patrick R. Donahoe today announced a newly redesigned Postal Service, one that is better positioned for growth, reflects further alignment within the organization to achieve core business strategies and, when fully implemented, will help realize approximately $750 million of annual cost savings.

“I am confident that we have developed a strong plan that takes a key step toward a leaner and less bureaucratic structure. One that is fair to our employees and one that will meet the future needs of our customers and the mailing industry,” Donahoe said.

About 7,500 positions will be eliminated across the organization through the redesign that also includes the closing of seven district offices and offers limited financial incentives to those who meet specific qualifications.

The seven district offices that are closing are Columbus, South East Michigan, Northern Illinois, South East New England, South Georgia, Big Sky and Albuquerque. District offices house only administrative functions and do not affect customer service, mail delivery, Post Office operations or ZIP codes. The functions of these seven districts will be assumed by district offices within close proximity.

A Voluntary Early Retirement and financial incentive programs will be offered to eligible employees. Employees must be 50 years old, with at least 20 years of service; or any age with at least 25 years of service to qualify for the incentive. Employees who accept the VER offer or already meet existing retirement qualifications will receive $20,000 paid over two fiscal years to separate from the Postal Service.

“It’s critical that we adjust our workforce to match America’s changing communications trends as mail volumes continue to decline,” Donahoe said. “At every step and with every change, our focus remains on our customers and continuing to provide outstanding customer service.”

Today’s announcement focused on the administrative and executive corps. Additional staff reductions will occur as the Postal Service makes necessary changes to its network and retail operations. The full scope and financial impact of these personnel actions should be realized in one calendar year – March 2012.

While cost savings will be realized, the main objective of the restructuring is to enhance and strengthen customer service and relationships. The realignment flattens the organization, enabling flexibility to more quickly adapt to changing market forces and continuing mail volume decline.

The Postal Service is streamlining operations and improving efficiencies across the organization in order to protect its ability to provide affordable, universal mail service. By modifying networks, consolidating functions and restructuring administrative and processing operations, the Postal Service is adapting to meet the evolving needs, demands and activities of its customers.

“Mail remains valuable. It is at the heart of a $900 billion industry that continues to drive commerce and the American economy,” Donahoe said. “We will continue to work with Congress and our employees to achieve the long-term, structural and legislative changes we know we need to remain a viable organization.”

Regulators OK modest postal rate increases

February 22, 2011 - 12:31 pm EDT

Washington, D.C.—The U.S. Postal Service's request for a postal rate increase in line with the rate of inflation has been approved, with new prices to go into effect April 17.
As approved by the Postal Regulatory Commission, first-class mail will still cost 44 cents for the first ounce, but heavier first-class letters will cost more, rising from 17 cents per additional ounce to 20 cents. Other rate boosts include bound printed matter parcels (0.7%); carrier route flats (1.4%); first class flats (3.8%); first-class mail to Canada (6.7%); high-density flats (0.4%); standard flats (0.8%); and standard parcels (11.3%).

Overall, postal rates will rise 1.7%. The postal service had requested these increases in January after an earlier request for a 5.6% rate hike was rejected by the PRC. That decision is being appealed.

New Postal Service Pricing Announced

WASHINGTON — Postmaster General Patrick R. Donahoe today signaled a new direction in continuing to improve customer relations within the mailing industry by consulting with industry representatives on the effective date for new prices and by relaxing some guidelines on implementing Intelligent Mail services.

“Working together as an industry we can address continuing economic challenges in a way that allows the Postal Service to generate much needed revenue while being more responsive to ongoing customer needs,” Donahoe said.

The Postal Service filed new mailing service prices with the Postal Regulatory Commission (PRC). Price increases are limited to the Consumer Price Index (CPI) cap of 1.7 percent, consistent with the Postal Law of 2006. Actual percentage price increases for various products and services will vary. It has been nearly two years since the last increase.

After consulting with key industry association representatives, the new prices would become effective on April 17, giving the mailing community more than 90 days to make the necessary technology and system changes to accurately handle the new prices.

“We heard concerns that we were moving too fast on discontinuing POSTNET coding, and we will continue to offer the automation prices for mail with POSTNET barcodes beyond May 2011,” Donahoe said.

Donahoe emphasized the value of the Intelligent Mail barcode (IMb) to mailers and reiterating the Postal Service commitment to implementing the IMb. To date, more than 41 billion pieces of mail have been processed using the IMb.

Recognizing ongoing industry concerns with challenges associated with implementing the IMb, Donahoe announced that mailers can continue to use POSTNET barcodes to qualify for automation discounts. The POSTNET code was to sunset this May to enable broad adoption and use of the IMb. There will be no Full Service Address Change Service (ACS) charges.

Single-piece, 1-ounce First-Class letters will remain 44 cents with additional ounces increased to 20 cents. The price for mailing a postcard will increase one cent. The overall increase is capped at 1.741 percent – at or below the rate of inflation as measured by the Consumer Price Index. More detailed pricing information will be available later today online at www.usps.com/prices. Today’s announcement does not affect Express Mail and Priority Mail prices.

Prices for other mailing services, including Standard Mail, Periodicals, Package Services, and Extra Services, also will change. Business mailers will see price increases in a variety of categories.

Summary of Percentage Changes by Product Category
Product % Change
First-Class Mail
Single-piece Letters & Cards 0.5
Flats 5.3
Parcels 3.8
Presort Letters & Cards 1.8
International (Outbound and Inbound) 4.0

Standard Mail
Letters 1.8
Flats 0.8
Carrier Route Letters, Flats, and Parcels 1.4
High Density / Saturation Letters 0.6
High Density / Saturation Flats and Parcels 0.4
Parcels (NFM’s / Parcels) 11.3

Periodicals
Outside County 1.8
Inside County 1.1


The proposed price changes are expected to generate $340 million for the balance of the fiscal year and $720 million if implemented for a 12-month period.

In July 2010, the Postal Service filed an exigent price proposal that was rejected by the Postal Regulatory Commission in September. The Postal Service filed an appeal of that decision with the United States Court of Appeals for the District of Columbia Circuit in November and awaits a decision.

The urgency of the Postal Service’s current financial challenges requires this price change even as it waits for a decision from the federal courts on the exigent case.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.