Understanding USPS® Service Changes & How They Impact Your Business

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A 2012 practical guide from Pitney Bowes. This presentation covers USPS® pricing, program and service level changes.

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  • Welcome everyone to our seminar today looking at some changes which have occurred or are on the horizon with the United States Postal Service.
  • Most business mailers have a number of questions regarding the various changes currently taking place with the postal service. We’ve all seen news coverage regarding shifting mail volumes, and how the USPS is reacting in order to maintain profitability and service levels. As a mailer you probably want to understand what those changes mean to your business and gain ideas on how you can mitigate the impact of those changes.Over the next 40 minutes or so, we’re going to look at modifications to pricing, rate structures, and USPS services. Then we’ll look at various strategies to offset changes which could negatively impact your operation and take advantage of shifts which are beneficial to you. Many of these can actually help you reduce your postage spend and improve the level of service you receive!We’ll finish by directing you to some resources you can use on an ongoing basis to stay on top of things. We’ll also take time to answer your questions. OK- Let’s get started!
  • First, let’s look at some changes to pricing which have occurred this year…
  • As you're all aware last January the Postal Service increased the rates and pricing for both competitive and market dominant products. When the USPS considers pricing changes they group their various services in two different ways. TRANSITIONMarket dominant products are those services only the USPS provides, such as domestic first-class mail or standard mail and International First-class mail. In addition certain kinds of parcelservices such as media mail, Library mail, or bound printed matter offer low price point services only the USPS provides. Most USPS extra services are also viewed as market dominant. TRANSITIONMarket dominant prices changes are based on the consumer price index. With a few exceptions, Market dominant service price increases cannot exceed the previous year’s CPI- As such they have an effective price ceiling attached to them. Competitive products are those services which the United States Postal Service are in competition against various private carriers such as United Parcel Service or Federal Express. Services include things like Priority Mail, Express Mail and various international services which compete with DHL, UPS and FedEx. Those prices are changed on the basis of economic realities and have certain profit margin requirements, effectively creating a ‘floor’. As such there are no limits on how much the USPS can charge on the high end, but restrictions on how low they can drop their pricing.
  • The January changes to the market dominant products group raised prices on average 2.426% which was the maximum the USPS could take, based on the CPI. This increased cost was not applied evenly across all services, however. For example, the increased the cost of a one ounce first-class letter from $.44 to $.45 was a 2.27% increase. The price for each additional ounce for letters did not increase, however. This means the percentage increase for items above 1 ounce is even less than a one ounce item. For example a letter over 3 ounces changed from $1.04 to $1.05- a tiny .96% increasePostcards increased from .29 to .32- a 10.3% increase.Letters to Canada and Mexico are up 6.25%, letters to other countries are up 7.1%
  • Shipping services also went up. Shipping services are part of the competitive products group, and the general price increase was 4.6% for the entire set of services. As we saw with Mailing Services, the price changes are varied. Priority Mail prices increased by 3.1% on average, Express Mail by 3.4%. Interestingly, Express Mail Commercial Base prices decreased on average 5.0 percent, so those of you paying for you postage with a postage meter, online postage or an approved shipping system should have noticed a decrease in your Express Mail spend!In addition, the USPS introduced a number of new products to attract more business.The January changes saw the addition of a Priority Mail Regional Rate Box C, which allows mailers to send items up to 25 pounds at a very reasonable cost. If you are not familiar with Regional Rate Boxes there are now three available: Regional ‘A’ which goes up to 15 pounds, Regional ‘B’ which goes up to 20 pounds and the new Regional ‘C’ which goes up to 25 pounds. Regional boxes provide an attractive alternative for shipping heavier items, which are too large for flat rate boxes.There is also new flat rate box pricing for Express Mail. There are 4 different sizes, for the same price. The new Express Mail flat rate boxes are the same sizes as Priority Mail medium flat rate boxes. If you are sending Express items across the country, The $39.95 price could be a great option for you!
  • A really great change for mailers doing commercial, or discounted, first class mailings is the ability to send up to 2 ounces of letter size material at the one ounce price! This means one of two things: If you have multiple page statements going to your clients you may have noticed a decrease in your postage spend.Even better, you can now add material to your statement mailing to promote new services and products with-out paying any additional postage. We’ll talk a little more about using the ‘free’ 2nd ounce for trans-promotional marketing purposes a little later in our call today.
  • ‘Free’ additional ounces isn’t just limited to discounted letters, either.Retail, that is single piece, first class mail has the same low price for parcels up to 3 ounces. That means you can send a 3 ounce package coast to coast in 3-4 days for $1.95. A real deal for lightweight merchandise!TRANSITIONIn addition, the postal service launched a new class of service: Commercial First-Class Package Service™.This service is part of the ‘competitive products’ category, and is intended for higher volume shippers of lightweight material. There are two ‘sub-classes: Commercial Base, and Commercial Plus each of which has different rules regarding preparation, content and weight.Commercial Base: has a13 ounce max weight and can containNon-personal content only- in other words merchandise. As such the parcel is OPEN to USPS™ inspection!Postage must be paid using PC Postage, an IBI meter, or a permit imprint and you must have At least 500 Presorted parcels per mailingCommercial Plus: on the other hand will allow you to mail Up to 15.999 ounces- for one price. This essentially provides a ‘sweet spot’ for shippers of item over 13 ounces, but under a poundYou can also ship both Personal and non-personal items- and your parcel is Closed to USPS inspection!Postage must be paid though permit imprint and you have to haveAt least 500 Presorted parcels per mailing or you can have non- presorted single-piece mailings if you have at least 200 pieces or 50 lbs per mailing. Commercial + also Requires a customer commitment agreement with USPS® to mail more than 5,000 Commercial First-Class Package Service machinable parcels in a calendar year.
  • The USPS have also introduced some new programs, and are phasing out a significant program….
  • The Postal Service has announced the retirement of the POSTNET barcode for automation price eligibility, effective January 28 next year.. TRANSITIONTo continue to be eligible for automation prices, mailings of postcards, letter, and flat-size mailpieces will need to have an Intelligent Mail barcode (IMb). In addition, Permit Reply Mail and Qualified Business Reply Mail (QBRM) will be required to have an Intelligent Mail barcode.Many of you on today’s webinar use POSTNET barcodes. By starting the transition to the Intelligent Mail barcode soon, you will continue to benefit from automation prices.In addition, you will be prepared to participate in the Intelligent Mail Full-Service option should that be approved as the standard for automation discounting in 2014. The Full-Service option will provide you with the lowest automation discount prices, free address correction for Full-Service mailpieces, visibility and tracking of your mailing- and more.We’ll discuss IMb in a little more detail later on this call. 
  • The USPS is bringing back the ‘Summer Sale’ program this year to encourage mailers to integrate their web marketing and direct mail marketing initiatives.Mobile marketing has become an pretty essential component of the overall direct marketing experience as more consumers have purchased smartphones and tablets such as i-pads. As the technology has evolved, run-of-the-mill mobile marketing practices such as push notifications have given way to more sophisticated practices such as quick response, or QR, codes.With the ‘Summer Sale’ program you can receive an additional 2% off the postage for letters, flats and cards which qualify for automation and presort Standard Mail and Commercial First Class pricing by adding a technology that can be read or scanned by a mobile device. In addition to QR codes, mailer can also qualify by using other smart device readable technologies such as Microsoft Tags, Snap Tags, digital watermarks and image recognition.It is also a requirement that the QR code, or other code, lead the recipients to either a mobile-optimized Web page where they can purchase an advertised product or service from a mobile device, or to a mobile optimized and personalized Web page (or PURL) tailored to the individual. The program runs from July 2012 through August 2012. Registration opened May 1 for participants and will continue through Aug. 30. Mail service providers who wish to enroll their customers can register in late June. Details are available at: usps.com/mobilebarcodepromotion.
  • Picture Permit Imprint Indicia is a new offering that allows business mailers using a Full Service Intelligent Mail Barcode the opportunity to creatively add value to their mail-pieces. You can customize your permit indicia by incorporating a color logo, picture, or other image along with the required permit information. This could really help improve the effectiveness of your mailing!Currently, this offering is available for presort First-Class Mail and Standard Mail letters and cards. The extra fee for Picture Permit First-Class Mail letters and cards is 1 cent per piece and for Standard Mail letters and cards, the fee is 2 cents per piece.The USPS will require you to submit an application, get design approval, and submit a sample in advance. Information on this program can be found on USPS.com in the business section under “picture permit”
  • Now let’s look at some changes impacting mail delivery, facility closures and service scheduling…..
  • One of the cost management strategies being discussed by the USPS is elimination of Saturday delivery. Should this plan go into effect, it is not going to be as disruptive as it might seem at first.The Postal Service would deliver mail to homes and offices Monday through Friday only. They would eliminate Saturday delivery of mail except Express Mail, but Post Offices would remain open. All other products and services will be available to customers doing business at a Post Office on Saturday.Mail Delivery will continue to Post Office boxes Monday–Saturday. For those of you which have remittance mail that is PO Box addressed there will be continued availability 7 days a week.Any Mail accepted at Post Offices on a Saturday will be processed on Monday, except Express Mail. The USPS will continue Saturday and Sunday acceptance of bulk mail and entry of drop shipments at facilities which are currently open.There will be no scheduled ‘blue box’ collections Saturday/Sunday, except for marked Express Mail collection boxesAnd the USPS will continue to transport outgoing, in-transit mail during weekends between plants and network distribution centers.
  • Last month the U.S. Postal Service announced its decision to halt the closing of more than 3,700 post offices. This includes about 600 urban and suburban postal branch offices and satellite stations that had been part of the original study for closure.The plan will keep the existing Post Offices in place, but with modified retail window hours to match customer use. Rural post offices will be kept open, with lobby hours reduced to 2-6 hours per day. Access to the retail lobby and to PO Boxes will remain unchanged, and a town’s ZIP Code and community identity will be retained.  The Postal Service will provide an opportunity for the Postal Regulatory Commission (PRC) to review this plan prior to actually making any changes. The new strategy will then be implemented over a two-year, multi-phased approach and would not be completed until September 2014. The Postal Service intends to file a request for an advisory opinion on the plan with the PRC later this month. Community meetings will then be conducted to review options in greater detail. Communities will be notified by mail of the date, time and location of these meetings, if you’d like to become involved.  
  • A hot topic these days is the reduction in processing facilities the postal service are making. The USPS is looking to make these closures in order to reduce their operating costs and consolidate operations. Presently they have more production capacity than the volume of mail warrants. On May 15 the first 48 facilities, in a series of closures, were identified. The closures going forward are going to be staggered: • The first 48 plants will be closed by the beginning of September. • There will be no closures from September through December, during the election and holiday seasons. • Then closures will resume with 92 closures slated to occur in early 2013. • and an additional 89 closures during 2014. In all, the cuts will leave the Postal Service with 232 processing plants, which is about half of its current network of 461 plants.If you want to see an up-to-date list of those facilities currently slated for closure, and those locations targeted for closure you can go to the USPS.com site under ‘news’. The site will also provide information letting you know which remaining facilities will be assuming the processing work of the closed locations.In response to mailers’ concerns about potentials for loading dock shortages and longer waiting times at mail entry locations, the Postal Service will expand appointment windows at facilities and modify volume restrictions.  Further, the Postal Service plans to retain all current business mail entry units (BMEUs) for the time being.  Should the Postal Service decide to relocate or consolidate any BMEU operations, it intends to notify mailers 120 days beforehand, and it will relocate or consolidate the units to nearby locations that minimize impacts on mailers. 
  • The Postal Service is also adopting new rules for market-dominant service standards.The most significant revisions would eliminate overnight service for First-Class Mail and Periodicals, and would instead provide two and three day delivery service.  The intent of these changes is to capture the significant cost savings associated with the previously mentioned consolidation of the Postal Service’s mail processing and transportation networks. They will begin by instituting an interim version will apply from July 1, 2012- January 31, 2014. Then a final version will go into effect February 1, 2014.  The USPS has said they are preserving overnight delivery for First-Class Mail through the end of 2013, although they are collapsing the distance that they can provide overnight service. They point out approximately 80 percent of First-Class Mail will still be delivered overnight.Clearly, this service level change could have an impact on your accounts payable or accounts receivables. We'll look at some strategies to mitigate those changes later in this seminar. These new rules, by the way, do not revise the service standards for Standard Mail and Package Services pieces mailed within the contiguous forty-eight states. 
  • OK, so we’ve seen a number of changes which are occurring with the USPS. Let’s now look at some strategies to get the best service at the lowest cost for your business or organization.
  • By considering the USPS options available to you for sending out a given mailing, you can potentially reduce your postage spend, and in some cases improve your delivery time.An option to reduce postage spend would be to change class of mail, e.g., First-Class Mail to Standard Mail for qualifying, non-personal mailings. TRANSITIONStandard mailings require that your mailing have 200 pieces or 50# in the same processing category You must also have a permit from the postal service and perform some sorting and preparation in order to qualify for the extraordinarily attractive pricing. Mailers can maximize the value of their mail-piece by adding additional communications, incentives, advertisement etc. because the price of a Standard Mail piece is the same up to and including 3.3 oz. A non-profit mailer, for example, can send a 3.3 ounce letter size item (which would cost $1.05 as a single piece first class item) for as low as 8.7 centsStandard mail items can weigh no more than 15.999 ounces. If you are sending heavier items, you might want to consider the various package service options the USPS offer. TRANSITIONThe prices are lower than Priority mail- in some cases substantially so.For example, if you were sending out a 5 # parcel containing books you could send it Priority mail for between $6.91- $17.88 depending on the destination. That same parcel would qualify to be mailed using ‘Media Mail’ pricing anywhere in the US for $4.15If those same items were being mailed either to or from a school, library, museum, or nonprofit or other qualifying organization you would qualify to mail the box using ‘Library’ rates anywhere in the US for $3.95.
  • If you utilize extra services in your business there are real opportunities to control your spend. The key tactic is to recognize what the various extra services do, and choose based on your objective.USPS Extra services do 3 basic things:Provide proof you mailed an itemProvide evidence or proof an item was delivered, with some options to get a signature or restrict delivery to a particular individualandProvide you with various levels of protection for your item while in transitYou should first ask: What do we want to accomplish by selecting an extra service?
  • If you answered the question: “We want evidence of delivery, a signature would be nice, but we don’t need to prove we mailed the item” you might select either Delivery Confirmation or Signature ConfirmationDelivery Confirmation would give you evidence of delivery for you item. You can see the delivery information online by going to the USPS.com ‘Track and Confirm’ site, or use the tracking function on Pitney Bowes My Account.Signature confirmation would give you proof of delivery with a signature. The signature can be obtained online and downloaded as part of a PDF document which also gives you the delivery time, date and address.Del Con and Sig Con Are used for parcels (not Letters or flats). If you process a Sig Con or Del Con item through your mailing system you can qualify for discounted ‘electronic’ pricing. In fact electronic delivery confirmation can be added to First Class parcels, Priority Mail, First Class Package Service and Parcel Select items at no additional cost- That’s right: Free Electronic Sig Con is also a great deal: only $2.10 for First Class parcels, Priority Mail, First Class Package Service and Parcel Select
  • If you answered that question: We want proof we mailed the item and proof of delivery with a signature, you’d probably choose the familiar Certified mail with a return receipt.Even extra services which have been around as long as Certified and return receipt have electronic options available, which can simplify the process of mailing and tracking, and give you a lower price.Similar to SigCon, ERR allows you to obtain the signature and delivery information online and downloaded it as part of a PDF document showing the delivery time, date and address. The pdf can be printed on 8 ½ x 11 paper which makes filing simpler than traditional green card return receipt. If you want to eliminate hard copy filing entirely, you can simply save the pdf to your computer for later access.The best part is an ERR is $1.15 opposed to the traditional ‘green card’ return receipt which is priced at $2.35
  • Since the postal service implemented ‘shape based rating’ in 2007 the size, shape and mailing characteristics of a mail-piece have a significant impact on the amount of postage you pay in order to mail an item. For any given weight, there are different prices for cards, letters, flats or parcels.A great strategy to reduce postage costs than, is to find ways to send items out at a lower shape based price.With-in First-Class Mail only, there is a price category for postcards. The Max. dimensions of POSTCARDS is 4 ¼ x 6 with a max thickness of .009”. Weight is not a consideration, as there is only one price.A one ounce single piece, or Retail, First Class letter is .45. If it were feasible to convert the contents to a post card the price would be loweredto .32, a 19% reduction on postage cost.Aside from the postage price benefits of converting to a post card, there are other major advantages:There are no “openability” issues. The offer is right there in front of the reciepient! Even the letter carrier can see your offer!Cards can be act as “coupons” which clients can redeem at your place of business.Lower material costs since there is no envelope, and no additional work to fold or insert contents.Cards also give you the ability to more readily leverage QR codes - to lead recipients to your website! The code can sit right next to the offer, and makes an ‘impulse snap’ of the QR more likely.With Standard Mail® card formated items, even if they are “postcard” size, are rated as letters or even flats depending on the size. That is why many direct mailers send those oversized cards out- the letter-size postage is the same price up to a whopping 6 1/8 x 11 ½. Those standard mail items then have the reduced material costs, improved openability issues and other advantages discussed previously.
  • Converting light-weight flats to letter-size can reduce postage approx. 40%!The max. dimensions of a letter are: 6 1/8 H x 11 ½ L x ¼” thickKeep in mind, letters can weigh no more than 3.5oz for single piece or for Automation, that is barcoded, ratesNon-barcoded Presorted Machinable letters can weigh no more than 3.3 oz.When considering the redesign of items you are currently mailing as a flat, you have a number of strategies you can consider:Duplex pages if you are now only printing on one side. This is a great strategy if you need to reduce the thickness of the item, or reduce the weight.(paper cannot be too thin – so print shows through one side to the other)You could print on lighter weight paper – You might want to consider 20# material if you are using 24#, or even look at 18# material(only printing on one side of the page) This too is a possible approach if you need to reduce the thickness or weight of your mail piece.You could also narrow page margins. This could reduce the total number of pages in the mail piece, again reducing the weight and thickness.Using Smaller fonts also has the effect of reducing the page count by fitting more content on each page.Half or tri-fold contents so the material can fit in an envelope which meets letter size standards, such as a #10, #11 or 6 x 9. You want to keep in mind, however the thickness of letters may not exceed ¼”.
  • The postage savings can really add up, when changing your items from a flat to a letter sized item.In this set of examples we compared the difference in cost for a 1000 piece mailing sent at commercial first class automation rates. Because the 2nd ounce is free with commercial first class letters, the savings really jump for items between one-two ounces. Even single piece retail first class items will show significant savings when converted from a flat to a letter- .45 less for items up to 3 ounces and .25 for items 3-3.5 ounces. For example a 3 ounce flat would be priced $1.95, but a 3 ounce letter only .85.
  • Redesigning parcels to flats can also save mailers a significant amount of money.Most often, a mailpiece is considered a parcel because it is not flexible or uniform in thickness. Simply removing the contents/documents from a ring-binder and using a perfect-bind/glue type of solution can often reclassify a piece to “flat-size”. TRANSITIONFor example, if you were sending our materials in a ring binder it would be classified as a parcel regardless of thickness due to the fact it is rigid.Changing the binding to a flexible cover and a soft binding, such as spiral or tape could make your piece flexible enough to meet USPS standards. Choosing an envelope sized for the content would also ensure you meet postal service requirements- for example choose a 9 x 12 envelope for bound 8 ½ x 11 material.
  • Besides changing the characteristics of your mail to take advantage of the best shape based processing category, there are some other tactics you can employ to reduce your postage spent and improve your delivery time.Generating USPS ‘Automation Compatible’ mail is a savvy way to do that.Running you mailing lists through a software program such as Pitney BowesSmartMailer will make taking advantage of not only correct addressing errors and provide move updates but alsoPre-sort the mail for you based on current USPS requirementsGenerate a correct DPBC or IMbGenerate all the reports required by the USPSPrint all the required tray labelsSave you significant prep timeWith software it’s typically easier and faster to prepare super low cost automation mailings for deposit with the USPS than non-automation pre-sort mailings. Additionally, automation mailings can, and do travel through the USPS system more expeditiously than non-automation mailings.In short: Easier prep, Lower price, Better delivery
  • As we reviewed earlier Presorted & Automation First-Class Mail letters have the new ‘2nd ounce free’ pricing. Besides being able to send your higher page count statement to your clients at a lower cost, you can really benefit by adding advertising material to any statements you have going out. Think of it this way- If your typical statement weighs ½ ounce, you’ve got 1 ½ ounces of capacity just waiting for use!One of the biggest challenges of marketing is getting recipients to open a direct mail piece. So what better way to capture people’s attention than by inserting a marketing message into a piece that many people are too afraid to NOT open? Increasingly, marketers are realizing that all that white space on their invoices, and the additional weight opportunity, offers cross-selling and up-selling opportunities without threatening to increase delivery costs. Research complied by marketing experts and business consultants shows that 95% of customers open their monthly statements at least once, and that the average consumer spends up to 3 minutes reading his or her bill. And research indicates the rate of return on personalized communication is usually 3 to 5 times that of generic direct mail campaigns.Adding one or more inserts will only cost you the printing, and can have a significant impact on your sales and marketing.
  • Besides utilize the Intelligent Mail® barcode to get the best postage pricing, the Full Service version of IMb tells mailers when and if mail has been delivered.This information offers you the opportunity to improve both mailing operations and the effectiveness of each mailing. Not only that, but the Imb can also be used with reply mail to track inbound mail, such as payments from clients.With delivery intelligence, you can:• Coordinate other activities related to the mail piece, whether it is a related marketing offer or a collection call reinforcing the message of a mailed collection notice• Plan and time mailings more effectively• Anticipate and allocate resources for response more effectively• Respond to customer inquiries regarding a mail piece• Reschedule actions based on a mail delivery date – e.g. power disconnects, policy cancellation, etc.• Provide a proof of mailing
  • With the announced reductions in processing centers and the increase in delivery times for First Class Mail and Periodicals your organization will want look at options to maintain the delivery standards of your AR/AP mailings.Responding to various USPS timeline & logistics changes will require you to consider if any of the changes will impact you, and what you will want to alter if your mail delivery will be slowed. Some prudent suggestions would be to: Talk to yourComptroller, CFO, CEO and discuss the impact of the USPS changes on your Days of Sales Outstanding and cash to cash cycle.Consider what changes you can make to mitigate the longer delivery times. For example: You may want to consider mailing a day earlier than normal.Understand the TOTAL costs to adjust your logistics/timing . Will you need additional staff? Will it require your IT staff change your billing cycles?Ensure all outbound addresses are as accurate as possible so as little mail as possible needs to be redirected. We’ll discuss move updates strategies in a few minutes.You should also look to leverage courtesy reply mail. You are assured your payments are correctly addressed and bar-coded, speeding their delivery to you through the post office system. In addition, studies show clients return payments more quickly if there is a reply mail envelope included with the invoice or other mailing envelopes.
  • There are 2 critical aspects to the address you print on your outgoing mail:The physical portion- that is the street addressAnd the individual you are mailing to.Employing a strategy to make certain the address you are printing on the item is correct, and ensuring the recipient is still at that location can both reduce your mailing costs and improve your mail-piece delivery.TRANSITIONFor those of you doing presort mailings, it’s actually a requirement that you make certain the address information on your item is correct. It costs the USPS a lot of money to redirect mail, so they want to make certain you are giving them accurate delivery information.Let’s start by looking at getting the correct physical address.For non-automation mailings, that is non-barcoded mailings, a certified process* must be used within 12 months before mailing to ensure accuracy of 5-digit ZIP® Codes.For automation-price mailings, addresses must be matched using a CASS™ certified process within 180 days before mailing; or 90 days if you are sorting to a carrier route level. The CASS™ system certifies that address-matching software accurately assigns the correct delivery point codes that appear on mailpieces- kind of like a ‘spell checker’ for addresses. Pitney Bowes addressing solutions are CASS™-certified! The software also takes all that information and is able to generate a USPS approved barcode.
  • The other portion of address quality is verifying the recipient is actually at the address you are mail to.Postal Service Move Update solutions provide ways for mailers to reduce the number of mail-pieces that require forwarding or return by the USPS.Move Updates are required for mail-pieces claiming First-Class Mail® commercial or Standard Mail prices and the USPS has rules regarding the minimum frequency of using a move update method if you want to send mail out using First-Class Mail® commercial or Standard Mail pricesEven mailers NOT sending items out at First-Class Mail® commercial or Standard Mail prices should consider utilizing a move update strategy.The Postal Service offers four preapproved methods:1. Ancillary service endorsements2. Address Change Service (ACS™),3. FASTforward®4. National Change of Address Linkage System (NCOALink®)Ancillary Service Endorsements are printed on the envelope and tell the USPS what to do, if a recipient has moved. The illustrated ‘Electronic Service requested is and example. You’ve probably seen mail with other endorsements, such as Return Service Requested or Address Correction Requested. There are different rules and costs based on the particular endorsement you select, the class of mail you are using and the length of time since the recipient has moved.• There are real Benefits to Ancillary endorsements they enableyou to obtain the addressee’s new (forwarding) address, if the addressee filed a change-of-address order, or the reason for non-delivery.• But there are some drawbacks –ASEs are a “reactive” option, meaning the mailpiece is addressed and entered into the mailstream with an inaccurate address. As such potential drawbacks might include:o Re-mailing and/or recreation of mailpiece may be necessaryo Delivery may be delayed, negatively impacting response time or cash flowo Use of the “wrong” endorsement could be very costly! For instance, if “Address Service Requested” was used on a Standard Mail® mailpiece, and the addressee moved 13 months ago, the mailpiece would be returned with the new address attached and a weighted fee would be charged. The weighted fee equals single piece First-Class Mail® or Priority Mail® price multiplied by 2.472.Address Change Service- or ACS allows you to put a ‘code line’ on the face of your mailpiece, and electronically receive move updates, at a reduced cost. In fact, with the IMb ACS will be built into the barcode and you will receive move updates at either no cost or a significantly reduced cost.• Benefits - you can use electronically generated address correction information to update your mailing lists more easily and in a timelier manner than via the manual process, and do so more cost-effectively.as a “reactive” option, drawbacks are similar to Ancillary Endorsements, i.e., the potential need to re-mail and/or recreate the mailpiece, delayed delivery negatively impacting response time or cash flow.FASTforward® System is typically used by mail houses or other mail consolidators such as PB Pre-Sort Services to update moves before the mail is deposited with the USPS. Their equipment scans the address printed on the mail-piece, and send the address information to the USPS for updating. If the client moved, the new address and barcode are added to the mail-piece. Benefits: While this option is “reactive” in that the mailpiece is created, addressed and metered before being processed by a presort company, that “wrong” address is often caught and corrected by FASTforward®, before entering into the USPS mailstream.DrawbacksFast Forward Contains 18 months of COA history. Therefore, if a particular recipient moved longer than 18 months ago, that new address would not be recognized, potentially delaying delivery.Industry regulations may not allow “automatic” correcting of an addressTypically you won’t receive notifications of the new addresses. Over the course of time, your database could eventually deteriorate. This might also have negative ramifications on mailings not processed through FASTforward®.National Change of Address Linkage System allows you to correct addresses in your office prior to sending the mailing out. • NCOALink® product is an efficient pre-mailing method leveraging the most current USPS address information, including standardized and delivery point coded addresses, for matches made to the NCOALink® file for individual, family, and business moves. VeriMove Net™solution is the Pitney Bowes NCOALink® solution and provides 48-months of COA history! This is a particularly useful approach if your client base if constantly moving. Typically the younger your client base, the more often they move. As a proactive solution, benefits include addresses are corrected before mailpieces are addressed and entered into the mailstream, maximizing the opportunity for a fast delivery of revenue-collection and revenue-generating mailpieces. This can often prevent the need to regenerate and/or re-mail mailpieces. Also, the investment can be substantially less, especially comparing the super-low cost per correction against the overall costs associated with reactive (post-mailing) solutions. Most savvy mailers only want to submit the most accurate and concise mailpieces to the USPS. Mailers wouldn't want to give the USPS pieces that may be delayed or not delivered. Nor would they have wanted to waste the investment in creating, printing, folding, inserting and posting because of inaccurate addresses. Waiting for address correction notices from the USPS could negatively affect turnaround time for subsequent mailings!
  • You will also want to leverage various online tools to assist you. The USPS Postal Explorer® site is a valuable resource.In addition to accessing information from the Domestic and International Mail Manuals, you can download the complete USPS price list, proposed Price Change files, you can read recent Federal Register notices, including the USPS filing of their proposed changes to Mailing Services. Most of the material we discussed in today’s seminar can be accessed from ‘Postal Explorer’.You can also download any proposed pricing files when the USPS announces pricing changes. At PB, we have our own web pages dedicated to postal information and updates. And we have our Customer Communications newsletter – which is complimentary. If you don’t already receive it, consider signing up for it via the link noted here. The e-newsletter comes out intermittently, usually every 4 – 6 weeks or so. And if full of information including articles regarding proposed and finalized USPS rate and regulatory changes!In addition we have an easy to use postal reference site “Postal Advisor’ which is located on ‘My Account’. Postal Advisor will allow you to get accurate information regarding postal rules and appropriate service use. This can help you to make correct decisions regarding rates and services improving productivity, and reducing postage costs.The site has handy downloadable reference charts as well!
  • In summary: by being aware of various changes occurring with the USPS you can take action to mitigate those changes which will impact your postal budgets or delivery time frames, and leverage those changes which help improve your mail-piece delivery or provide you with cost saving options.Leverage technology to gain the most efficiency and cost effectiveness for your organization. Make use of your vendor relationships to explore creative solutions to your particular mailing needs. Your Pitney Bowes sales team have the knowledge and resources to help you get the most out of your mailing operations.
  • That concludes our presentation today. We’d like to open this up for any questions that you may have. Ernest, what questions do we have?
  • Understanding USPS® Service Changes & How They Impact Your Business

    1. 1. Understanding USPSService Changes & HowThey Impact YourBusinessA Practical Guidefrom Pitney Bowes Understanding USPS Service Changes June 15, 2012 1 & How They Impact Your Business
    2. 2. Your presenter Dana Wagner, Manager of Customer Education, began his Pitney Bowes career in Seattle in 1982 and held increasingly responsible sales and management positions in the US marketing organization. For the past 7 years he has been a part of the Corporate Learning and Development organization. Dana is currently responsible for the award winning Mail Management Seminar series and other client centered carrier and product education programs. Understanding USPS Service Changes June 15, 2012 2 & How They Impact Your Business
    3. 3. On the minds of every business that relies on mail as part of itsoperations:  What are the U.S. Postal Service changes?  What does it mean for me?  How do I plan for the changes? Understanding USPS Service Changes June 15, 2012 3 & How They Impact Your Business
    4. 4. USPS Changes• Pricing Changes• Program Changes• Service Level Changes Understanding USPS Service Changes June 15, 2012 4 & How They Impact Your Business
    5. 5. USPS Pricing Changes Understanding USPS Service Changes June 15, 2012 5 & How They Impact Your Business
    6. 6. Market-dominant products: Competitive products First-Class Mail®,  Priority Mail® Periodicals,  Express Mail® Standard Mail®,  First-Class Package Service™ Single-piece Parcel Post®,  Parcel Select®, Media Mail®,  Lightweight Parcel Select® Bound Printed Matter,  International services Library Mail,  Global Express Guaranteed® First-Class Mail® International  Express Mail International® most Extra Services  Priority Mail International®  International Priority Airmail™  International  Surface Air Lift®  Airmail M-bags Understanding USPS Service Changes June 15, 2012 6 & How They Impact Your Business
    7. 7. Effective as of January 22, 2012Highlights: Change: First-Class Mail® Letters (1 oz.) +1 ¢ (44¢ to 45¢) Letters additional ounces unchanged (20¢) Postcards +3 ¢ Letters to Canada or Mexico (1 oz.) +5 ¢ Letters to other int‟l destinations (1 oz.) +7 ¢ Understanding USPS Service Changes June 15, 2012 7 & How They Impact Your Business
    8. 8. Price change for all Shipping Services- + 4.6%Priority Mail- avg + 3.1%:  Updated domestic pricing for Priority Mail®  New Regional Rate Box CExpress Mail- avg + 3.4%:  Lower Express Mail retail prices for ½ lb. and 1 lb. packages to local and close destinations  Lower Express Commercial Base prices: 5% on average  New Flat Rate Box Understanding USPS Service Changes June 15, 2012 8 & How They Impact Your Business
    9. 9. Postal Changes2nd ounce “free” presorted & automation First-Class Mail® lettersGood news! Most commonly used for business invoicing & direct mail Opportunities to advertise new services and products to their customers as part of bill and statement mailings. Understanding USPS Service Changes June 15, 2012 9 & How They Impact Your Business
    10. 10. Postal ChangesFirst-Class Parcels Retail First-Class Mail® Same Price for the first 3 ounces!New Class: Commercial First-Class Package Service™ Higher volume lightweight package shippersCommercial Base:•13 ounce max weight•Non-personal content only- OPEN to USPS™ inspection!•Postage paid using PC Postage, an IBI meter, or a permit imprint•At least 500 Presorted parcels per mailingCommercial Plus:•Up to 15.999 ounces- „sweet spot‟ over 13 ounces•Personal and non-personal items- Closed to USPS inspection!•Postage paid though permit imprint advance deposit account•At least 500 Presorted parcels per mailing or single-piece mailings need at least 200 pieces or 50 lbsper mailing.•Requires a customer commitment agreement with USPS® to mail more than 5,000 Commercial First-Class Package Service machinable parcels in a calendar year. Understanding USPS Service Changes June 15, 2012 10 & How They Impact Your Business
    11. 11. USPS Program Changes Understanding USPS Service Changes June 15, 2012 11 & How They Impact Your Business
    12. 12. Postal Changes ™ IMb required for automation discountsJanuary 28, 2013 ® Intelligent Mail barcode (IMb™) required for automation letters and flats, Permit Reply Mail and Qualified Business Reply Mail (QBRM) price eligibility Each mail piece must have an IMb™January, 2014- proposed ® Full Service Intelligent Mail compliance Unique IMb™ for mailpieces and handling units Electronic submission of postal documentation Electronic scheduling of drop shipments Understanding USPS Service Changes June 15, 2012 12 & How They Impact Your Business
    13. 13. USPS Summer Sale Program Period: July 1 through August 31, 2012 Discount Amount: 2% of eligible postage. IMb Requirements: Mailings of automation letters or flats must have Intelligent Mail® barcodes. Eligible Mail:  Standard Mail® letters and flats  Nonprofit Standard Mail letters and flats  First-Class Mail® presort and automation letters, cards and flats Additional Eligibility:  The mobile barcode or similar print technology must take a consumer to a mobile optimized site that either enables mobile commerce or is personalized for the recipient. usps.com/mobilebarcodepromotion Understanding USPS Service Changes June 15, 2012 13 & How They Impact Your Business
    14. 14. Picture Permit Imprint Indicia The permit imprint standards allows mailers to include a color image of a business-related design, such as corporate logos or trademarks, as part of the indicia on a Full-Service Intelligent Mail Barcode mailing. USPS is now requesting:  1 cent per piece add-on for First Class Mail  2 cents per piece add-on for Standard Mail. Mailers interested in utilizing the picture permit imprint indicia should go to: https://www.usps.com/business/picture-permit.htm Understanding USPS Service Changes June 15, 2012 14 & How They Impact Your Business
    15. 15. USPS Service Level Changes Understanding USPS Service Changes June 15, 2012 15 & How They Impact Your Business
    16. 16. Postal ChangesNo Saturday Delivery Five-day-a-week delivery (proposed) No delivery or picked up on Saturdays to homes or businesses No collection from blue boxes Understanding USPS Service Changes June 15, 2012 16 & How They Impact Your Business
    17. 17. Postal ChangesPost Office closures and service reductions Postal Service backed off closure of post offices nationwide May 9 USPS announced that it will allow rural post offices to remain open, but with reduced hours. Trim operations at 13,000 post offices to between two and six hours per day Understanding USPS Service Changes June 15, 2012 17 & How They Impact Your Business
    18. 18. Postal Changes Central Facility Closures The United States Postal Service announced May 17 that it would begin consolidating 48 mail processing centers beginning in July 2012  Additional 92 processing centers to be consolidated in February 2013  89 more consolidated in early 2014. Area Mail Processing (AMP) on USPS.gov site http://about.usps.com/news/service- alerts/facility-closures.htm  Facilities targeted for closure  Where mail processed at these facilities will be routed. Understanding USPS Service Changes June 15, 2012 18 & How They Impact Your Business
    19. 19. Postal ChangesTimelines & LogisticsLargest impact = mail may take longer for mail to be deliveredEveryday users of First-Class Mail®Critical delivery deadlinesCash-flow (sending out invoices)  + 2 – 4 days?  impact on A/P  impact on A/R  scheduling of staffingLogistics of plant and facility closures  Drive mail to another local entry area  Increased fuel costs, staffing costs, vehicle usage, timing Understanding USPS Service Changes June 15, 2012 19 & How They Impact Your Business
    20. 20. Understanding USPS Service Changes June 15, 2012 20& How They Impact Your Business
    21. 21. •Choosing the best class of service•Choosing the right Extra Service•Redesigning mail-pieces•Leveraging automation pricing•Improving address quality Understanding USPS Service Changes June 15, 2012 21 & How They Impact Your Business
    22. 22. Postal ChangesBest PracticesSelect the Right Class of MailHelp reduce postage expenditures: Non-personal mail pieces -> consider Standard Mail®  Postage lower than First-Class Mail®  Nonprofit prices ~ 40% less than regular Standard Mail®  Destination Entry Discounts  Postage “same” for like-shape pieces < 3.3 oz. For heavier non-personal parcels, consider Package Services  Postage lower than Priority Mail®  Media Mail®, Library Mail, Bound Printed Matter and Parcel Post® Understanding USPS Service Changes June 15, 2012 22 & How They Impact Your Business
    23. 23. Postal ChangesBest PracticesLeverage Extra Services Choose based on service objectives  Proof of Mailing?  Proof of Delivery? • Signature? • Restrict Delivery?  Protection in transit? Understanding USPS Service Changes June 15, 2012 23 & How They Impact Your Business
    24. 24. Postal ChangesBest PracticesLeverage Extra Services Choose based on service objectives  Proof of Mailing?  Proof of Delivery • Signature? • Restrict Delivery?  Protection in transit? Lower costs for e-services  Delivery Confirmation and Signature Confirmation Service • Often used with First Class mail parcels and priority mail • Mailer doesn‟t need to go to the post office – saving time, processing, and money Understanding USPS Service Changes June 15, 2012 24 & How They Impact Your Business
    25. 25. Postal ChangesBest PracticesLeverage Extra Services Choose based on service objectives  Proof of Mailing  Proof of Delivery • Signature • Restrict Delivery?  Protection in transit? Lower costs for e-services  Utilize Electronically Filed Certified Mail and Electronic Return Receipt • Signature files are electronic • Easier to manage • Significant process improvement • ERR less than half the cost of ‘Green Card’ RR Understanding USPS Service Changes June 15, 2012 25 & How They Impact Your Business
    26. 26. Postal ChangesBest PracticesRedesign - Envelopes to Cards Targets First-Class Mail® price increase Redesigning envelope contents into card formatBenefits:  No “openability” issue  Cards can be “coupons”  Lower material costs  First-Class Mail® post card price is generally lower than Standard Mail letter price  Ability to leverage QR code - to lead recipients to website! Understanding USPS Service Changes June 15, 2012 26 & How They Impact Your Business
    27. 27. Postal ChangesBest PracticesRedesign – Flats to Letter-sizeMay reduce postage up to 40%!Tips to redesign: Duplex pages Use lighter weight paper Narrow page margins Smaller fonts Half or tri-fold contents Understanding USPS Service Changes June 15, 2012 27 & How They Impact Your Business
    28. 28. Postal Changes Best PracticesRedesign – Flats to Letter-size (continued) Quantity Potential Savings 1,000 1 oz. flats converted to letters up to $326* 1,000 2 oz. flats converted to letters up to $496 ** 1,000 3 oz. flats converted to letters up to $416 **** Mixed ADC price for 1-oz automation-price flats vs. Mixed AADC price of 1-oz automation-price letters** Mixed ADC price for 2-oz automation-price flats vs. Mixed AADC price of 2-oz automation-price letters - the substantial savings “2nd ounce free” for commercial First-Class Mail® letters*** Mixed ADC price for 3-oz automation-price flats to the Mixed AADC price of 3-oz automation-price letters Understanding USPS Service Changes June 15, 2012 28 & How They Impact Your Business
    29. 29. Postal ChangesBest PracticesRedesign – Parcels to FlatsMay save up to 30% on postage costs!Tips: flats must be rectangular uniform in thickness flexible commercial flats must also meet deflection criteria.Example:Documents sent out in “ring binder.”Rigid structure disqualifies it as being a flat. Replace binding or outer covering to a soft, flexible cover* to save . Get envelopes that are the right fit for content - helps meet uniform thickness requirements.Flexibility must meet U.S. Postal Service standards Understanding USPS Service Changes June 15, 2012 29 & How They Impact Your Business
    30. 30. Postal Changes Best PracticesAutomate for Cost-Efficient Processing Prepare as much automation-compatible mail as possible Apply delivery point routing barcodes – Use Intelligent Mail barcode Prepare and sort according to U.S. Postal Service regulationsBenefits:  Reduce postage expenditures  Cut processing steps and time  Maximizing prospects of timely delivery Understanding USPS Service Changes June 15, 2012 30 & How They Impact Your Business
    31. 31. Postal ChangesBest PracticesUse “2nd Ounce Free” forTrans-promotional marketingPresorted & Automation First-ClassMail® letters Most commonly used for business invoicing Opportunities to advertise new services and products to customers as part of bill and statement mailings Consider „piggy backing‟ with business partners! Understanding USPS Service Changes June 15, 2012 31 & How They Impact Your Business
    32. 32. Postal ChangesBest PracticesTrack for VisibilityKnowledge = EfficiencyTrack using Intelligent Mail barcode(IMb) Visibility sending out or receivingBenefits Plan for timely delivery Understand regional differences Meet timing objectives Anticipate response needs Map out cash flow Schedule staff Better customer service (anticipating payments) Understanding USPS Service Changes June 15, 2012 32 & How They Impact Your Business
    33. 33. Responding to timelines & logistics changes Talk to Comptroller, CFO, CEO Discuss impact on Days of Sales Outstanding and cash to cash cycle Understand TOTAL costs to adjust logistics/timing Ensure all outbound addresses are as accurate as possible Leverage courtesy reply mail envelopes (correctly addressed and bar-coded) Understanding USPS Service Changes June 15, 2012 33 & How They Impact Your Business
    34. 34. Front-end ProcessingUsing the correct address iscriticalTwo parts to address quality Physical portion of address  Individual, business or family componentSolutions:Physical portion of the address: CASS ™ certified software Standardizes physical portion of the address Assigns a delivery point routing barcode Understanding USPS Service Changes June 15, 2012 34 & How They Impact Your Business
    35. 35. Front-end ProcessingIndividual, business or familycomponentU.S. Postal Serviceapproved Move Updatesolutions:  Ancillary Endorsements  Address Change Service (ACS)  FASTforward® and U- Move systems  NCOALink® product Understanding USPS Service Changes June 15, 2012 35 & How They Impact Your Business
    36. 36. Postal Changes ResourcesCreate “shortcuts” in your browser forthese sites! USPS -  Postal Explorer®http://pe.usps.gov/default.asp  Federal Register Postal Explorer®  RIBBS –Customer Support Center https://ribbs.usps.gov/ Pitney Bowes-  Postal Informationhttp://www.pb.com/postal-information/  Pitney Bowes - Customer Connections  Postal Advisor on „My account‟ Understanding USPS Service Changes June 15, 2012 36 & How They Impact Your Business
    37. 37. Postal ChangesBest Practices Anticipate changes in your processes Leverage technology Seek efficiency and cost effectiveness Engage Pitney Bowes, in creative solutions and problem solving Understanding USPS Service Changes June 15, 2012 37 & How They Impact Your Business
    38. 38. What Does Pitney Bowes Do? Document Binding CASS Software with Solutions List Management Custom & Standard Address Printing Envelopes AutomationHigh Speed Color Printer Document Management Fold and Insert & Reformatting Mail Openers Mailing SolutionsLow Cost $0.02 per print Intelligent Inserting Software USPS FedEx UPS Eliminate manual Green Cards and Visitor Self Check-in Shredders Carrier Management save $1.20 postage Shipping Automation per piece!!! Consolidate all Inbound Package 6% - 12% Postal Discounts Permits & Earn Interest Service Agreements USPS Postal Kiosk Logging & Delivery On Printing Devices Understanding USPS Service Changes June 15, 2012 38 & How They Impact Your Business
    39. 39. Thank you! Questions?Please Contact us at 1-800-322-8000 Understanding USPS Service Changes June 15, 2012 39 & How They Impact Your Business
    40. 40. Every connection is a new opportunity™The Corporate logo, SendSuite, and Pitney Bowes are trademarks owned by Pitney Bowes Inc.Postal Service, USPS, First-Class Mail, First-Class, First-Class Package Service, Express Mail, Priority Mail, Parcel Select, DeliveryConfirmation, Global Express Guaranteed, Express Mail International, Priority Mail International, International Priority Airmail, andInternational Surface Air Lift are trademarks owned by the United States Postal Service. Understanding USPS Service Changes June 15, 2012 40 & How They Impact Your Business

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