Priority Mail: Full-service Intelligent Mail: Should You or Shouldn’t You?

On April 18, 2013 the USPS announced it had taken the last step to finalize new requirements to mail at automation-based postage rates by publishing a notice in the Federal Register. Effective January 26, 2014, mailers must use full-service Intelligent Mail to qualify for automation pricing when mailing postcards, letters, and flats as first-class presorted mail; letters and flats as standard mail; for periodicals; and for flats mailed as bound printed matter. This means using the Intelligent Mail barcode (IMb) on the outbound address and the 24-digit IMb on tray, tub, and sack labels.

What is Intelligent Mail?

Intelligent Mail is an important part of the USPS strategic vision to make all mail pieces visible from the time of entry into the mail stream to delivery at the final destination. This visibility provides operational benefits to the USPS since it will enable better planning and more efficient use of USPS resources if the content and makeup of mail is known in advance. For mailers and mail service providers, Intelligent Mail means the ability to locate an individual mail piece as it makes its way through the various processing and delivery steps.

Intelligent Mail was first introduced in January 2009 in two forms: basic and full-service. Generally, basic service was a replacement for the POSTNET barcode with the addition of address correction services, but no ability to track each individual mail piece. The USPS always intended basic service as a transition to full-service rather than a permanent part of Intelligent Mail.

 

Full-service Tech Credit

From 2009 to 2012, the USPS worked with mailers, software vendors, and mail service providers to simplify, refine, and improve the full-service option and ease the transition from basic to full-service for mailers. As part of this process, the USPS developed an incentive called the Full-service Technology Credit (tech credit) to help offset the investment required for hardware and software changes to support full-service mailings. Mailers did not apply for the tech credit; rather, the eligibility was established by the USPS on the basis of the number of full-service-eligible mailings submitted under individual Customer Registration ID (CRID) numbers over a 12-month measurement period.

Mailers who qualified for the tech credit received letters in the early part of 2013 notifying them of the credit amount that can be redeemed in postage. The amounts are not insubstantial. For 125,000 to 500,000 eligible pieces, the credit is $2,000; between 500,000 and two2 million, the credit is $3,000; and more than two million, the credit is $5,000.

The tech credit is like a prepaid debit for postage, though it can only be applied to full-service mailings containing 90 percent or more full-service pieces. Redemption is over a 12-month period beginning June 2013, and is claimed through eDoc submission using Mail.dat or Mail.XML. Postal Wizard submissions are not eligible. If a single mailing does not use all the tech credit, the balance can be applied to future mailings.

 

Steps to Implement Intelligent Mail

Broadly speaking, the steps for full-service Intelligent Mail are straightforward: obtain a Mailer ID from the USPS, generate and print the IMb as part of the outbound address (requires use of an IMb font, available for download from the USPS), schedule mail entry appointments through the Facility Access and Shipment Tracking (FAST) system, and submit the postage statement through eDocs using the Mail.dat or Mail.XML file format. Mailing service providers must also provide information about the mail owner (i.e.: the entity for which the mailing is being done) for any mailing over 5,000 pieces.

Mailers must be authorized by the USPS to submit eDocs. The process for this is called Test Environment for Mailers, or TEM testing. Basically, the mailer prepares from one to five types of Mail.dat files and submits them as test cases. The USPS provides feedback and approval for full-service Intelligent Mail submissions. For many mailers, this has been the most time-consuming part of becoming full-service-eligible. Once eligible for full-service Intelligent Mail, the mailer needs to do three things: print a unique ID to each mail piece, create unique container tags, and create the eDoc.

 

Help for Transition to Intelligent Mail

Because the switch to full-service Intelligent Mail is so important, the USPS and most software vendors are now offering a lot of support to mailers making the transition. For its part, the USPS is working on ways to make TEM testing faster and easier as well as providing webinars and information on the RIBBS website. Software vendors are offering webinars, instruction manuals, and even step-by-step guidance through the Intelligent Mail qualification process.

Mailing service providers do not need to be afraid of full-service Intelligent Mail. Like all major technology-based steps the USPS has taken since reclassification in 1996, the requirements initially sound formidable—and, in fact, may have been so for early adopters. But as the January 2014 deadline nears, there is increased activity from many sources to help mailers take the needed steps for compliance.

 

Should Small Mailers Make the Transition?

It has been many years since the USPS began its transition to technology-based mail processing. First in relatively easy-to-implement steps (like CASS-certification), and later in requirements that had more impact on production requirements and cost (like move update compliance in 2008), the USPS requirements have presented mailers with a choice: bear the costs of compliance, or forego automation-based postage discounts.

I believe January 21014 is the latest example of a decision point for mailing service providers who handle a small volume of mail annually.

I define “small volume” as fewer than 120,000 pieces annually, or less than 10,000 pieces per month. Another measurement would be any mailer who did not receive a tech credit from the USPS.

With the fixed recurring cost of being in the mailing business currently at a minimum of $2,200 annually for a mailing permit and the subscriptions to mail list management software and National Change of Address (NCOA), before adding any costs for full-service Intelligent Mail or for track-and-trace services to decipher the information generated by Intelligent Mail, small mailers may find that full-service compliance adds more extra cost than the postage savings through automation discounts.

Besides the cost, mailers will also have to pass additional verification steps related to Intelligent Mail for each mailing presented for acceptance. This means more chances that a mailing will not be compliant, resulting in a delay for mail entry and frustration for the mailer.

Therefore, as counterintuitive as it seems, it may be less expensive and more efficient to charge customers the automation rate for postage, even though the discount is not claimed—meaning the mailer will collect less for postage than the actual cost. This is a business and customer service decision that small mailing service providers will need to make without delay.

For mailers who are already committed to making the transition to full-service Intelligent Mail, the time to begin is now. Only six months remain before the January 26, 2014 implementation date, and mailers will want to be fully comfortable with printing the full-service IMb on mail pieces and container tags, making appointments for entry using FAST, preparing Mail.dat files, and submitting documentation through eDocs.

 

Nancy DeDiemar is a former chairman of NAQP and Printer of the Year. She is the co-publisher of Printips (www.MyPRINTResource.com/10206473), a newsletter subscription service for printers. Contact her at Nancy91762@gmail.com.

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