Washington, DC - The Postal Regulatory Commission today issued Order No. 547 in Docket
R2010-4 denying a Postal Service request for an average 5.6 percent rate increase. The Commission found that the Postal Service failed to justiff rate increases in excess of its statutory CPI price cap.
"The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantifo the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mailvolume; therefore, we unanimously deny its exigent rate request," said Chairman Ruth Y. Goldway.
The law requires the Postal Service to demonstrate that any exigent rate adjustments are due to the identified exceptional circumstances. This prevents a bona fide extraordinary or exceptional circumstance from being used as a general rate increase mechanism that would circumvent the price cap system.
The Postal Service's recent volume losses and multi-billion dollar shortfalls are recognized. However, Commission analysis confirms that the Postal Service's cash flow problem is not a result of the recession and would have occurred whether or not the recession took place. lt is the result of other,unrelated structural problems and the proposed exigent rate adjustments would neither solve nor delay those problems.
The Postal Service may be unable to continue to meet a statutory 1O-year payment schedule -
averaging roughly $5.5 billion per year - to create a fund to pay future retiree health benefit premiums. lt has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15 billion borrowing authority. Even with therequested increase, the Postal Service would be unable to meet this annual obligation either in 2011,or in succeeding years.
The Postal Service achieved over $6 billion in cost reductions in 2009. While volume declinesoutstripped cost reductions during the actual recession, Postal Service cost containment programsare producing results and work hours have declined faster than volumes in 2010.
The Postal Regulatory Comm¡ssion is an independent federal agency that provides regulatory oversight over the U.S. Postal Servtbe to ensure the transparcncy and accountability of the Postal Sevice and foster a vital and efficient universal mail system. The Commission is comprised of five Presidentially-appointed and Senate-confrrmed Commissioners, each serving terms of six years. The Chairman is designated by the Prcsident. ln addition to Chairman Goldway, the other Commissioners are Vice Chairman Tony Hammond, Dan Blair, Nanci Langley, and Maù Acton
Thursday, September 30, 2010
Wednesday, September 15, 2010
Mailpiece Design Consultant (MDC) Certification Oct. 8th
San Diego Postal & Shipping Equipment to host a
Mail Systems Management Association - San Diego Chapter Event
Gordon Glazer, CMDSM, CMDSS, MDC will be leading a one day MDC Certification Training workshop on behalf of Mail Systems Management Association.
Every company and mailer should employ an expert to make sure that mailpieces qualify for Automation and Workshare discounts. Learn the information you need to pass the MDC test and become certified.
Who Should Attend:
Mail Industry front-line to mid-level Managers
Designers
Mailers
Marketing Professionals
Printers
Suppliers to the mailing industry
Learn how to:
Avoid the costs of bad address quality.
Comply with USPS regulations to minimize postage costs.
Identify mailpiece design problems and save money.
The MDC exam consists of 100 multiple choice questions and requires a passing grade of 90%.
Pass the exam and receive your certification immediately! Proudly proclaim your achievement by adding your MDC certification to your title.
If you require a retest, you may take the exam one additional time at no extra charge. (at the end of the exam, you will be notified of the questions you missed, along with the actual response you gave).
Friday, October 8, 2010
9:00 am to 2:00pm
at San Diego Postal & Shipping Equipment classroom
12255 Crosthwaite Circle
Poway CA 92064
$65 for MSMA members
$75 for non-members
- Includes Registration, Course Study Program, Lunch and meeting refreshments
- Study only (Actual Test will not be taken onsite).
- Limited to 40 maximum participants
Make sure you're included. REGISTER TODAY
Mail Systems Management Association - San Diego Chapter Event
Gordon Glazer, CMDSM, CMDSS, MDC will be leading a one day MDC Certification Training workshop on behalf of Mail Systems Management Association.
Every company and mailer should employ an expert to make sure that mailpieces qualify for Automation and Workshare discounts. Learn the information you need to pass the MDC test and become certified.
Who Should Attend:
Mail Industry front-line to mid-level Managers
Designers
Mailers
Marketing Professionals
Printers
Suppliers to the mailing industry
Learn how to:
Avoid the costs of bad address quality.
Comply with USPS regulations to minimize postage costs.
Identify mailpiece design problems and save money.
The MDC exam consists of 100 multiple choice questions and requires a passing grade of 90%.
Pass the exam and receive your certification immediately! Proudly proclaim your achievement by adding your MDC certification to your title.
If you require a retest, you may take the exam one additional time at no extra charge. (at the end of the exam, you will be notified of the questions you missed, along with the actual response you gave).
Friday, October 8, 2010
9:00 am to 2:00pm
at San Diego Postal & Shipping Equipment classroom
12255 Crosthwaite Circle
Poway CA 92064
$65 for MSMA members
$75 for non-members
- Includes Registration, Course Study Program, Lunch and meeting refreshments
- Study only (Actual Test will not be taken onsite).
- Limited to 40 maximum participants
Make sure you're included. REGISTER TODAY
Tuesday, March 2, 2010
Postal Service Outlines 10-Year Plan
Postal Service Outlines 10-Year Plan to Address Declining Revenue, Volume
Seeks Flexibility on Operations, Delivery; Possible 2011 Price Increase
WASHINGTON — Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General John E. Potter today outlined an aggressive plan of cost cutting, increased productivity, and an array of legislative and regulatory changes necessary to maintain a viable United States Postal Service.
“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, stressing that there is no one single answer or quick fix to the crisis.
The Postal Service examined revenue, volume and consumer trends; analyzed revenue and product opportunities employed by foreign posts; and examined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behavior.
“The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public,” Potter said.
Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in First-Class Mail alone. Revenue contributed by First-Class Mail will plummet from 51 percent today to about 35 percent in 2020.
“Ensuring a Viable Postal Service for America,” the Postal Service business plan, addresses these challenges, and describes a flexible, agile Postal Service that can adapt to America’s changing mailing habits and preferences.
If the Postal Service takes no action, it will face a cumulative shortfall of $238 billion by 2020. But Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service’s record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours.
Despite these efforts, an estimated $115 billion shortfall will remain. The business plan identifies actions to close that gap:
Restructure retiree health benefits payments to be consistent with what is used by the rest of the federal government and the majority of the private sector and address overpayments to the Postal Service Civil Service Retirement System pension fund.
Adjust delivery days to better reflect current mail volumes and customer habits.
Continue to modernize customer access by providing services at locations that are more convenient to customers, such as grocery stores, pharmacies, retail centers, and office supply stores. Increase and enhance customer access through partnerships, self-service kiosks and a world-class Website.
Establish a more flexible workforce that is better positioned to respond to changing demand patterns, as more than 300,000 employees become eligible to retire in the coming decade.
Ensure that prices of Market Dominant mailing products are based on demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation.
A modest exigent price increase will be proposed, effective in 2011.
Permit the Postal Service to evaluate and introduce more new products consistent with its mission, allowing it to better respond to changing customer needs and compete more effectively in the marketplace.
“Lifestyles and ways of doing business have changed dramatically in the last 40 years, but some of the laws that govern the Postal Service have not. These laws need to be modernized to reflect today’s economic and business challenges and the dramatic impact the Internet has had on American life,” Potter said.
The business plan is a path to the future, the Postmaster General said, a future where the Postal Service remains a vital driver of the American economy, an integral part of every American community and continues to deliver the greatest value of any comparable post in the world.
“If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life,” Potter said.
For more information, fact sheets, soundbites and graphics, please visit www.usps.com/strategicplanning/futurepostalservice.
Seeks Flexibility on Operations, Delivery; Possible 2011 Price Increase
WASHINGTON — Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General John E. Potter today outlined an aggressive plan of cost cutting, increased productivity, and an array of legislative and regulatory changes necessary to maintain a viable United States Postal Service.
“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, stressing that there is no one single answer or quick fix to the crisis.
The Postal Service examined revenue, volume and consumer trends; analyzed revenue and product opportunities employed by foreign posts; and examined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behavior.
“The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public,” Potter said.
Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in First-Class Mail alone. Revenue contributed by First-Class Mail will plummet from 51 percent today to about 35 percent in 2020.
“Ensuring a Viable Postal Service for America,” the Postal Service business plan, addresses these challenges, and describes a flexible, agile Postal Service that can adapt to America’s changing mailing habits and preferences.
If the Postal Service takes no action, it will face a cumulative shortfall of $238 billion by 2020. But Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service’s record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours.
Despite these efforts, an estimated $115 billion shortfall will remain. The business plan identifies actions to close that gap:
Restructure retiree health benefits payments to be consistent with what is used by the rest of the federal government and the majority of the private sector and address overpayments to the Postal Service Civil Service Retirement System pension fund.
Adjust delivery days to better reflect current mail volumes and customer habits.
Continue to modernize customer access by providing services at locations that are more convenient to customers, such as grocery stores, pharmacies, retail centers, and office supply stores. Increase and enhance customer access through partnerships, self-service kiosks and a world-class Website.
Establish a more flexible workforce that is better positioned to respond to changing demand patterns, as more than 300,000 employees become eligible to retire in the coming decade.
Ensure that prices of Market Dominant mailing products are based on demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation.
A modest exigent price increase will be proposed, effective in 2011.
Permit the Postal Service to evaluate and introduce more new products consistent with its mission, allowing it to better respond to changing customer needs and compete more effectively in the marketplace.
“Lifestyles and ways of doing business have changed dramatically in the last 40 years, but some of the laws that govern the Postal Service have not. These laws need to be modernized to reflect today’s economic and business challenges and the dramatic impact the Internet has had on American life,” Potter said.
The business plan is a path to the future, the Postmaster General said, a future where the Postal Service remains a vital driver of the American economy, an integral part of every American community and continues to deliver the greatest value of any comparable post in the world.
“If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life,” Potter said.
For more information, fact sheets, soundbites and graphics, please visit www.usps.com/strategicplanning/futurepostalservice.
Thursday, January 21, 2010
USPS Has Been Overcharged 75 Billion, per OIG Study
January 20, 2010
New OIG Study Estimates USPS Has Been Overcharged for the
CSRS Pension Fund by $75 Billion
A study just released by the U.S. Postal Service’s Office of Inspector General (OIG)
shows that the current system of funding the Postal Service’s Civil Service Retirement
System pension responsibility is inequitable and has resulted in the Postal Service
overpaying $75 billion to the pension fund. The OIG estimates that if the overcharge
was used to prepay the Postal Service’s health benefits fund, it would fully meet all of
the Postal Service’s accrued retiree health care liabilities and eliminate the need for the
required annual payments of more than $5 billion. Also, the health benefits fund could
immediately start meeting its intended purpose -- paying the annual payment for
current retirees, which was $2 billion in 2009.
This marks the third time the Postal Service has been overcharged. In 2002 it was
determined the Postal Service would overfund CSRS by $78 billion. Legislation in 2003
corrected this overfunding. Then it was determined the Postal Service was overcharged
$27 billion for CSRS military service credits. In 2006 these funds were returned to the
Postal Service by Congress, and the surplus was used to fund retiree health care
liabilities.
This study, The Postal Service’s Share of CSRS Pension Responsibility, undertaken in
conjunction with the Hay Group, is the third paper sponsored by the OIG that delves
into the financial entanglements between the Postal Service and the federal
government -- generally at the expense of the Postal Service. The latest study describes
the inequitable allocation of CSRS costs between the federal government and the Postal
Service. The other two reports focus on the Postal Service’s congressionally-mandated
retiree health care prefunding payments (Estimates of Postal Service Liability for Retiree
Health Care Benefits), and the Postal Service’s interaction with the federal budget
(Federal Budget Treatment of the Postal Service).
In this newly released paper, the OIG and Hay Group’s analysis demonstrates that the
method used to determine how CSRS pension costs for postal employees with service
before 1971 are split between the Postal Service and the federal government is
inequitable. As a result, the Postal Service was overcharged by $75 billion for payments
to CSRS retirees from 1972 to 2009. The OIG suggests that this amount be returned to
the Postal Service’s CSRS pension fund. Any excess above what is needed to fund CSRS
liabilities could then be transferred to the Postal Service’s retiree health care fund,
which would fully fund its health care liability and eliminate the need for further
congressionally-required payments to the fund. All of the Postal Service’s current
pension and health care obligations to its employees would then be fully funded.
The report further illustrates the inequity in the methodology used to determine the
Postal Service’s contribution to the CSRS fund. Key findings from the report:
• Hay Group demonstrates that the method of splitting CSRS pension costs for postal
employees with service before 1971 between the Postal Service and the federal
government is inequitable, because the Postal Service is made responsible for all
salary increases after 1971.
• In effect, OPM calculates the federal government’s share for these employees as if
they retired in 1971 at their much lower 1971 salaries. An allocation methodology
that burdens the Postal Service with all post-1971 pay increases is not reasonable.
• As an example, Hay Group shows that the Postal Service could be charged
70 percent instead of 50 percent of the pension costs for employees who worked
half their careers with the Post Office Department and half with the Postal Service.
• Because of the inequitable split, the Postal Service was overcharged $75 billion from
1972 to 2009.
The report also offers solutions:
• Fixing the split by using a more equitable years-of-service approach would leave the
Postal Service with $75 billion more in assets as of the end of 2009. The CSRS
pension fund is currently underfunded by $10 billion, so the resulting pension
surplus would equal $65 billion.
• The $65 billion pension surplus could be added to $35 billion already set aside in the
retiree health benefits fund for a total retiree health fund balance of $100 billion.
• A fund balance of $100 billion is more than enough to fully fund accrued retiree
health benefit liabilities of $87 billion. No further payments to the fund would be
needed to cover this liability.
• The current annual payments of more than $5 billion mandated by the Postal
Accountability and Enhancement Act (PAEA) could end.
• Payments for the premiums of current retirees could start to come from the fund
immediately.
• The annual evaluation of the Postal Service’s retiree health benefit assets and
liabilities would continue, and the Postal Service could be assessed if there were
any unfunded liability.
This report takes on increasing significance as the Postal Service faces a challenging
future. When the Postal Service was established, it was intended to be self-sufficient.
Clearly delineating and separating the Postal Service’s responsibilities from those of the
federal government will help in determining the true costs of funding postal operations.
Citizens and businesses should pay no less and no more than what is required to fund
the Postal Service’s operations.
Here is the link to the OIG: http://www.uspsoig.gov/ (it is on their front page)
Full report: http://www.uspsoig.gov/foia_files/RARC-WP-10-001.pdf
New OIG Study Estimates USPS Has Been Overcharged for the
CSRS Pension Fund by $75 Billion
A study just released by the U.S. Postal Service’s Office of Inspector General (OIG)
shows that the current system of funding the Postal Service’s Civil Service Retirement
System pension responsibility is inequitable and has resulted in the Postal Service
overpaying $75 billion to the pension fund. The OIG estimates that if the overcharge
was used to prepay the Postal Service’s health benefits fund, it would fully meet all of
the Postal Service’s accrued retiree health care liabilities and eliminate the need for the
required annual payments of more than $5 billion. Also, the health benefits fund could
immediately start meeting its intended purpose -- paying the annual payment for
current retirees, which was $2 billion in 2009.
This marks the third time the Postal Service has been overcharged. In 2002 it was
determined the Postal Service would overfund CSRS by $78 billion. Legislation in 2003
corrected this overfunding. Then it was determined the Postal Service was overcharged
$27 billion for CSRS military service credits. In 2006 these funds were returned to the
Postal Service by Congress, and the surplus was used to fund retiree health care
liabilities.
This study, The Postal Service’s Share of CSRS Pension Responsibility, undertaken in
conjunction with the Hay Group, is the third paper sponsored by the OIG that delves
into the financial entanglements between the Postal Service and the federal
government -- generally at the expense of the Postal Service. The latest study describes
the inequitable allocation of CSRS costs between the federal government and the Postal
Service. The other two reports focus on the Postal Service’s congressionally-mandated
retiree health care prefunding payments (Estimates of Postal Service Liability for Retiree
Health Care Benefits), and the Postal Service’s interaction with the federal budget
(Federal Budget Treatment of the Postal Service).
In this newly released paper, the OIG and Hay Group’s analysis demonstrates that the
method used to determine how CSRS pension costs for postal employees with service
before 1971 are split between the Postal Service and the federal government is
inequitable. As a result, the Postal Service was overcharged by $75 billion for payments
to CSRS retirees from 1972 to 2009. The OIG suggests that this amount be returned to
the Postal Service’s CSRS pension fund. Any excess above what is needed to fund CSRS
liabilities could then be transferred to the Postal Service’s retiree health care fund,
which would fully fund its health care liability and eliminate the need for further
congressionally-required payments to the fund. All of the Postal Service’s current
pension and health care obligations to its employees would then be fully funded.
The report further illustrates the inequity in the methodology used to determine the
Postal Service’s contribution to the CSRS fund. Key findings from the report:
• Hay Group demonstrates that the method of splitting CSRS pension costs for postal
employees with service before 1971 between the Postal Service and the federal
government is inequitable, because the Postal Service is made responsible for all
salary increases after 1971.
• In effect, OPM calculates the federal government’s share for these employees as if
they retired in 1971 at their much lower 1971 salaries. An allocation methodology
that burdens the Postal Service with all post-1971 pay increases is not reasonable.
• As an example, Hay Group shows that the Postal Service could be charged
70 percent instead of 50 percent of the pension costs for employees who worked
half their careers with the Post Office Department and half with the Postal Service.
• Because of the inequitable split, the Postal Service was overcharged $75 billion from
1972 to 2009.
The report also offers solutions:
• Fixing the split by using a more equitable years-of-service approach would leave the
Postal Service with $75 billion more in assets as of the end of 2009. The CSRS
pension fund is currently underfunded by $10 billion, so the resulting pension
surplus would equal $65 billion.
• The $65 billion pension surplus could be added to $35 billion already set aside in the
retiree health benefits fund for a total retiree health fund balance of $100 billion.
• A fund balance of $100 billion is more than enough to fully fund accrued retiree
health benefit liabilities of $87 billion. No further payments to the fund would be
needed to cover this liability.
• The current annual payments of more than $5 billion mandated by the Postal
Accountability and Enhancement Act (PAEA) could end.
• Payments for the premiums of current retirees could start to come from the fund
immediately.
• The annual evaluation of the Postal Service’s retiree health benefit assets and
liabilities would continue, and the Postal Service could be assessed if there were
any unfunded liability.
This report takes on increasing significance as the Postal Service faces a challenging
future. When the Postal Service was established, it was intended to be self-sufficient.
Clearly delineating and separating the Postal Service’s responsibilities from those of the
federal government will help in determining the true costs of funding postal operations.
Citizens and businesses should pay no less and no more than what is required to fund
the Postal Service’s operations.
Here is the link to the OIG: http://www.uspsoig.gov/ (it is on their front page)
Full report: http://www.uspsoig.gov/foia_files/RARC-WP-10-001.pdf
Tuesday, January 19, 2010
Confusion and Fear re: Move Update Compliance
Still confused about the Move Update requirement? Wondering what the consequences for not complying might be? This article will attempt to remove the confusion and fear that is gripping many over the Move Update requirement.
Move Update:
Think of it like your Mom or Dad telling you to eat your vegetables, you may not want to eat them, but you now realize that they are good for you. It’s the same thing here!
Move Update is the requirement that forces mailers of Automation Standard and Commercial First Class Mail™ to do something to make sure that your address lists are up to date when you mail.
Why?• Costs the USPS 2 Billion /Yr to Return/Dispose of Undeliverable mail
• 17% of Consumers and Businesses move every year – 45 Million!
• 24% of all mail have some kind of address problem
• 2.72% of mail is never delivered
• 17% of all mail is delayed
Or, to put this into hard numbers:
• 10 Billion Pieces are affected each year.
• 1.6 Billion are Returned
• 1.985 billion are Forwarded
• 6.0 Billion are Discarded
OK – So how do I comply?
You need to comply with a Pre-Mailing method within 95 days of your mailing and then you can keep your list current by utilizing a Post-Mailing method.
For most of us, the easiest way is to use an NCOA-Link product that will satisfy it quickly and easily. Most Mail management software packages have a NCOA-link solution.
For our Satori Bulk Mailer customers, when they run their lists thru this process, it actually does 5 things to improve the deliverability, all without the hassle of exporting and re-importing the data. Satori is a full service NCOA Provider and will update registered move data up to 48 months old.
Satori’s “Move Update” features:
CASS – 1st step to break the address down to its component parts, Standardizes and corrects the Physical part of the address to USPS specifications
DPV – Delivery Point Validation – Further corrects the address to the actual delivery point and reports back if the secondary address info (Suite #, Unit #, Apt #) is accurate, missing or wrong.
LACS-Link – Changes old Rural Routes into physical delivery address –Helps emergency service providers locate rural addresses.
Suite-Link – Adds or changes Secondary address information for Businesses – (Suite #, Unit #)
Move Update – Fixes the Personal portion of the address by changing the addresses based upon moves registered with the USPS.
Are there other ways I can satisfy the Move Update requirement?
Yes, there are “Post-Mailing” methods such as using Ancillary Service Endorsements, ACS, or One Code ACS (IMB). All of these Post Mailing methods require that the list has gone thru some other “Pre-Mailing” method within 95 days of the mailing, and then you can use these “Post-Mailing” methods to keep the list current.
Pre-Mailing Methods:
NCOA or NCOAlink
Directly Acquired addresses
First-Class Mail used with approved Ancillary Service Endorsement
Fast-Forward
Post-Mailing Methods:
Ancillary Service Endorsements – Correct your data after the fact
ACS
One-Code ACS (IMB)
Exceptions:
Using Alternative Address Formats like “Current Resident/Occupant” are exempt, but not very personal. If the data came directly to you within 95 days of the mailing, like thru your call center, BRM or web site, those addresses would be OK. There are also exceptions if you can prove that your lists are 99% accurate or that you have a "Legal Restriction" prohibiting you from updating the address without authorization.
If you are using a Presort service, they offer a service called Fast-Forward that can apply the DPBC and forwarding address while co-mingling your mail allowing you some presort savings. The drawback is that the information is applied after your mail piece has been created so the corrected information doesn’t directly update your records.
Is there a way for me to take advantage of Better Address Quality without big changes to our I.T. processes?
Yes Document Control Software, can capture your Print Image Files and manipulate them prior to printing. It is mind boggling to see all of the things DCS can be designed to do. Not only can DCS improve address quality but it can merge multiple print streams, change background overlays, add OMR marks for automation processing by a Folder Inserter, add the postage Indicia into the address block and can even include Mail Piece Verification to ensure that every piece makes it into the mailstream.
What are the consequences for not complying with Move Update?
The key thing to realize is that the penalty will be applied to the entire mailing, not just those addresses that fail Move Update. When you sign the 3602 Mailing statement acknowledges that … “who omits information requested on this form may be subject to criminal and/or civil penalties, including fines and imprisonment.” The calculations for failure to comply are a little confusing. It is based upon the percentage of your mail that exceeds the minimum 30%compliance threshold. This percentage is applied to the entire mailing at $.07 per piece.
For example: 5000 piece mailing with 500 COAs (change of address on file with the USPS NCOA system) only 20% (100) were up to date, leaving 400 (80%) un-corrected. In order to comply with Move Update no more than 30% of COAs (150) can have un-corrected addresses. Penalty rate is calculated by subtracting USPS threshold 30% from the 80% not corrected to arrive at percent of mailing subject to a penalty, in this case its 50%.
Apply 50% penalty rate to entire 5000 piece mailing to determine number of pieces subject to .07 penalty in this case 2500 or $175.00
What are the chances of getting caught?
It is getting easier all the time for the USPS to catch this as their focus is absolutely on reducing costs. UAA (Undeliverable as Addressed) and FOE (Forwarding Order has Expired) mail are the biggest areas they have identified to save money. The mail today is becoming “Intelligent” with mailer identification embedded in the IMB (intelligent Mail Barcode) and IBIP (Information Based Indicia Program) meter indicia (All Phase 6 meters) it won’t be hard to find or account for as computers will do the hard work.
So stay compliant with Move Update and your mailing performance will improve, just like a healthy body that eats right and exercises should. Hopefully this has diminished your fears and confusion regarding Move Update requirement, so eat your vegetables, they’re good for you!
Move Update:
Think of it like your Mom or Dad telling you to eat your vegetables, you may not want to eat them, but you now realize that they are good for you. It’s the same thing here!
Move Update is the requirement that forces mailers of Automation Standard and Commercial First Class Mail™ to do something to make sure that your address lists are up to date when you mail.
Why?• Costs the USPS 2 Billion /Yr to Return/Dispose of Undeliverable mail
• 17% of Consumers and Businesses move every year – 45 Million!
• 24% of all mail have some kind of address problem
• 2.72% of mail is never delivered
• 17% of all mail is delayed
Or, to put this into hard numbers:
• 10 Billion Pieces are affected each year.
• 1.6 Billion are Returned
• 1.985 billion are Forwarded
• 6.0 Billion are Discarded
OK – So how do I comply?
You need to comply with a Pre-Mailing method within 95 days of your mailing and then you can keep your list current by utilizing a Post-Mailing method.
For most of us, the easiest way is to use an NCOA-Link product that will satisfy it quickly and easily. Most Mail management software packages have a NCOA-link solution.
For our Satori Bulk Mailer customers, when they run their lists thru this process, it actually does 5 things to improve the deliverability, all without the hassle of exporting and re-importing the data. Satori is a full service NCOA Provider and will update registered move data up to 48 months old.
Satori’s “Move Update” features:
CASS – 1st step to break the address down to its component parts, Standardizes and corrects the Physical part of the address to USPS specifications
DPV – Delivery Point Validation – Further corrects the address to the actual delivery point and reports back if the secondary address info (Suite #, Unit #, Apt #) is accurate, missing or wrong.
LACS-Link – Changes old Rural Routes into physical delivery address –Helps emergency service providers locate rural addresses.
Suite-Link – Adds or changes Secondary address information for Businesses – (Suite #, Unit #)
Move Update – Fixes the Personal portion of the address by changing the addresses based upon moves registered with the USPS.
Are there other ways I can satisfy the Move Update requirement?
Yes, there are “Post-Mailing” methods such as using Ancillary Service Endorsements, ACS, or One Code ACS (IMB). All of these Post Mailing methods require that the list has gone thru some other “Pre-Mailing” method within 95 days of the mailing, and then you can use these “Post-Mailing” methods to keep the list current.
Pre-Mailing Methods:
NCOA or NCOAlink
Directly Acquired addresses
First-Class Mail used with approved Ancillary Service Endorsement
Fast-Forward
Post-Mailing Methods:
Ancillary Service Endorsements – Correct your data after the fact
ACS
One-Code ACS (IMB)
Exceptions:
Using Alternative Address Formats like “Current Resident/Occupant” are exempt, but not very personal. If the data came directly to you within 95 days of the mailing, like thru your call center, BRM or web site, those addresses would be OK. There are also exceptions if you can prove that your lists are 99% accurate or that you have a "Legal Restriction" prohibiting you from updating the address without authorization.
If you are using a Presort service, they offer a service called Fast-Forward that can apply the DPBC and forwarding address while co-mingling your mail allowing you some presort savings. The drawback is that the information is applied after your mail piece has been created so the corrected information doesn’t directly update your records.
Is there a way for me to take advantage of Better Address Quality without big changes to our I.T. processes?
Yes Document Control Software, can capture your Print Image Files and manipulate them prior to printing. It is mind boggling to see all of the things DCS can be designed to do. Not only can DCS improve address quality but it can merge multiple print streams, change background overlays, add OMR marks for automation processing by a Folder Inserter, add the postage Indicia into the address block and can even include Mail Piece Verification to ensure that every piece makes it into the mailstream.
What are the consequences for not complying with Move Update?
The key thing to realize is that the penalty will be applied to the entire mailing, not just those addresses that fail Move Update. When you sign the 3602 Mailing statement acknowledges that … “who omits information requested on this form may be subject to criminal and/or civil penalties, including fines and imprisonment.” The calculations for failure to comply are a little confusing. It is based upon the percentage of your mail that exceeds the minimum 30%compliance threshold. This percentage is applied to the entire mailing at $.07 per piece.
For example: 5000 piece mailing with 500 COAs (change of address on file with the USPS NCOA system) only 20% (100) were up to date, leaving 400 (80%) un-corrected. In order to comply with Move Update no more than 30% of COAs (150) can have un-corrected addresses. Penalty rate is calculated by subtracting USPS threshold 30% from the 80% not corrected to arrive at percent of mailing subject to a penalty, in this case its 50%.
Apply 50% penalty rate to entire 5000 piece mailing to determine number of pieces subject to .07 penalty in this case 2500 or $175.00
What are the chances of getting caught?
It is getting easier all the time for the USPS to catch this as their focus is absolutely on reducing costs. UAA (Undeliverable as Addressed) and FOE (Forwarding Order has Expired) mail are the biggest areas they have identified to save money. The mail today is becoming “Intelligent” with mailer identification embedded in the IMB (intelligent Mail Barcode) and IBIP (Information Based Indicia Program) meter indicia (All Phase 6 meters) it won’t be hard to find or account for as computers will do the hard work.
So stay compliant with Move Update and your mailing performance will improve, just like a healthy body that eats right and exercises should. Hopefully this has diminished your fears and confusion regarding Move Update requirement, so eat your vegetables, they’re good for you!
Monday, October 19, 2009
MQC Certification Program being discontinued and replaced with MDP
The Mailpiece Quality Control (MQC) Specialist certification has been around for a very long time. It was an open book, 100 question multiple choice, on-line examination that was inexpensive, comprehensive and challenging to achieve. It was good for two years and has thousands amongst its ranks. The test was pulled in April with the understanding that it would be up-dated and back on line in July. Turns out it was more than the USPS could handle as the folks in that department were 100% committed to IMB implementation. They simply did not have the resources to update the program, even when I and others offered to do the service for free.
They chose instead to transition another existing in-house certification program called the MDP - Mailpiece Design Professional to an On-Line format. We are told that their goal is to have this on-line by the National Postal Forum in April.
Looking over the curriculum, it is very comprehensive, with more emphasis on Letters and Flats than with Publications or Parcels. The MDP program, from what I could see still needs work to include information on IMB, Flat Addressing Standards, Tabbing Changes for Booklets and more.
So although I am very disappointed in the manner in which this transition is occurring, there is nothing I can do to change it. Change is after all the one constant in our industry, so I look forward to embracing it. My intentions are to be able to deliver training to you, our customers and colleagues, to streamline your ability to earn the MDP certification.
They chose instead to transition another existing in-house certification program called the MDP - Mailpiece Design Professional to an On-Line format. We are told that their goal is to have this on-line by the National Postal Forum in April.
Looking over the curriculum, it is very comprehensive, with more emphasis on Letters and Flats than with Publications or Parcels. The MDP program, from what I could see still needs work to include information on IMB, Flat Addressing Standards, Tabbing Changes for Booklets and more.
So although I am very disappointed in the manner in which this transition is occurring, there is nothing I can do to change it. Change is after all the one constant in our industry, so I look forward to embracing it. My intentions are to be able to deliver training to you, our customers and colleagues, to streamline your ability to earn the MDP certification.
May Rate Change - Good News - No overall increase!
Jack Potter, (our Postmaster General) announced last week that there will not be an exigent rate increase for the Market Dominant products that are normally adjusted in May. Normally these products that you know as First Class Mail, Standard Mail, Periodicals and single piece Parcel Post have their prices adjusted by an amount that does not exceed the increase in the national CPI. In extreme or “exigent” circumstances the Post Office can still increase the rates beyond the CPI. You could certainly argue that the USPS has a good case to do so with tremendous year over year declines in mail volumes and financial losses.
Mr. Potter puts forth his reasoning quite eloquently: “This is the right decision at the right time for the right reason. Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.”
“While increasing prices might have generated revenue for the Postal Service in the short term, the long-term effect could drive additional mail out of the system. We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace. Changes in pricing for our competitive products — Priority Mail, Express Mail, Parcel Select, and most international products — are under consideration. We expect to announce a decision in November.”
Mr. Potter puts forth his reasoning quite eloquently: “This is the right decision at the right time for the right reason. Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.”
“While increasing prices might have generated revenue for the Postal Service in the short term, the long-term effect could drive additional mail out of the system. We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace. Changes in pricing for our competitive products — Priority Mail, Express Mail, Parcel Select, and most international products — are under consideration. We expect to announce a decision in November.”
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