Get ready. The current postal rate case is all about shape. And mailers are going to find out that one size does not fit all.
For starters, flat mail will be in a category of its own, whether first class or standard mail.
One expects rates to go up. But a larger impact will come in the form of new rules splitting bundles into separate five- and three-digit ZIP code categories.
Let’s say you’re a mailer sending seven pieces of standard mail, nine going to ZIP 18974 and eight to 189. You can now mail them all in a single bundle at the same rate (.275).
But if this revision goes through, those pieces will be subject to the proposed three-digit automation rate (.328), a 19% increase. That’s higher than the average for standard mail.
Then there’s the new not-flat machinable (NFM) category and a return of subjectivity to the mail verification process. The new rules hold that a flat piece must meet minimum flexibility criteria and maintain uniform thickness.
The flexibility test involves placing a piece of mail on a flat surface and extending it some distance over the edge, depending on its length. A technician presses down on the piece at a “central point” about an inch from the edge of the surface, exerting “steady pressure.”
The piece is deemed flexible if it can bend 1 or 2 inches, again depending on its size, without being damaged.
And who defines these terms? The technician performing the test.
Service bureaus used to complain that their customers were unable to mail a piece at the same rate from different parts of the country. The postal service responded, in part, with Merlin, a tool that helps mailers qualify for automation discounts and meet bulk mailing requirements. This has minimized such rate variations.
Under the proposed rules, though, the postage rate for a piece of standard mail reassigned to the NFM category could go up 200% or more.
Finally, there’s the elimination of the automation carrier route category for letter-size mail. Previously, mail that qualified at the carrier route level typically incurred below-average rate increases. But killing ACR for promotional pieces sent as standard mail will raise the price by 20% to 30%. And that’s significant, since the pieces will be reassigned to the five- and three-digit automation categories.
Is there any good news? Yes. First class letter mailers sending pieces that weigh more than 1 ounce will actually pay lower rates. With the separation of first class letters and flats, the cost differential of processing a 2-ounce letter compared with a 1-ounce piece is minimal. As a result, the rate for automation letters will go down by more than 34%.
Mailers can avoid implementation shock by asking service bureaus to analyze their files and mailings. This is not just another rate increase. Wise mailers won’t treat it that way.
ROSE FLANAGAN is director of mailing services at Transcontinental Direct, Warminster, PA.