The first two months of 2011 brought two big changes from the USPS: rollback of the date for implementing Intelligent Mail Barcode and a postage rate increase.
In a January 2011 announcement that surprised the mailing industry, the USPS cancelled the May 2011 mandate for mailers to use the Intelligent Mail Barcode (IMb) or lose the automation-based postage discount. IMb is the method adopted by the USPS to collect information about its service performance, as required by the Postal Accountability and Enhancement Act (PAEA) of 2006. Since 1990 the USPS has measured its delivery performance for retail mail—that is, mail entered via collection box or lobby chute—but business mail has not been included in the measurement.As of November 2010, there were 1,033 mailers using IMb; 700 of them using full service. More than 39 billion pieces of mail had been processed using full service IMb. However, 40% of automation mail still uses the POSTNET barcode, indicating that much of the mailing industry does not yet see the benefit of IMb for their daily operations.
This was confirmed in an audit conducted by the USPS Office of the Inspector General (OIG) to determine customer satisfaction with full service IMb. The OIG surveyed 290 mail owners and 75 mailing service providers and published the results in November 2010. According to the audit report, the respondents cited high program startup costs and lack of useful features as the reason for non-participation in full service IMb. Simply stated, the cost of producing full service IMb mailings were greater than the discounts offered. In addition, some mailers stated they don’t need the tracking information provided by full service IMb. What the mailers really want is timely mail delivery.
Even though mandatory use of IMb has been delayed, quick printers should still move forward with using it instead of the POSTNET code. IMb is in everyone’s future, since it is the way the USPS has chosen to gather the service performance statistics required by the PAEA. For most mailers, there is no out-of-pocket cost associated with implementing basic IMb. For a few, IMb may require a software upgrade for inkjet addressing equipment. For mailers with very old inkjet equipment, it may require purchase of new inkjet heads.
Postmaster general Pat Donahoe has stated that the issue of when full service IMb will become mandatory has not yet been resolved within the USPS. He added that full service IMb should not be forced upon small mailers for whom there is very little or no benefit.
To help mailers migrate to IMb, the USPS is continuing its twice monthly IMb webinars until May 3, 2011. Reservations are not required; each session is available on a first come, first served basis. For a listing of available seminars and instructions for participating, visit ribbs.usps.gov/index.cfm?page=intellmaillatestnews.
Postage Rates Increase in April
On February 16, 2011 the Postal Regulatory Commission (PRC) approved the January 13 filing by the USPS to raise postage rates. The rate increase will become effective on April 17, 2011. The rate increase is very small—averaging less than 2% per class of mail—because that is the maximum allowable by the CPI cap.
First class mail, single piece: The first class single-piece rate will stay at 44 cents, but the second ounce will rise from 17 cents to 20 cents. The rate for single-piece postcards will go up one cent to 29 cents.
First class mail, presorted: Automation-compatible, three-digit sortation first class mail rises by 0.8 cents to 36.5 cents and five-digit sortation by 0.5 cents to 34 cents. Five-digit automation letters account for almost 50% of the volume for automation letters. By keeping the increase below the average, the USPS is seeking to help retain commercial customers.
Standard mail: The overall increase is 1.739%, comprised of letters (1.81% increase), flats (0.835% increase), parcels and NFMs (11.346% increase). High density and saturation letters, flats and parcels increase by 0.615% and 0.403%, respectively, while carrier route letters, flats, and parcels increase by 1.376%. The USPS strategy here is to mitigate the effect of the rate increase on catalog mailers, whom the USPS sees as a future growth segment.
The new rates are posted at www.usps.com/prices/pricechanges.htm.
Growing Cost of Providing Mailing Services
As the USPS continues its plan to improve mail processing efficiency and control mail undeliverable as addressed, the fixed cost for mailers continues to rise. Here are typical annual fixed costs to be in the mailing business:
• One or more mailing permits: $195 each
• Annual renewal of CASS/DPV updates: $995 and up, depending on software provider
• NCOA Link service for move update: $795 and up for unlimited service, or $40 per file submission
Added together, the minimum fixed cost is $1,985 per year, or $165 per month. For a quick printer with a low mail volume (fewer than 20,000 pieces per month of regular, recurring work), the fixed cost is the equivalent of $8.25 per thousand pieces of mail processed.
USPS Online Aids to Mailers
The USPS continues to make useful tools for business mailers available online. Here are two recent additions.
Postage rate calculator
The Postal Explorer website provides an easy way to calculate postage costs for all shapes and classes of mail, including the piece/pound rate. Called the Business Calculator, the tool enables CSRs to compare postage rates using different classes of mail or preparation methods to get a complete picture of the cost to customers of both postage and mailing services. This will enable CSRs to quote the lowest overall price and take the customer’s focus off postage costs alone.
Find the Business Calculator at pe.usps.com (click on business in the upper left frame) or go directly to dbcalc.usps.gov. For standard mail, the calculator covers both regular and non-profit rates.
Courtesy mail artwork generator
Mailers can now create the artwork for courtesy reply mail (CRM) online.
CRM is a pre-addressed card or envelope that requires the respondent to apply postage before mailing the reply back. CRM is frequently used in billing documents such as invoices and statements and makes it convenient for a customer to return a payment. CRM does not require any USPS permits or fees.
To create CRM artwork online, simply go to www.usps.com/replymail/welcome.htm.
If you have a PostalOne! account you are a registered user. If do not have an account, you will need to register. You will then proceed through a series of steps (indicating the size of the return mail piece, including a return and outbound address) and preview the resulting CRM artwork.
The final step is to create a PDF or .EPS file that you can download.
Nancy DeDiemar is the president of Printing Resources of Southern California, a quick print shop in Upland, CA, offering printing, copying, electronic prepress, and mailing services. Nancy is the co-publisher of Printips (www.printips.com), a newsletter subscription service for printers. Contact her at Nancy@printingresources.com.