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Industry Alert: New Postal Rates Effective May 11, 2009
Postage Rates Increase for Standard and First Class
Penalties for Noncompliance of Move Update Procedures Postponed
USPS Considering Summer Sale to Increase Mail Volume
Postage Rates Increase for Standard and First Class
On May 11, 2009 the price for a first class stamp will go from 42 to 44 cents. This is about 4.8 percent and is slightly higher than the percentage that Standard Nonprofit mailings will increase on the same day. Overall, the increase across all classes is about 3.8%, which is tied to the Consumer Price Index.
However, increases vary widely among rate classes and range from 1 to 55% (for some boxed card mailings). In fact, some non-automation rates are decreasing – but not enough to justify taking mail that would otherwise qualify for automation into the non-automation category.
For mailers of machinable letters weighing 3.3 ounces or less, the increases for individual rate classes range from 3.9% for 5-digit sort with no entry point discount to 7.1% for mixed ADC (Area Distribution Center). But since the make-up of every file is different, the best way to know for sure how the new rates will affect you is to run a test presort on a file you mailed before May 11. Many service providers, including PMG, are happy to provide postage analyses free of charge.
Penalties for Noncompliance of Move Update Procedures Postponed
The 7 cent per piece penalty for noncompliance with last year’s Move Update requirements for standard mail was postponed yet again, this time until January 10, 2010. But that doesn’t mean that the rules are relaxed. We still need to update our lists through NCOA or other approved method within 95 days of the mail date.
USPS Considering Summer Sale to Increase Mail Volume
The USPS wants to incent large mailers (defined as having mailed at least one million pieces between October 1, 2007 through March 31st, 2008) to increase their mail volume this summer. So it will file a proposal with the Postal Regulatory Commission to ask for permission to have a “Summer Sale”. If approved, discounts will apply during the period of June 15 - September 15, 2009, and again during the same time period in 2010.
A 20-30% discount will be offered on mail volume over and above that mailer's past mailing volume. The Postal Service would establish a base mail volume for each mailer derived from that mailer's mailings from June 15 to September 15, 2008 adjusted downward by the current mail trends for that mailer during the first two quarters of Fiscal Year 2009. Any mail volume above that baseline would receive the “summer sale” price. And discounts earned will be given in the form of a rebate after the sale period ends.
Due to the time and resource needed to establish a separate base line for each mailer, it’s likely that only about 4,000 of the largest Standard mailers will be eligible this year.
At this point, there are more questions than answers relative to this topic. And until the Postal Regulatory Commission renders their decision, everything is speculative. However, we’ve just learned from our contact at the DMA Nonprofit Federation that they plan to sponsor a webinar next month on the subject. In the meantime, we’re watching this story closely for you.
Let PMG help you lower your postage costs efficiently. Contact Eva Bowie at eva@pmgdirect.net today!