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August 2021 USPS® Proposed Rate Increases
- What You Need To Know
Background and Experience
Speaker: Adam Lewenberg
• President of Postal Advocate Inc.
– The only mail audit and recovery firm in the US and Canada
– Manage a portfolio of 160,000 pieces of mailing equipment for the largest
US companies.
– Speak and teach nationally on mail savings and industry trends.
• Former Industry Co Chair- Boston Postal Customer Council and Mail Systems
Management Association. CMDSS and MDC Certifications.
• Featured Writer for Mailing Systems Technology Magazine.
• Worked for one of the largest mailing vendors for over 17 years
– Director of national sales for presort, tabletop inserters, addressing
hardware/software and green offerings.
– Was one of the top 5 account managers nationally working with some of
the nations top accounts.
June 23, 2021 2
What We’ll Cover:
• What rates are changing
• How this impacts you
• What you need to do
• Savings tips
• USPS Thoughts
June 23, 2021 3
New rates would take effect Sunday August 29, 2021
**Rates are not final, and we should know by 7/15/21
*We will focus on the most common rate structures. For more detail on other mail classes and
services go to USPS Postal Explorer at http://pe.usps.gov/PriceChange/Index
USPS® Volume Declines
June 23, 2021 4
Year
First Class®
Mail - Single
Piece % Change
First Class®
Mail Presort
%
Change
Marketing
Mail
%
Change
2020 15,172,441 -8.8% 36,246,494 -2.4% 64,180,125 -17.9%
2019 16,511,298 -5.7% 37,130,541 -1.9% 75,690,047 -2.1%
2018 17,460,477 -6.4% 37,833,487 -2.5% 77,305,661 -1.4%
2017 18,582,618 -6.0% 38,795,454 -3.0% 78,369,843 -3.3%
2016 19,705,721 -5.3% 39,943,145 -0.6% 80,929,933 1.0%
2015 20,741,368 -3.8% 40,174,244 0.0% 80,090,273 -0.4%
2014 21,524,319 -4.5% 40,193,317 -2.4% 80,374,260 -0.7%
2013 22,501,509 -6.3% 41,144,184 -3.4% 80,962,678 1.4%
2012 23,913,510 -8.9% 42,524,039 -4.6% 79,801,009 -6.1%
2011 26,035,071 -9.8% 44,494,498 -3.9% 84,691,971 2.6%
2010 28,584,912 -10.8% 46,225,386 -3.7% 82,524,693 -0.2%
2009 31,682,890 -11.6% 47,933,717 -8.3% 82,706,211 -19.8%
2008 35,355,570 -9.1% 51,935,871 3.8% 99,084,155 -4.5%
2007 38,565,956 49,978,441 0.2% 103,516,112 1.0%
2006 49,862,002 102,459,559
Data in Thousands
From USPS REVENUE, PIECES, AND WEIGHT BY CLASSES OF MAIL AND SPECIAL SERVICES Reporting
Letter volume
dropping fast!
Making up for
volume declines
with rate changes
Increased number
of drop off points
with fewer pieces
per stop.
Volumes seldom
go up after a
major correction.
First-Class Mail® Single Piece
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
1 $0.55 $0.58 5.5% $1.00 $1.16 16.0%
2 $0.75 $0.78 4.0% $1.20 $1.36 13.3%
3 $0.95 $0.98 3.2% $1.40 $1.56 11.4%
6 N/A N/A $2.00 $2.16 8.0%
13 N/A N/A $3.40 $3.56 4.7%
Post Card $0.36 $0.40 11.1%
Letters Flats
First-Class Mail® Retail • 5.5% Increase on 1 Oz Letters
• 1 Oz Flats increase from $1.00
to $1.16. That’s a 16%
increase!
• Post Cards increase by 11.1%
June 23, 2021 5
Upcoming USPS® Rate Change
June 23, 2021 6
• Metered mail (including PC Postage) will save $.05 per piece
over stamps purchased from the Post Office (9.4%)
Savings over First-Class Mail®
Retail @ $.58 each vs $.53
Metered
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
1 $0.510 $0.530 3.9%
2 $0.710 $0.730 2.8%
3 $0.910 $0.930 2.2%
Letters
Metered Letters
Annual Postage # of Pieces @ $.53 each Savings @ $.05 Each
$1,000 1,887 $94.34
$2,000 3,774 $188.68
$10,000 18,868 $943.40
$100,000 188,679 $9,433.96
$1,000,000 1,886,792 $94,339.62
First-Class® Mail Metered Savings
First-Class Mail® Commercial
• 7 - 7.8% increase for automation letters
• Flats have the largest increase at 14.9% - 20.7%
• Post Cards increasing by 13.8% - 14.4%
• Full Service IMB customers still qualify for the additional $.003 savings
June 23, 2021 7
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Automation 5 Digit 1 $0.398 $0.426 7.0% $0.460 $0.555 20.7% $0.269 $0.306 13.8%
Automation 3 Digit $0.618 $0.730 18.1%
Automation AADC 1 $0.428 $0.461 7.7% $0.666 $0.783 17.6% $0.279 $0.318 14.0%
Automation Mixed AADC 1 $0.450 $0.485 7.8% $0.774 $0.891 15.1% $0.285 $0.326 14.4%
Presorted (Non Automation) 1 $0.460 $0.494 7.4% $0.870 $1.000 14.9% $0.293 $0.335 14.3%
Commercial First-Class Mail®
Letters Flats* Post Cards
Flats Percentage Increase by Weight
Weight
Not Over
(ounces) 5-Digit 3-Digit ADC Mixed ADC Presorted Single Piece
1 21% 18% 18% 15% 15% 16%
3 11% 11% 11% 10% 10% 11%
5 8% 8% 8% 7% 8% 9%
7 6% 6% 6% 6% 6% 7%
9 5% 5% 5% 5% 5% 6%
11 4% 4% 4% 4% 5% 5%
13 3% 4% 4% 4% 4% 5%
Marketing Mail® (Formerly called Standard Mail)
• 6.9% - 8.6% increase for letters
• Flats increase at 7.1% – 10%
• Destination Entry Discounts are increasing at 5% - 12.5% for Letters and growing by
0% - 2.3 for Flats
June 23, 2021 8
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Automation 5 Digit ≤3.5 $0.259 $0.277 6.9% $0.450 $0.482 7.1%
Automation 3 Digit ≤4 $0.588 $0.640 8.8%
Automation AADC/ADC ≤3.5 $0.285 $0.309 8.4% $0.663 $0.729 10.0%
Automation Mixed AADC/ADC-Origin ≤3.5 $0.304 $0.330 8.6% $0.726 $0.798 9.9%
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Automation 5 Digit ≤3.5 $0.138 $0.146 5.8% $0.256 $0.278 8.6%
Automation 3 Digit ≤4 $0.394 $0.436 10.7%
Automation AADC/ADC ≤3.5 $0.164 $0.178 8.5% $0.469 $0.525 11.9%
Automation Mixed AADC/ADC-Origin ≤3.5 $0.183 $0.199 8.7% $0.532 $0.594 11.7%
Marketing Mail®
Letters Flats
Marketing Mail® Nonprofit
Letters Flats
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Automation 5 Digit >4 $0.200 $0.219 9.5% $1.000 $1.052 5.2%
Automation 3 Digit >4 $0.338 $0.377 11.5% $1.000 $1.052 5.2%
Automation AADC/ADC >4 $0.413 $0.466 12.8% $1.000 $1.052 5.2%
Automation Mixed AADC/ADC-Origin >4 $0.476 $0.535 12.4% $1.000 $1.052 5.2%
Weight
Ounces
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Automation 5 Digit >4 $0.039 $0.053 35.9% $0.866 $0.900 3.9%
Automation 3 Digit >4 $0.177 $0.211 19.2% $0.866 $0.900 3.9%
Automation AADC/ADC >4 $0.252 $0.300 19.0% $0.866 $0.900 3.9%
Automation Mixed AADC/ADC-Origin >4 $0.315 $0.369 17.1% $0.866 $0.900 3.9%
Marketing Mail® Commercial Flats > 4 Oz
Per Piece Per Pound
Marketing Mail® Nonprofit Flats > 4 Oz
Per Piece Per Pound
Prior to
08/29/21
New Rates
08/29/21 % Change
Prior to
08/29/21
New Rates
08/29/21 % Change
Prior to
08/29/21
New Rates
08/29/21 % Change
DNDC $0.020 $0.021 5.0% $0.069 $0.069 0.0% $0.276 $0.276 0.0%
DSCF $0.024 $0.027 12.5% $0.078 $0.079 1.3% $0.311 $0.318 2.3%
Letters Flats <4 Ounces Flats >4 Ounces
Destination Entry Discounts for Marketing Mail
First-Class Mail® Savings Options
• Use Meters or PC Postage to save $.05 on letters
• Consider Presort services if you run over 500 pieces per day or have one-time
mailings over 1000 pieces.
• Automating your mailings in house can have drastic postage savings.
• Presort and automation levels go up to 3.5 ounces for the same rate.
• Flats and post cards can have the same automation rates as letters.
• Consider moving generic content mail from First Class to Marketing Mail
June 23, 2021 9
Mail Piece Examples
First-Class Mail®
Retail Single Piece
First-Class Mail®
Metered Single
Piece
Typical Presort
Service - First-
Class Mail®
First-Class
Mail® -
Automation
Marketing Mail®
- Automation
Marketing
Mail® Non
Profit-
Automation
1 Ounce #10 Envelope $0.58 $0.53 $.461-.494 $.426-.485 $.277-.33 $.146-.199
3 Ounce Newsletter (6X9) $0.98 $0.93 $.461-.494 $.426-.485 $.277-.33 $.146-.199
8 Ounce Flat (9X12) $2.56 $2.56 $2.291-2.40 $1.955-2.291 $.745-1.061 $.503-.819
Post Card $0.40 $0.40 $0.335 $.306-.326 n/a n/a
Single Piece Rates Automation Mail with Barcodes
Converting Lightweight Flats to Letters
Lightweight Flats
– Look for average flat prices of $1.60 or less. Over 50% Savings
by folding.
– 6 x 9 Envelopes only require that you fold in half.
June 23, 2021 10
Flat Envelope
Sheets
First Class
Mail® Flat -
Large Envelope
First Class
Mail® Letter -
6X9 Envelope
(Metered)
Typical Presort
Service - First-
Class Mail®
Letter
First-Class
Mail® -
Automation
Letter Savings
1-2 $1.16 $0.53 $.485-.494 $.426-.485 54-63%
3-4 $1.36 $0.53 $.485-.494 $.426-.485 61-69%
6-10 $1.56 $0.73 $.485-.494 $.426-.485 53-73%
Weight Assumptions - Paper = .16 Ounces, Flat = .6 Ounces, 6X9 Envelope = .3 Ounces
Letter Envelope - Example 6X9 or #10
Priority Mail® Rate Categories
Retail – At USPS Counter or through a
postage meter.
Commercial Base – Through a PC
Postage Solution (USPS.com will no longer qualify
for these rates and will default to retail)
Commercial Plus – Through a
contracted agreement with the USPS.
– Priority Mail® - 50,000 packages
per year across facilities – Rates
are the same as Base
June 23, 2021 11
RATES ARE NOT
CHANGING!
Additional Rate Change Items
June 23, 2021 12
Group
Prior to
08/29/21
New Rates
08/29/21 % Increase
Prior to
08/29/21
New
Rates
08/29/21
%
Increase
Prior to
08/29/21
New Rates
08/29/21
%
Increase
Canada $1.20 $1.30 8.3% $1.20 $1.30 8.3% $1.20 $1.30 8.3%
Mexico (Group 2) $1.20 $1.30 8.3% $1.81 $1.96 8.3% $1.20 $1.30 8.3%
Group 3-5 $1.20 $1.30 8.3% $2.24 $2.43 8.5% $1.20 $1.30 8.3%
Group 6-9 $1.20 $1.30 8.3% $2.08 $2.25 8.2% $1.20 $1.30 8.3%
First-Class Mail International®
1 Ounce 2 Ounce Post Cards
Weight LB's
Prior to
08/29/21
New Rates
08/29/21 % Increase
1 $2.75 $3.03 10.2%
2 $3.28 $3.63 10.7%
5 $4.87 $5.43 11.5%
10 $7.52 $8.43 12.1%
Single Piece
Library Mail
Weight LB's
Prior to
08/29/21
New Rates
08/29/21 % Increase
1 $2.89 $3.19 10.4%
2 $3.45 $3.82 10.7%
5 $5.13 $5.71 11.3%
10 $7.93 $8.86 11.7%
Single Piece
Media Mail
Special Services
Special Services Retail Electronic
Prior to
08/29/21
New Rates
08/29/21 % Increase
New
Rates
08/29/21
New
Rates
08/29/21
%
Increase
Certificate of Mailing $1.55 $1.65 6.5%
Registered™ without Insurance $12.90 $13.75 6.6%
Certified Mail™ $3.60 $3.75 4.2%
Return Receipt $2.85 $3.05 7.0% $1.75 $1.85 5.7%
Insurance $100 $2.95 $3.15 6.8%
Insurance $500 $7.20 $8.75 21.5%
Marketing Mail® parcels Tracking $0.20 $0.24 20.0%
Signature Confirmation $3.20 $3.45 7.8% $2.70 $2.90 7.4%
Annual Permit Fees $245.00 $265.00 8.2%
Business Reply Mail
Permit Fee $245.00 $265.00 8.2%
Account Maintenance Fee $740.00 $800.00 8.1%
Quarterly Fee $2,460 $2,675 8.7%
Basic $0.86 $0.92 7.0%
High Volume $0.096 $0.110 14.6%
QBRM Basic $0.072 $0.077 6.9%
QBRM High Volume $0.014 $0.016 14.3%
June 23, 2021 13
Certified Mail with Electronic Return Receipt
(eRR)
• Save $1.20 by switching to an electronic version.
June 23, 2021 14
Savings Strategies – Business Reply Mail
• Have an inventory of all your
Business Reply accounts.
• Link in the USPS ACS system.
• Validate that all accounts are being
used.
• Make sure accounts are set up at
the right levels.
• Monitor usage in monthly/quarterly
reviews.
• Significant savings by having
accounts in the right program as
you can see in the table.
June 23, 2021 15
Business Reply Mail Basics Basic
High
Volume
QBRM
Basic
QBRM
High
Volume
Annual Permit Fee $265 $265 $265 $265
Annual Account Maintenance Fee $0 $800 $800 $800
Quarterly Fee $0 $0 $0 $2,675
Total Annual Fees $265 $1,065 $1,065 $11,765
Fee per piece $0.920 $0.110 $0.077 $0.016
Postage for 1 ounce mail $0.580 $0.580 $0.561 $0.561
Total cost - Fee and Postage $1.500 $0.690 $0.638 $0.577
Annual Cost by pieces
100 $415 $1,134 $1,129 $11,823
250 $640 $1,238 $1,225 $11,909
500 $1,015 $1,410 $1,384 $12,054
1000 $1,765 $1,755 $1,703 $12,342
2500 $4,015 $2,790 $2,660 $13,208
5000 $7,765 $4,515 $4,255 $14,650
10000 $15,265 $7,965 $7,445 $17,535
25000 $37,765 $18,315 $17,015 $26,190
50000 $75,265 $35,565 $32,965 $40,615
100000 $150,265 $70,065 $64,865 $69,465
250000 $375,265 $173,565 $160,565 $156,015
500000 $750,265 $346,065 $320,065 $300,265
1000000 $1,500,265 $691,065 $639,065 $588,765
Largest Increase in 10 years!
• Two rate changes in one year.
• This is the largest across the discount categories.
June 23, 2021 16
Date
First-Class
Mail® Retail
Letters
First-Class
Mail® Metered
Letters
First-Class
Mail® Flats
First-Class
Mail® Auto
Letters
First-Class
Mail® Auto
Flats
Marketing-
Mail® Letters
Marketing-
Mail® Flats
8/29/2021 6% 4% 16% 8% 17% 8% 9%
1/24/2021 0% 2% 0% 2% 7% 1% 9%
Combined 2021 6% 6% 16% 9% 25% 9% 18%
1/26/2020 0% 0% 0% 2% -4% 2% 4%
1/27/2019 10% 6% 0% 1% 2% 2% 5%
1/21/2018 2% 2% 2% 1% -2% 0% 5%
1/22/2017 4% -1% 4% 0% 0% -1% 2%
4/10/2016 -4% -4% -4% -4% -5% -4% -4%
5/31/2015 0% 1% 0% 2% 2% 1% 2%
1/26/2014 7% 5% 7% 6% 7% 6% 6%
1/27/2013 2% 2% 2% 2% 2% 2% 2%
1/12/2012 2% 2% 2% 3% 4% 2% 2%
Typically,
outsourced mail
Overview
• In the US, most of the production mail is processed
through an outsourced mailer who has the staff,
equipment and expertise. This outsourcing happened
for the following reasons:
– USPS® rules got more difficult for automation discounts.
– Less mail expertise internally
– Improved levels of automation externally
Key Issues:
• Least understood category
• Lowest level of visibility
• Highest area of opportunity for overspending
June 23, 2021 17
Lack of Visibility
The biggest issue is this category can be from
fragmented spends across multiple departments.
• Statement and transaction print documents –
Accounts Receivable
• Advertising based projects - Marketing
• Customer service information announcements –
Customer Service/Operations
• Internal staff mailings - Human Resources
Increased difficulty with large organizations with
multiple locations, business units, divisions and
departments.
June 23, 2021 18
Postal Advocate – Process
to Gain Visibility
• Start with Accounts Payable – Most outside mailings
will have the postage funded by USPS permits that are
paid directly vs. paying the mail service for the postage.
Do a search of USPS spends and look for larger
amounts that could be for outside mailing projects.
• Reach out to the largest departments to see what
service providers are being used. For instance:
Accounts Receivable, Marketing, Customer Service and
Human Resources
• Get copies of invoices to see the detail on what is being
charged.
• Reach out to the vendors to see if they have web
portals that can provide more detail.
• Go to procurement to see if there are contracts in place
with these vendors with defined rates.
June 23, 2021 19
Invoice Detail Issue
• Every vendor provides different levels of detail on their invoices. Some
charge at the job level while others break down each fee.
• We recommend that you require vendors to provide the detail by fee so that
you can understand what you are paying to compare the rates
• If it is not on the invoice, request the detail on web portals or in emailed
backup detail reports.
June 23, 2021 20
By Job By Fee
Service Fee Variability
June 23, 2021 21
Was the job put out to
bid or was in an add on
project to an existing
provider?
Does the vendor have a
master service
agreement for continual
work at specific rates?
What is the quantity and
frequency of the
mailing?
What are the data
processing charges?
What type of stock is
used for paper and
envelopes?
How is it printed – Type
of printing technology
and color or black and
white?
How was the piece
prepared and could it all
be automated or was
their hand work or high
levels of personalization
that was required?
How was it mailed and
what level of postal
automation was used?
What third party
services were used for
presorting, mail
forwarding or shipping?
What was needed from
the data besides
mailing:
You will find huge variations in what is charged from one service provider to another.
These are the factors that have the greatest impact:
Because of the difficulties in comparing jobs, most organizations have little control
or knowledge of best rates.
Mailing Categories
Mailing Categories Description
Cost High to Low 1-5 (5
being the highest)
Material Paper, envelopes, Pre-printed stock. 3
Data Processing The cost to receive data files and turn it into its final version. 2
Mail Automation
Processing the mail list through postal software to meet the USPS®
requirements.
2
Printing Putting images onto paper 4
Mail Preparation Folding, Inserting, tabbing, inkjetting addresses, hand processing into final form. 4
Postage USPS costs to mail the item. This also includes Presort services. 5
Email The cost to divert the document to be emailed vs. printed. 2
Transportation
Moving mail to the USPS or closer to its final destination to reduce postage
costs.
1
Data Storage
Image creation, storage and retrieval typically for backup or to have e-
presentment.
3
Miscellaneous Other charges based on the specifics of your project. 1
June 23, 2021 22
We have developed a process that can simplify this by the following:
• Gain access to the fee level detail for all invoices.
• Log each line item to one of the categories above along with subcategories based
on the types of services used.
• Maintain the data over periods of time to be able to compare vendors and services.
• Benchmark rates and use the data for further negotiations and vendor selections.
Key Areas of Savings
1. Postage – Largest Area
2. Printing
3. Image Creation/Storage and
Presentment
June 23, 2021 23
Postage – Largest Expense Area
June 23, 2021 24
• First Class® Mail - Personalized in correspondence – Invoice, check, confirmation
statement – 1 - 5 day delivery
• Marketing Mail – Everyone getting the same message outside of basic
personalization – Advertising, newsletter, giving request – 4 – 12 day delivery.
• Need to push your service providers for the highest levels of automation.
Mail Piece Examples
First-Class Mail®
Retail Single Piece
First-Class Mail®
Metered Single
Piece
Typical Presort
Service - First-
Class Mail®
First-Class
Mail® -
Automation
Marketing
Mail® -
Automation
Marketing
Mail® Non
Profit-
Automation
1 Ounce #10 Envelope $0.58 $0.53 $.461-.494 $.426-.485 $.277-.33 $.146-.199
3 Ounce Newsletter (6X9) $0.98 $0.93 $.461-.494 $.426-.485 $.277-.33 $.146-.199
8 Ounce Flat (9X12) $2.56 $2.56 $2.291-2.40 $1.955-2.291 $.745-1.061 $.503-.819
Post Card $0.40 $0.40 $0.335 $.306-.326 n/a n/a
Single Piece Rates Automation Mail with Barcodes
Nuts and Bolts of Postal Discounting
Methods for automation
• Third Party Presort Service
• Inhouse Software – One job at a time
• Inhouse Software – Commingled jobs – Best discounts – typically only the largest shops provide.
• Marketing Mail third party forwarding service
• Marketing Mail internal transportation department forwarding directly
June 23, 2021 25
Marketing Mail™
Printing
June 23, 2021 26
Second biggest cost
area
Technology used can
have a big impact on
cost - Cut sheet, roll
feed, laser, ink jet, color
or monochrome.
What level of print
suppression is used to
move documents to
email or web
presentment?
Can jobs be presented
together vs as
independent jobs?
Are discounts offered for
duplexing (2-sided
printing)?
New virtual printers can
allow you to send jobs
from user’s desktops to
a continuous workflow.
Allows for lower volume
print.
Things to consider:
Data
Management
Huge costs can be in the way your data is
managed. This could be in the following
areas:
– Accepting data files.
– Formatting data to the vendors
workflow.
– Formatting the documents with your
customer logic.
– Mail Automation processing to
comply with USPS requirements.
– Email, fax or texting of your
documents.
– Image creation and storage of your
files.
– Web presentment of the stored
images on custom portals.
Client Example:
Sending invoices and paying $.004 to create
backup images of each printed page.
Paying $.004 per image per month for every
stored image. Stored images for 24 months.
They have been using this service for 5 years
and have 3,600,000 images stored.
Sending 75,000 invoices per month which
was 150,000 images.
Monthly Image Creation = $600
Monthly Image Storage = $14,400
Total Annual Cost $180,000 or $.20 per
invoice mailed!
With proper bidding this fee was cut in half
and the storage model was changed to 18
months.
Annual savings = $133,200
June 23, 2021 27
Vendor
Strategies
We recommend running an RFP (Request for Proposal) to find
the best rates and service levels for your mailings.
• Build a defined template where it is easy to compare rates
on the main mail expenses.
• Include vendors that meet the following criteria:
– Can support your customers geographic areas at the
lowest costs:
• If all mail is local – find a local or regional
providers
• If mail is nationwide, look for providers that are
in the middle of the country or at desirable
postal hubs that can reach the majority of the
country in 2-3 day delivery.
– Are close to a major presort center.
– Are in low cost of living areas who can pass on the
savings in rates.
– Have the highest level of technology to support your
needs.
– Specialize in your main classes of mail or industry
vertical – Example: Bank Statements
– Have the value-added services you need.
• Compare the responders and request references.
• Review account management processes for customer
service and issue resolution.
• Look for discounts by consolidating higher volumes of mail
into fewer suppliers.
June 23, 2021 28
Year
First Class®
Mail Presort % Change
Marketing
Mail % Change
2020 36,246,494 -2.4% 64,180,125 -17.9%
2019 37,130,541 -1.9% 75,690,047 -2.1%
2018 37,833,487 -2.5% 77,305,661 -1.4%
2017 38,795,454 -3.0% 78,369,843 -3.3%
2016 39,943,145 -0.6% 80,929,933 1.0%
2015 40,174,244 0.0% 80,090,273 -0.4%
2014 40,193,317 -2.4% 80,374,260 -0.7%
2013 41,144,184 -3.4% 80,962,678 1.4%
2012 42,524,039 -4.6% 79,801,009 -6.1%
2011 44,494,498 -3.9% 84,691,971 2.6%
2010 46,225,386 -3.7% 82,524,693 -0.2%
2009 47,933,717 -8.3% 82,706,211 -19.8%
2008 51,935,871 3.8% 99,084,155 -4.5%
2007 49,978,441 0.2% 103,516,112 1.0%
2006 49,862,002 102,459,559
Data in Thousands
From USPS REVENUE, PIECES, AND WEIGHT BY CLASSES OF MAIL AND SPECIAL
SERVICES Reporting
Mail declines leads to
more competition
Marketing Agencies
and Consolidators
There is a trend to use marketing agencies or
consolidators for your Marketing/Promotional
mail. They manage the creative and distribute
the printing and mailing to service providers that
they have vetted.
Potential issues:
– Are you getting the best rates?
– Are you getting any economies of scale
or are they splitting the work among
multiple providers?
– Do you have any control over the
mailings?
– Do you have any visibility to the fees or
is it aggregated on summary bills?
– Are you assured that you are getting the
best services available?
Solution:
Use the Marketing Agencies for the
creative; but manage the output through
mail and print services that are controlled
directly.
• By combining mailings under
one agreement, you can be
assured that you are mailing at
the lowest rates.
• You can customize the service
to what is needed from a mail,
print and retention strategy.
• You can get higher levels of
vendor support due to the size
and scope of your relationship.
• Larger mailers have higher
levels of automation that can
provide lower postage rates,
distributed print across facilities
and can move mail closer to its
final destination without using
third parties to maintain control.
June 23, 2021 29
Manage the Future
Relationship
Once the new service providers and rates are in
place it is important to set up a process for managing
the relationship including:
– Vendor portal access to all mailings
– Visibility to all invoices
– Audit process to look for the following:
• Billing errors where refunds are
required.
• Service failures where contracted
refunds are available.
• Expense areas that are above
documented thresholds to work for
reductions.
• Budgeting around postage increases.
– Quarterly review process that defines the
changes and new strategies for the future.
– Ongoing meetings to move enhancements
forward.
June 23, 2021 30
How To Budget For This Increase
June 23, 2021 31
Email:
doris.tam@postaladvocate.com
for a copy of this excel
budgeting tool.
Class Weight
% Of
Class % Change
Estimated
Current
Spend
Estimated
New Spend Difference
First Class Metered Letters 1 85% 4%
2 10% 3%
3 5% 2%
Total 3.8% $0.00 $0.00
First Class Flats 11% $0.00 $0.00
First Class Parcles - Retail 0% $0.00 $0.00
First Class Parcles - Commercial 0% $0.00 $0.00
First Class Automation Letters 100% 8% $0.00 $0.00
First Class Automation Flats 8% $0.00 $0.00
Certified with Return Reciept 5% $0.00 $0.00
Priority Mail Retail 0% $0.00 $0.00
Priority Mail Commercial 0% $0.00 $0.00
Marketing Mail
Letters 8% $0.00 $0.00
Flats 9% $0.00 $0.00
Other Misc Mail 5% $0.00 $0.00
What you need to do:
If you have a mail machine, make sure you
download the new rates before Aug 29, 2021
when the rates go into effect. **This is not
final**
Here are links to the different meter vendors:
FP:
http://www.fp-usa.com/ratechange/
Quadient:
https://www.quadient.com/resources/postal-rate-
information
Pitney Bowes:
http://www.pitneybowes.com/us/postal-information/rate-
change-info.html
Stamps.com:
https://blog.stamps.com/2021/06/04/usps-to-implement-
second-postage-rate-increase-in-2021/
Go to the USPS Postal Explorer website for more
information:
http://pe.usps.gov/PriceChange/Index
June 23, 2021 32
Once Finalized -
Download the Postal
Advocate Rate
Comparison Guide –
www.postaladvocate.com
Helping multi-location
organizations streamline
their mailing costs
Over 172,000 pieces of
equipment, managed
by Postal Advocate
Recovered over
$21,000,000
in lost postage, vendor
overcharges and fees
ENTERPRISE-WIDEMAILAUDITANDRECOVERY
OVER $65,000,000 IN CLIENT SAVINGS
$1.9M
59%
Average Client
Savings
Average Equipment
Savings
HOW WE DO IT
• 220+ years of industry experience
• Comprehensive web-based tool
providing visibility of all mail
and equipment spend
• Time Savings - Assistance
in fleet management
visit www.postaladvocate.com or call (888)977-MAIL(6245)
Sign Limited Agency
Agreement/Kick-Off Call.
Provide copies of vendor
invoices, AP export,
location list,
equipment inventory list.
Present savings opportunities
and get client approval.
Postal Advocate provides
ongoing support,
manages renewals, billing
and vendor compliance.
Provide enterprise visibility of
all spend, costs and
documented savings
through enterpriseAdvocate.
Provide client log-in.
1 2
3
4 5 6
HOW IT
WORKS
Work with current vendor to build population
report, contract terms/start/end dates,
postage volumes, costs.
Analyze spend, check for contract
compliance, billing errors, vendor
fees/overcharges, lost postage.
Identify savings opportunities.
Submit vendor credit requests,
lost postage forms and
eliminate avoidable fees.
Negotiate pricing. Create catalog.
Work with locations -
asset validation, rightsize, termination…
Full implementation of savings.
visit www.postaladvocate.com or call (888)977-MAIL(6245)
Conduct Analysis
NO COST – AUDIT PHASE CONTRACTED CLIENT
June 23, 2021 36
June 23, 2021 37

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August 2021 USPS® Proposed Rate Increases - What You Need To Know

  • 1. August 2021 USPS® Proposed Rate Increases - What You Need To Know
  • 2. Background and Experience Speaker: Adam Lewenberg • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of 160,000 pieces of mailing equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Former Industry Co Chair- Boston Postal Customer Council and Mail Systems Management Association. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 17 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nations top accounts. June 23, 2021 2
  • 3. What We’ll Cover: • What rates are changing • How this impacts you • What you need to do • Savings tips • USPS Thoughts June 23, 2021 3 New rates would take effect Sunday August 29, 2021 **Rates are not final, and we should know by 7/15/21 *We will focus on the most common rate structures. For more detail on other mail classes and services go to USPS Postal Explorer at http://pe.usps.gov/PriceChange/Index
  • 4. USPS® Volume Declines June 23, 2021 4 Year First Class® Mail - Single Piece % Change First Class® Mail Presort % Change Marketing Mail % Change 2020 15,172,441 -8.8% 36,246,494 -2.4% 64,180,125 -17.9% 2019 16,511,298 -5.7% 37,130,541 -1.9% 75,690,047 -2.1% 2018 17,460,477 -6.4% 37,833,487 -2.5% 77,305,661 -1.4% 2017 18,582,618 -6.0% 38,795,454 -3.0% 78,369,843 -3.3% 2016 19,705,721 -5.3% 39,943,145 -0.6% 80,929,933 1.0% 2015 20,741,368 -3.8% 40,174,244 0.0% 80,090,273 -0.4% 2014 21,524,319 -4.5% 40,193,317 -2.4% 80,374,260 -0.7% 2013 22,501,509 -6.3% 41,144,184 -3.4% 80,962,678 1.4% 2012 23,913,510 -8.9% 42,524,039 -4.6% 79,801,009 -6.1% 2011 26,035,071 -9.8% 44,494,498 -3.9% 84,691,971 2.6% 2010 28,584,912 -10.8% 46,225,386 -3.7% 82,524,693 -0.2% 2009 31,682,890 -11.6% 47,933,717 -8.3% 82,706,211 -19.8% 2008 35,355,570 -9.1% 51,935,871 3.8% 99,084,155 -4.5% 2007 38,565,956 49,978,441 0.2% 103,516,112 1.0% 2006 49,862,002 102,459,559 Data in Thousands From USPS REVENUE, PIECES, AND WEIGHT BY CLASSES OF MAIL AND SPECIAL SERVICES Reporting Letter volume dropping fast! Making up for volume declines with rate changes Increased number of drop off points with fewer pieces per stop. Volumes seldom go up after a major correction.
  • 5. First-Class Mail® Single Piece Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase 1 $0.55 $0.58 5.5% $1.00 $1.16 16.0% 2 $0.75 $0.78 4.0% $1.20 $1.36 13.3% 3 $0.95 $0.98 3.2% $1.40 $1.56 11.4% 6 N/A N/A $2.00 $2.16 8.0% 13 N/A N/A $3.40 $3.56 4.7% Post Card $0.36 $0.40 11.1% Letters Flats First-Class Mail® Retail • 5.5% Increase on 1 Oz Letters • 1 Oz Flats increase from $1.00 to $1.16. That’s a 16% increase! • Post Cards increase by 11.1% June 23, 2021 5
  • 6. Upcoming USPS® Rate Change June 23, 2021 6 • Metered mail (including PC Postage) will save $.05 per piece over stamps purchased from the Post Office (9.4%) Savings over First-Class Mail® Retail @ $.58 each vs $.53 Metered Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase 1 $0.510 $0.530 3.9% 2 $0.710 $0.730 2.8% 3 $0.910 $0.930 2.2% Letters Metered Letters Annual Postage # of Pieces @ $.53 each Savings @ $.05 Each $1,000 1,887 $94.34 $2,000 3,774 $188.68 $10,000 18,868 $943.40 $100,000 188,679 $9,433.96 $1,000,000 1,886,792 $94,339.62 First-Class® Mail Metered Savings
  • 7. First-Class Mail® Commercial • 7 - 7.8% increase for automation letters • Flats have the largest increase at 14.9% - 20.7% • Post Cards increasing by 13.8% - 14.4% • Full Service IMB customers still qualify for the additional $.003 savings June 23, 2021 7 Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Automation 5 Digit 1 $0.398 $0.426 7.0% $0.460 $0.555 20.7% $0.269 $0.306 13.8% Automation 3 Digit $0.618 $0.730 18.1% Automation AADC 1 $0.428 $0.461 7.7% $0.666 $0.783 17.6% $0.279 $0.318 14.0% Automation Mixed AADC 1 $0.450 $0.485 7.8% $0.774 $0.891 15.1% $0.285 $0.326 14.4% Presorted (Non Automation) 1 $0.460 $0.494 7.4% $0.870 $1.000 14.9% $0.293 $0.335 14.3% Commercial First-Class Mail® Letters Flats* Post Cards Flats Percentage Increase by Weight Weight Not Over (ounces) 5-Digit 3-Digit ADC Mixed ADC Presorted Single Piece 1 21% 18% 18% 15% 15% 16% 3 11% 11% 11% 10% 10% 11% 5 8% 8% 8% 7% 8% 9% 7 6% 6% 6% 6% 6% 7% 9 5% 5% 5% 5% 5% 6% 11 4% 4% 4% 4% 5% 5% 13 3% 4% 4% 4% 4% 5%
  • 8. Marketing Mail® (Formerly called Standard Mail) • 6.9% - 8.6% increase for letters • Flats increase at 7.1% – 10% • Destination Entry Discounts are increasing at 5% - 12.5% for Letters and growing by 0% - 2.3 for Flats June 23, 2021 8 Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Automation 5 Digit ≤3.5 $0.259 $0.277 6.9% $0.450 $0.482 7.1% Automation 3 Digit ≤4 $0.588 $0.640 8.8% Automation AADC/ADC ≤3.5 $0.285 $0.309 8.4% $0.663 $0.729 10.0% Automation Mixed AADC/ADC-Origin ≤3.5 $0.304 $0.330 8.6% $0.726 $0.798 9.9% Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Automation 5 Digit ≤3.5 $0.138 $0.146 5.8% $0.256 $0.278 8.6% Automation 3 Digit ≤4 $0.394 $0.436 10.7% Automation AADC/ADC ≤3.5 $0.164 $0.178 8.5% $0.469 $0.525 11.9% Automation Mixed AADC/ADC-Origin ≤3.5 $0.183 $0.199 8.7% $0.532 $0.594 11.7% Marketing Mail® Letters Flats Marketing Mail® Nonprofit Letters Flats Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Automation 5 Digit >4 $0.200 $0.219 9.5% $1.000 $1.052 5.2% Automation 3 Digit >4 $0.338 $0.377 11.5% $1.000 $1.052 5.2% Automation AADC/ADC >4 $0.413 $0.466 12.8% $1.000 $1.052 5.2% Automation Mixed AADC/ADC-Origin >4 $0.476 $0.535 12.4% $1.000 $1.052 5.2% Weight Ounces Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Automation 5 Digit >4 $0.039 $0.053 35.9% $0.866 $0.900 3.9% Automation 3 Digit >4 $0.177 $0.211 19.2% $0.866 $0.900 3.9% Automation AADC/ADC >4 $0.252 $0.300 19.0% $0.866 $0.900 3.9% Automation Mixed AADC/ADC-Origin >4 $0.315 $0.369 17.1% $0.866 $0.900 3.9% Marketing Mail® Commercial Flats > 4 Oz Per Piece Per Pound Marketing Mail® Nonprofit Flats > 4 Oz Per Piece Per Pound Prior to 08/29/21 New Rates 08/29/21 % Change Prior to 08/29/21 New Rates 08/29/21 % Change Prior to 08/29/21 New Rates 08/29/21 % Change DNDC $0.020 $0.021 5.0% $0.069 $0.069 0.0% $0.276 $0.276 0.0% DSCF $0.024 $0.027 12.5% $0.078 $0.079 1.3% $0.311 $0.318 2.3% Letters Flats <4 Ounces Flats >4 Ounces Destination Entry Discounts for Marketing Mail
  • 9. First-Class Mail® Savings Options • Use Meters or PC Postage to save $.05 on letters • Consider Presort services if you run over 500 pieces per day or have one-time mailings over 1000 pieces. • Automating your mailings in house can have drastic postage savings. • Presort and automation levels go up to 3.5 ounces for the same rate. • Flats and post cards can have the same automation rates as letters. • Consider moving generic content mail from First Class to Marketing Mail June 23, 2021 9 Mail Piece Examples First-Class Mail® Retail Single Piece First-Class Mail® Metered Single Piece Typical Presort Service - First- Class Mail® First-Class Mail® - Automation Marketing Mail® - Automation Marketing Mail® Non Profit- Automation 1 Ounce #10 Envelope $0.58 $0.53 $.461-.494 $.426-.485 $.277-.33 $.146-.199 3 Ounce Newsletter (6X9) $0.98 $0.93 $.461-.494 $.426-.485 $.277-.33 $.146-.199 8 Ounce Flat (9X12) $2.56 $2.56 $2.291-2.40 $1.955-2.291 $.745-1.061 $.503-.819 Post Card $0.40 $0.40 $0.335 $.306-.326 n/a n/a Single Piece Rates Automation Mail with Barcodes
  • 10. Converting Lightweight Flats to Letters Lightweight Flats – Look for average flat prices of $1.60 or less. Over 50% Savings by folding. – 6 x 9 Envelopes only require that you fold in half. June 23, 2021 10 Flat Envelope Sheets First Class Mail® Flat - Large Envelope First Class Mail® Letter - 6X9 Envelope (Metered) Typical Presort Service - First- Class Mail® Letter First-Class Mail® - Automation Letter Savings 1-2 $1.16 $0.53 $.485-.494 $.426-.485 54-63% 3-4 $1.36 $0.53 $.485-.494 $.426-.485 61-69% 6-10 $1.56 $0.73 $.485-.494 $.426-.485 53-73% Weight Assumptions - Paper = .16 Ounces, Flat = .6 Ounces, 6X9 Envelope = .3 Ounces Letter Envelope - Example 6X9 or #10
  • 11. Priority Mail® Rate Categories Retail – At USPS Counter or through a postage meter. Commercial Base – Through a PC Postage Solution (USPS.com will no longer qualify for these rates and will default to retail) Commercial Plus – Through a contracted agreement with the USPS. – Priority Mail® - 50,000 packages per year across facilities – Rates are the same as Base June 23, 2021 11 RATES ARE NOT CHANGING!
  • 12. Additional Rate Change Items June 23, 2021 12 Group Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Prior to 08/29/21 New Rates 08/29/21 % Increase Canada $1.20 $1.30 8.3% $1.20 $1.30 8.3% $1.20 $1.30 8.3% Mexico (Group 2) $1.20 $1.30 8.3% $1.81 $1.96 8.3% $1.20 $1.30 8.3% Group 3-5 $1.20 $1.30 8.3% $2.24 $2.43 8.5% $1.20 $1.30 8.3% Group 6-9 $1.20 $1.30 8.3% $2.08 $2.25 8.2% $1.20 $1.30 8.3% First-Class Mail International® 1 Ounce 2 Ounce Post Cards Weight LB's Prior to 08/29/21 New Rates 08/29/21 % Increase 1 $2.75 $3.03 10.2% 2 $3.28 $3.63 10.7% 5 $4.87 $5.43 11.5% 10 $7.52 $8.43 12.1% Single Piece Library Mail Weight LB's Prior to 08/29/21 New Rates 08/29/21 % Increase 1 $2.89 $3.19 10.4% 2 $3.45 $3.82 10.7% 5 $5.13 $5.71 11.3% 10 $7.93 $8.86 11.7% Single Piece Media Mail
  • 13. Special Services Special Services Retail Electronic Prior to 08/29/21 New Rates 08/29/21 % Increase New Rates 08/29/21 New Rates 08/29/21 % Increase Certificate of Mailing $1.55 $1.65 6.5% Registered™ without Insurance $12.90 $13.75 6.6% Certified Mail™ $3.60 $3.75 4.2% Return Receipt $2.85 $3.05 7.0% $1.75 $1.85 5.7% Insurance $100 $2.95 $3.15 6.8% Insurance $500 $7.20 $8.75 21.5% Marketing Mail® parcels Tracking $0.20 $0.24 20.0% Signature Confirmation $3.20 $3.45 7.8% $2.70 $2.90 7.4% Annual Permit Fees $245.00 $265.00 8.2% Business Reply Mail Permit Fee $245.00 $265.00 8.2% Account Maintenance Fee $740.00 $800.00 8.1% Quarterly Fee $2,460 $2,675 8.7% Basic $0.86 $0.92 7.0% High Volume $0.096 $0.110 14.6% QBRM Basic $0.072 $0.077 6.9% QBRM High Volume $0.014 $0.016 14.3% June 23, 2021 13
  • 14. Certified Mail with Electronic Return Receipt (eRR) • Save $1.20 by switching to an electronic version. June 23, 2021 14
  • 15. Savings Strategies – Business Reply Mail • Have an inventory of all your Business Reply accounts. • Link in the USPS ACS system. • Validate that all accounts are being used. • Make sure accounts are set up at the right levels. • Monitor usage in monthly/quarterly reviews. • Significant savings by having accounts in the right program as you can see in the table. June 23, 2021 15 Business Reply Mail Basics Basic High Volume QBRM Basic QBRM High Volume Annual Permit Fee $265 $265 $265 $265 Annual Account Maintenance Fee $0 $800 $800 $800 Quarterly Fee $0 $0 $0 $2,675 Total Annual Fees $265 $1,065 $1,065 $11,765 Fee per piece $0.920 $0.110 $0.077 $0.016 Postage for 1 ounce mail $0.580 $0.580 $0.561 $0.561 Total cost - Fee and Postage $1.500 $0.690 $0.638 $0.577 Annual Cost by pieces 100 $415 $1,134 $1,129 $11,823 250 $640 $1,238 $1,225 $11,909 500 $1,015 $1,410 $1,384 $12,054 1000 $1,765 $1,755 $1,703 $12,342 2500 $4,015 $2,790 $2,660 $13,208 5000 $7,765 $4,515 $4,255 $14,650 10000 $15,265 $7,965 $7,445 $17,535 25000 $37,765 $18,315 $17,015 $26,190 50000 $75,265 $35,565 $32,965 $40,615 100000 $150,265 $70,065 $64,865 $69,465 250000 $375,265 $173,565 $160,565 $156,015 500000 $750,265 $346,065 $320,065 $300,265 1000000 $1,500,265 $691,065 $639,065 $588,765
  • 16. Largest Increase in 10 years! • Two rate changes in one year. • This is the largest across the discount categories. June 23, 2021 16 Date First-Class Mail® Retail Letters First-Class Mail® Metered Letters First-Class Mail® Flats First-Class Mail® Auto Letters First-Class Mail® Auto Flats Marketing- Mail® Letters Marketing- Mail® Flats 8/29/2021 6% 4% 16% 8% 17% 8% 9% 1/24/2021 0% 2% 0% 2% 7% 1% 9% Combined 2021 6% 6% 16% 9% 25% 9% 18% 1/26/2020 0% 0% 0% 2% -4% 2% 4% 1/27/2019 10% 6% 0% 1% 2% 2% 5% 1/21/2018 2% 2% 2% 1% -2% 0% 5% 1/22/2017 4% -1% 4% 0% 0% -1% 2% 4/10/2016 -4% -4% -4% -4% -5% -4% -4% 5/31/2015 0% 1% 0% 2% 2% 1% 2% 1/26/2014 7% 5% 7% 6% 7% 6% 6% 1/27/2013 2% 2% 2% 2% 2% 2% 2% 1/12/2012 2% 2% 2% 3% 4% 2% 2% Typically, outsourced mail
  • 17. Overview • In the US, most of the production mail is processed through an outsourced mailer who has the staff, equipment and expertise. This outsourcing happened for the following reasons: – USPS® rules got more difficult for automation discounts. – Less mail expertise internally – Improved levels of automation externally Key Issues: • Least understood category • Lowest level of visibility • Highest area of opportunity for overspending June 23, 2021 17
  • 18. Lack of Visibility The biggest issue is this category can be from fragmented spends across multiple departments. • Statement and transaction print documents – Accounts Receivable • Advertising based projects - Marketing • Customer service information announcements – Customer Service/Operations • Internal staff mailings - Human Resources Increased difficulty with large organizations with multiple locations, business units, divisions and departments. June 23, 2021 18
  • 19. Postal Advocate – Process to Gain Visibility • Start with Accounts Payable – Most outside mailings will have the postage funded by USPS permits that are paid directly vs. paying the mail service for the postage. Do a search of USPS spends and look for larger amounts that could be for outside mailing projects. • Reach out to the largest departments to see what service providers are being used. For instance: Accounts Receivable, Marketing, Customer Service and Human Resources • Get copies of invoices to see the detail on what is being charged. • Reach out to the vendors to see if they have web portals that can provide more detail. • Go to procurement to see if there are contracts in place with these vendors with defined rates. June 23, 2021 19
  • 20. Invoice Detail Issue • Every vendor provides different levels of detail on their invoices. Some charge at the job level while others break down each fee. • We recommend that you require vendors to provide the detail by fee so that you can understand what you are paying to compare the rates • If it is not on the invoice, request the detail on web portals or in emailed backup detail reports. June 23, 2021 20 By Job By Fee
  • 21. Service Fee Variability June 23, 2021 21 Was the job put out to bid or was in an add on project to an existing provider? Does the vendor have a master service agreement for continual work at specific rates? What is the quantity and frequency of the mailing? What are the data processing charges? What type of stock is used for paper and envelopes? How is it printed – Type of printing technology and color or black and white? How was the piece prepared and could it all be automated or was their hand work or high levels of personalization that was required? How was it mailed and what level of postal automation was used? What third party services were used for presorting, mail forwarding or shipping? What was needed from the data besides mailing: You will find huge variations in what is charged from one service provider to another. These are the factors that have the greatest impact: Because of the difficulties in comparing jobs, most organizations have little control or knowledge of best rates.
  • 22. Mailing Categories Mailing Categories Description Cost High to Low 1-5 (5 being the highest) Material Paper, envelopes, Pre-printed stock. 3 Data Processing The cost to receive data files and turn it into its final version. 2 Mail Automation Processing the mail list through postal software to meet the USPS® requirements. 2 Printing Putting images onto paper 4 Mail Preparation Folding, Inserting, tabbing, inkjetting addresses, hand processing into final form. 4 Postage USPS costs to mail the item. This also includes Presort services. 5 Email The cost to divert the document to be emailed vs. printed. 2 Transportation Moving mail to the USPS or closer to its final destination to reduce postage costs. 1 Data Storage Image creation, storage and retrieval typically for backup or to have e- presentment. 3 Miscellaneous Other charges based on the specifics of your project. 1 June 23, 2021 22 We have developed a process that can simplify this by the following: • Gain access to the fee level detail for all invoices. • Log each line item to one of the categories above along with subcategories based on the types of services used. • Maintain the data over periods of time to be able to compare vendors and services. • Benchmark rates and use the data for further negotiations and vendor selections.
  • 23. Key Areas of Savings 1. Postage – Largest Area 2. Printing 3. Image Creation/Storage and Presentment June 23, 2021 23
  • 24. Postage – Largest Expense Area June 23, 2021 24 • First Class® Mail - Personalized in correspondence – Invoice, check, confirmation statement – 1 - 5 day delivery • Marketing Mail – Everyone getting the same message outside of basic personalization – Advertising, newsletter, giving request – 4 – 12 day delivery. • Need to push your service providers for the highest levels of automation. Mail Piece Examples First-Class Mail® Retail Single Piece First-Class Mail® Metered Single Piece Typical Presort Service - First- Class Mail® First-Class Mail® - Automation Marketing Mail® - Automation Marketing Mail® Non Profit- Automation 1 Ounce #10 Envelope $0.58 $0.53 $.461-.494 $.426-.485 $.277-.33 $.146-.199 3 Ounce Newsletter (6X9) $0.98 $0.93 $.461-.494 $.426-.485 $.277-.33 $.146-.199 8 Ounce Flat (9X12) $2.56 $2.56 $2.291-2.40 $1.955-2.291 $.745-1.061 $.503-.819 Post Card $0.40 $0.40 $0.335 $.306-.326 n/a n/a Single Piece Rates Automation Mail with Barcodes
  • 25. Nuts and Bolts of Postal Discounting Methods for automation • Third Party Presort Service • Inhouse Software – One job at a time • Inhouse Software – Commingled jobs – Best discounts – typically only the largest shops provide. • Marketing Mail third party forwarding service • Marketing Mail internal transportation department forwarding directly June 23, 2021 25 Marketing Mail™
  • 26. Printing June 23, 2021 26 Second biggest cost area Technology used can have a big impact on cost - Cut sheet, roll feed, laser, ink jet, color or monochrome. What level of print suppression is used to move documents to email or web presentment? Can jobs be presented together vs as independent jobs? Are discounts offered for duplexing (2-sided printing)? New virtual printers can allow you to send jobs from user’s desktops to a continuous workflow. Allows for lower volume print. Things to consider:
  • 27. Data Management Huge costs can be in the way your data is managed. This could be in the following areas: – Accepting data files. – Formatting data to the vendors workflow. – Formatting the documents with your customer logic. – Mail Automation processing to comply with USPS requirements. – Email, fax or texting of your documents. – Image creation and storage of your files. – Web presentment of the stored images on custom portals. Client Example: Sending invoices and paying $.004 to create backup images of each printed page. Paying $.004 per image per month for every stored image. Stored images for 24 months. They have been using this service for 5 years and have 3,600,000 images stored. Sending 75,000 invoices per month which was 150,000 images. Monthly Image Creation = $600 Monthly Image Storage = $14,400 Total Annual Cost $180,000 or $.20 per invoice mailed! With proper bidding this fee was cut in half and the storage model was changed to 18 months. Annual savings = $133,200 June 23, 2021 27
  • 28. Vendor Strategies We recommend running an RFP (Request for Proposal) to find the best rates and service levels for your mailings. • Build a defined template where it is easy to compare rates on the main mail expenses. • Include vendors that meet the following criteria: – Can support your customers geographic areas at the lowest costs: • If all mail is local – find a local or regional providers • If mail is nationwide, look for providers that are in the middle of the country or at desirable postal hubs that can reach the majority of the country in 2-3 day delivery. – Are close to a major presort center. – Are in low cost of living areas who can pass on the savings in rates. – Have the highest level of technology to support your needs. – Specialize in your main classes of mail or industry vertical – Example: Bank Statements – Have the value-added services you need. • Compare the responders and request references. • Review account management processes for customer service and issue resolution. • Look for discounts by consolidating higher volumes of mail into fewer suppliers. June 23, 2021 28 Year First Class® Mail Presort % Change Marketing Mail % Change 2020 36,246,494 -2.4% 64,180,125 -17.9% 2019 37,130,541 -1.9% 75,690,047 -2.1% 2018 37,833,487 -2.5% 77,305,661 -1.4% 2017 38,795,454 -3.0% 78,369,843 -3.3% 2016 39,943,145 -0.6% 80,929,933 1.0% 2015 40,174,244 0.0% 80,090,273 -0.4% 2014 40,193,317 -2.4% 80,374,260 -0.7% 2013 41,144,184 -3.4% 80,962,678 1.4% 2012 42,524,039 -4.6% 79,801,009 -6.1% 2011 44,494,498 -3.9% 84,691,971 2.6% 2010 46,225,386 -3.7% 82,524,693 -0.2% 2009 47,933,717 -8.3% 82,706,211 -19.8% 2008 51,935,871 3.8% 99,084,155 -4.5% 2007 49,978,441 0.2% 103,516,112 1.0% 2006 49,862,002 102,459,559 Data in Thousands From USPS REVENUE, PIECES, AND WEIGHT BY CLASSES OF MAIL AND SPECIAL SERVICES Reporting Mail declines leads to more competition
  • 29. Marketing Agencies and Consolidators There is a trend to use marketing agencies or consolidators for your Marketing/Promotional mail. They manage the creative and distribute the printing and mailing to service providers that they have vetted. Potential issues: – Are you getting the best rates? – Are you getting any economies of scale or are they splitting the work among multiple providers? – Do you have any control over the mailings? – Do you have any visibility to the fees or is it aggregated on summary bills? – Are you assured that you are getting the best services available? Solution: Use the Marketing Agencies for the creative; but manage the output through mail and print services that are controlled directly. • By combining mailings under one agreement, you can be assured that you are mailing at the lowest rates. • You can customize the service to what is needed from a mail, print and retention strategy. • You can get higher levels of vendor support due to the size and scope of your relationship. • Larger mailers have higher levels of automation that can provide lower postage rates, distributed print across facilities and can move mail closer to its final destination without using third parties to maintain control. June 23, 2021 29
  • 30. Manage the Future Relationship Once the new service providers and rates are in place it is important to set up a process for managing the relationship including: – Vendor portal access to all mailings – Visibility to all invoices – Audit process to look for the following: • Billing errors where refunds are required. • Service failures where contracted refunds are available. • Expense areas that are above documented thresholds to work for reductions. • Budgeting around postage increases. – Quarterly review process that defines the changes and new strategies for the future. – Ongoing meetings to move enhancements forward. June 23, 2021 30
  • 31. How To Budget For This Increase June 23, 2021 31 Email: doris.tam@postaladvocate.com for a copy of this excel budgeting tool. Class Weight % Of Class % Change Estimated Current Spend Estimated New Spend Difference First Class Metered Letters 1 85% 4% 2 10% 3% 3 5% 2% Total 3.8% $0.00 $0.00 First Class Flats 11% $0.00 $0.00 First Class Parcles - Retail 0% $0.00 $0.00 First Class Parcles - Commercial 0% $0.00 $0.00 First Class Automation Letters 100% 8% $0.00 $0.00 First Class Automation Flats 8% $0.00 $0.00 Certified with Return Reciept 5% $0.00 $0.00 Priority Mail Retail 0% $0.00 $0.00 Priority Mail Commercial 0% $0.00 $0.00 Marketing Mail Letters 8% $0.00 $0.00 Flats 9% $0.00 $0.00 Other Misc Mail 5% $0.00 $0.00
  • 32. What you need to do: If you have a mail machine, make sure you download the new rates before Aug 29, 2021 when the rates go into effect. **This is not final** Here are links to the different meter vendors: FP: http://www.fp-usa.com/ratechange/ Quadient: https://www.quadient.com/resources/postal-rate- information Pitney Bowes: http://www.pitneybowes.com/us/postal-information/rate- change-info.html Stamps.com: https://blog.stamps.com/2021/06/04/usps-to-implement- second-postage-rate-increase-in-2021/ Go to the USPS Postal Explorer website for more information: http://pe.usps.gov/PriceChange/Index June 23, 2021 32 Once Finalized - Download the Postal Advocate Rate Comparison Guide – www.postaladvocate.com
  • 33. Helping multi-location organizations streamline their mailing costs Over 172,000 pieces of equipment, managed by Postal Advocate Recovered over $21,000,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $65,000,000 IN CLIENT SAVINGS $1.9M 59% Average Client Savings Average Equipment Savings HOW WE DO IT • 220+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit www.postaladvocate.com or call (888)977-MAIL(6245)
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  • 35. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit www.postaladvocate.com or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT