Free Parcel Insurance for Priority Mail

$50 of Free Insurance for Commercial Base and $100 of Free insurance for Commercial Plus was announced a couple weeks ago by Parcel Magazine's Webinar: "How to Take Advantage of Major New USPS Infrastructure Improvements" Effective date is July 28, 2013

Ina Steiner in her blog recently posted some clarifications to questions about the program:

USPS Clears up Questions about Priority Mail Insurance

Online merchants who rely on Priority Mail to send packages got some good news - beginning July 28th, domestic Priority Mail will include, without additional charge, either $50 or $100 insurance for loss, damage, and missing merchandise.

But shippers had trouble determining under which situation they would receive $50 in free insurance, and in which situation they would receive $100 in free insurance. Spokesperson Darleen Reid-DeMeo addressed the question for EcommerceBytes on Monday.

"Customers walking into a PO (Retail) or using USPS.com to ship generally will get $50 Priority Mail Insurance included with their purchase. Commercial customers who ship large volumes in most instances will receive $100 Priority Mail Insurance included on each package. These customers are volume driven and provide electronic manifests."

But, as many merchants know, there are two commercial rates - Commercial Base (small and medium sized sellers generally get this rate when using online postage services), and Commercial Plus, for high-volume shippers.

According to Eric Nash of Stamps.com, the $100 Priority Mail insurance is only for Commercial Plus customers. "Overall, Stamps.com prints Commercial Base pricing for all packages and the USPS will be offering $50 of free coverage in Priority Mail for customers." Those customers who have been approved for Commercial Plus pricing from the USPS will automatically receive $100 of coverage for all of their Priority Mail packages when they print their shipping labels using Stamps.com.

"It's important to note that this free insurance coverage is being added from the USPS for shipping labels that include the Intelligent Mail package barcode," Nash said, and since the insurance is provided from the USPS, all claims would need to be processed with the USPS at usps.com/domestic-claims.

Endicia Product Marketing Manager Jessica Foth said Endicia would also support the new free USPS insurance coverage for all of its customers automatically, both for Commercial Base and Commercial Plus shippers.

Another question raised by a merchant was whether they'd be able to purchase additional insurance coverage beyond what the USPS was providing with Priority Mail shipments. Reid-DeMeo said additional insurance coverage may be available for an additional fee.

The new, free insurance for Priority Mail comes as the USPS rebrands its Express Mail product under the Priority Mail umbrella - as of July 28th, it will be called Priority Mail Express. As part of the changes, all Priority Mail packages will have an estimated service of 1 day, 2 days, or 3 days that will be displayed on the payment receipt, online shipping label and in the USPS Tracking information.

Reid-DeMeo said nothing has changed with regard to insurance for Priority Mail Express shipments - up to $100 of insurance is still included at no extra charge with Domestic Priority Mail Express shipments, and for international shipments, document reconstruction insurance up to $100 and merchandise insurance up to $200 is included, at no extra charge, against loss, damage, or missing contents, she said.

Current prices for Priority Mail will remain in place. See more information in Five Things to Know about USPS Changes to Priority Mail

Presorted First Class Mail - Court rules with PRC to raise rates congruent with costs to serve

Courthouse News Service

(CN) - The Post Office's discount for presorted mail cannot exceed the cost the office avoids by not having to sort the mail itself, the D.C. Circuit ruled.
     "Through snow and rain and heat and gloom of night, the Postal Service delivers the mail," Judge Brett Kavanaugh wrote for the three-judge panel. "But the Postal Service does so under the watchful eye of a separate independent agency, the Postal Regulatory Commission."
     The Postal Regulatory Commission establishes the rates that the U.S. Postal Service may charge for mail.
     In a recent order, the commission found that the U.S.P.S. is giving too large of a discount for presorted first-class mail compared to single-piece first-class mail.
     While the discount encourages presorting, lowering costs for the Postal Service, the discount currently exceeds the cost the Postal Service would pay to sort the mail itself.
     "The Postal Service is unhappy because it believes that it needs to offer bulk mailers large discounts so that bulk mailers will continue to use the U.S. Postal Service rather than, say, email," Kavanaugh wrote.
     It sought review of the commission's order, but the D.C. Circuit shot it down Tuesday.
     "We think the correct statutory analysis here is extremely simple and supports the commission: the discount that the Postal Service offers for presorting is a 'rate discount[] provided to mailers for ... presorting,'" Kavanaugh wrote. "Therefore, it is clear that, as the commission concluded, the amount of the discount that the Postal Service may offer for presorting is subject to the statute's workshare discount limit, and the discount may not exceed the cost that the Postal Service avoids as a result of the presorting."
     The commission reasonably concluded that customers choose to presort their mail based on the lower price, and a 1 percent increase in price will cause a "significant change in demand," according to the four-page decision. 

Priority Mail to add free insurance?

Building on the brand

USPS makes changes to its expedited product lineup

USPS is making changes in its expedited products to add to their value and make the Postal Service more competitive in the shipping marketplace. 

Starting July 28, Express Mail will be renamed Priority Mail Express to make use of the strong Priority Mail brand. All characteristics of the current Express Mail service will remain unchanged.

In addition, Express Mail International will be renamed Priority Mail Express International. The Express Mail Corporate Account will be called USPS Corporate Account.

The Postal Service also is seeking approval from the Postal Regulatory Commission to automatically include insurance — at no additional charge — with most Priority Mail pieces. Customers will receive $50 or $100 of insurance coverage, depending on the postage payment method used.

“We’re taking steps to keep the Postal Service competitive and meet customer needs,” said New Products and Innovation VP Gary Reblin. “We can continue to grow our package business by innovating, offering customers a variety of delivery options and seizing new opportunities for growth, especially from e-commerce.”

Click here for more information on these changes. Additional details will be coming in the weeks ahead.

Implementation of Full-Service Intelligent Mail Requirements for Automation Prices

The Postal Service will soon be releasing the following Final rule (publishing in the Federal Register) - which will open up a window for you, the mailer, to comment.

My Take on the whole Full Service IMB Mandate:

The USPS is pushing ahead with this agenda which is a mistake.  There is a disconnect between making the mail run more efficiently and making the USPS an easy to use option for the American public.  In other words, operations is running the show and Marketing (think sales) will be suffering the consequences.

How is this going to effect the marketplace?
Time will tell, how this all will unfold.  Looking into my crystal ball, I see a lot of frustrated mailers giving up, turning their mail over to professional Letter Shops and or moving their marketing dollars to other media.  Another nail in the coffin for mail in America. Hopefully these folks will reach out to industry for help in making this transition.

Whats Changed?
The Post office recently implemented changes to the testing environment (TEM) that will help mailers make this change.  They have finally changed from a long and tedious process to a simplified one step process -  IF you have vendor software that has been pre-approved.

Satori software, was one of the leaders in getting this change done and we here at Shipware are proud to represent and make these inexpensive packages available for all of our clients.

So what is "Full Service IMb anyway?  I don't want to read 57 pages of postal speak!
In a nutshell its the next step in full visibility intelligent mail. All pieces in the mailing, along with their respective containers will have a unique serial number and will be linked together.  The documentation will need to be transmitted electronically.  It requires critical information regarding the mailing relationships: who is doing the mailing who it is for is required (by/for).

So is there any good news?
Yes, if you want to keep getting Automation discounts on your mail.  There are some additional good business reasons why you may wish to embrace this change.  Free "One Code ACS" - that is the electronic form of address correction data. Free "One Code Confirm" -this the is ability to track either your out-bound or in-coming mail as it travels thru the mail stream.

If you believe that the Post Office should run as efficiently as possible then this change will be good news to you as it will help them perform detailed analysis on their performance.  We as consumers are already benefiting from this as we can see how long delivery is averaging at processing centers around the country.  The start the clock data, is a key performance piece, and part of the PAEA (Postal Accountability and Enhancement Act of 2006) that reorganized the P.O.  We have seen big improvements in all aspects of their on time performance - so we know it works.  This data is helping them transition to a leaner operation.

Any other good news?
Well, how about no more permit fees? yup, if 90% of your mail is Full Service, those will be waived! How about the ability to drop your mail at most BMEU facilities?  How about a Tech credit of up to $5000 for making the change to Full Service? This and more awaits, like it or not, this is the future of Automation Mail.

There were 52 comments on the preliminary ruling and these have all been addressed in this Final Rule, in many case with the same pre-packaged answer.

The Postal Service is revising Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM®), throughout various 
sections to modify eligibility requirements for mailers to qualify for automation 
prices.

Effective January 26, 2014, use of “full-service” Intelligent Mail®
is required to qualify for automation prices for postcards (First-Class Mail®
only), letters, and flats when mailed using the following services: First-Class Mail, Standard Mail®
and Periodicals®; and for flats mailed at Bound Printed Matter®
prices. Additionally, the 10/24 transitional barcoded tray label format is eliminated,
and mailers are required to use the 24-digit Intelligent Mail barcode (IMb™) 
format on tray, tub, and sack labels.
EFFECTIVE DATE: January 26, 2014.


For all 57 pages of Fun and Excitement - actually it is a pretty comprehensive and easy to understand read of everything IMb
https://ribbs.usps.gov/intelligentmail_latestnews/documents/tech_guides/FinalRuleFullService.pdf

Congress Mandates Saturday Mail Delivery

From Mail: The Journal of Communication Distribution

The U.S. Congress has sent President Obama a bill mandating regular Saturday mail service. It is part of the 2013 continuing resolution to fund the federal government, which the President is expected to sign.

This action comes within weeks of the USPS announcement to end regular Saturday mail service. Postmaster General Patrick Donahoe laid out plans in February to end regular Saturday service and maintain package delivery. Congress found common ground in mandating the status quo remain, as it has done in each of the appropriation bills passed since reorganization in 1971.

Senator Tom Coburn (R-OK) and Representative Daryl Issa (R-CA) questioned the vagueness of the new law and told the USPS Board of Governors to move forward with their plans. "The Board of Governors has a fiduciary responsibility to utilize its legal authority to implement modified 6-day mail delivery as recently proposed," the lawmakers said.

A report by the Government Accounting Office takes issue with the USPS' legal rationale that congressional riders requiring service were not valid in a continuing resolution. The GAO said it does because "a continuing resolution maintains the status quo regarding government funding and operations."

A spokesman for the Postal Service said the Board of Governors will chart its next move at its April meeting.

Will UPS Go On Strike?

By Rob Martinez, DLP, CMDSS, President and CEO, Shipware LLC

As the calendar inches closer to a July 31 expiration of the collective bargaining agreement between
United Parcel Service (UPS) and the International Brotherhood of Teamsters (IBT), the parcel industry is
beginning to ask the question, will UPS go on strike?

In my view, it is highly unlikely. UPS is simply too profitable and has too much to lose to allow a labor
dispute with the IBT to occur. But then again, I incorrectly said the same thing in 1997 prior to the
eventual strike that shut UPS down for 15 days.

At issue are differences over two master labor agreements set to expire at the end July 2013: (1) The
2008-2013 UPS National Master Agreement for small parcel that covers approximately 250,000 IBT
members; and (2) The 2008-2013 UPS Freight Agreement which impacts about 13,000 workers.

Although the two sides began negotiations ten months early and progress has reportedly been made, a
deal has not yet been reached. In each of the past two negotiations (2002 and 2008), a deal was
reached well before the existing agreements expired.

What’s the status of contract negotiations, on what issues do the sides remain far apart, and when is
resolution expected?

While UPS will not discuss the substance of what is said at the negotiating table, UPS has confirmed that
progress is being made, the relationship is a positive one, and it fully believes an agreement will be
reached prior to the expiration of the existing contract. IBT, for its part, has provided regular updates on
its website (www.teamster.org) every few weeks.

Clearly, the 10-month head start to negotiations has led to early progress. Initial negotiations have
centered mostly on “non-economic” issues. Primary IBT issues and concerns are:

• Limiting UPS’s ability to subcontract or use non-IBT supervisors for union work;
• Allowing Union employees to accumulate discretionary days;
• Giving part-time Union workers the opportunity to move into full-time work;
• Concerns regarding work conditions, and health/safety issues;
• Excessive overtime for drivers that work 9.5 hours on three days in one work week;
• “Harassment” issues, including non-union UPS supervisors riding with Union drivers that file grievances;
• Protecting Teamster jobs threatened by the growth of UPS SurePost, a parcel product in which lightweight, low value, residential packages are tendered to the US Postal Service for “final mile” delivery.

The two sides have reportedly reached tentative agreements on many of these non-economic issues,

although a source stated the harassment issue is still being hotly negotiated.

More recent labor talks have involved “economic” matters including pensions, health care and wages.

What does UPS want? Again, a long standing policy of UPS is not to negotiate union agreements

through the media. Therefore, while UPS is publically short on describing substantive issues, it has

repeatedly stated that it simply wants a good contract that rewards its employees while allowing UPS to

be flexible and competitive in the marketplace.

Both sides remain far apart on health insurance. In recent bargaining sessions, UPS gave Teamster

negotiators a presentation supporting their position that workers should share some of the burden of

escalating healthcare costs. While IBT officials committed to working hard to identify creative solutions,

Ken Hall, Teamster’s General Secretary-Treasurer and Package Division Director drew the line in the

sand by declaring his goal is that “Teamsters at UPS (and UPS Freight) don’t pay a cent towards their

health insurance”.

IBT also proposed significant wage and pension increases, in particular to starting wages for part time

workers. According to a document posted on its website, Teamsters for a Democratic Union (TDU), the

starting wage for all UPS part-timers, other than sorters and pre-loaders, has been frozen at $8.50/hour

since 1987.

However, it is unlikely that much progress can be made on wages and other economic proposals until

both sides have come to terms on healthcare.

While both sides have stated the goal of reaching a tentative agreement by the end of March, the

debate on healthcare costs has proved more complex than initially believed, and it has slowed progress.

Negotiations are reportedly scheduled through next week, but are likely to break off before resuming at

some point in April.

Once a handshake agreement has been reached, IBT and UPS will make a public announcement. IBT will

then send the contract to UPS Teamster-represented employees for approval and ratification, which can

take several weeks.

FedEx has reportedly met with many volume UPS shippers stating that they will not accept new

customers should UPS workers strike, and that if shippers wanted to shift business from UPS to FedEx,

now is the time.

However, as reported in the Wolfe Trahan “The State of Freight” first quarter 2013 shipper survey

results, 82% of shippers said they have no plans to shift parcel volumes to FedEx during IBT/UPS contract

negotiations. If a tentative agreement has not been reached by the end of March, Wolfe Trahan expects

to see an acceleration of volume shifts to alternate providers including FedEx, US Postal Service and

regional parcel carriers.

Rob Martinez, DLP is President & CEO of Shipware LLC, a parcel auditing and consulting company based in San Diego, CA. He welcomes questions and comments and can be reached at rob@shipware.com.

Postal Service Announces New Delivery Schedule

Six Days of Package Delivery, Five Days of Mail Delivery Begins August 2013

WASHINGTON — The United States Postal Service announced plans today to transition to a new delivery schedule during the week of August 5, 2013 that includes package delivery Monday through Saturday, and mail delivery Monday through Friday. The Postal Service expects to generate cost savings of approximately $2 billion annually, once the plan is fully implemented. “The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” said Patrick R. Donahoe, Postmaster General and CEO. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.” Over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages. However, recent strong growth in package delivery (14 percent volume increase since 2010) and projections of continued strong package growth throughout the coming decade led to the revised approach to maintain package delivery six days per week.  “Our customers see strong value in the national delivery platform we provide and maintaining a six-day delivery schedule for packages is an important part of that platform,” said Donahoe. “As consumers increasingly use and rely on delivery services — especially due to the rise of e-commerce — we can play an increasingly vital role as a delivery provider of choice, and as a driver of growth opportunities for America’s businesses.”   Once implemented during August of 2013, mail delivery to street addresses will occur Monday through Friday. Packages will continue to be delivered six days per week. Mail addressed to PO Boxes will continue to be delivered on Saturdays. Post Offices currently open on Saturdays will remain open on Saturdays.   Market research conducted by the Postal Service and independent research by major news organizations indicate that nearly seven out of ten Americans (70 percent) supported the switch to five-day delivery as a way for the Postal Service to reduce costs in its effort to return the organization to financial stability,   Support for this approach will likely be even higher since the Postal Service plans to maintain six-day package delivery. The Postal Service is making the announcement today, more than six months in advance of implementing five-day mail delivery schedule, to give residential and business customers time to plan and adjust. The Postal Service plans to publish specific guidance in the near future for residential and business customers about its new delivery schedule. Given the ongoing financial challenges, the Postal Service Board of Governors last month directed postal management to accelerate the restructuring of Postal Service operations in order to strengthen Postal Service finances. “The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation,” said Donahoe. “The Postal Service has a responsibility to take the steps necessary to return to long-term financial stability and ensure the continued affordability of the U.S. Mail.” The operational plan for the new delivery schedule anticipates a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented. The Postal Service is currently implementing major restructuring throughout its retail, delivery and mail processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion, reduced the size of its career workforce by 193,000 or 28 percent, and has consolidated more than 200 mail processing locations. During these unprecedented initiatives, the Postal Service continued to deliver record high levels of service to its customers. While the change in the delivery schedule announced today is one of the actions needed to restore the financial health of the Postal Service, legislative change is urgently needed to address matters outside the Postal Service’s control. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.