Re-engineering the Mailstream

In August, printing businesses will face the most comprehensive overhaul of postal regulations in history, when the R2006-1 Rate Case will restructure postal rates to more closely reflect processing and delivery costs.

The average rate increases of approximately 9% that the U.S. Postal Service is stating for each mail class can be misleading. That's because the changes in presort-rate categories make direct comparisons between old and new rates impossible in some cases. The real increases faced by many printer/mailers may be far greater than the average.

The most significant new regulation is that the shape of the mail piece will determine postage rates. Parcels are the most expensive to process and will cost the customer a lot more to mail. Flats are more expensive to process than letters, and the new rates reflect this as well.

In many cases, changing production or preparation methods can minimize postage costs. For example, First Class flats weighing less than 3.3 oz. can be folded in half and mailed as letters if the thickness does not exceed 0.25´´—resulting in significant postage savings. In other cases, costs can be minimized by redesigning the materials to be mailed.

Consider printed checks mailed in boxes via First Class Mail. Under the new rates, it will cost as much as $3.127 to mail each box, a considerable increase over today's postage cost. One option is a switch to Standard Class mail, accepting slower delivery service to offset the cost increase.

Another approach could be to redesign the product as a flat. Six personal checkbooks could be bound and inserted in a 9.5×12.5´´ envelope that, mailed as a flat, would save as much as 29.4¢ per piece. Customers could peel checkbooks off adhesive backing paper as they are needed.

Certainly, investment would be required to change the way checks, or other materials, are packaged. But, in many cases, this investment could be quickly recouped in postage savings.

The rate case is not the only reason you may need to consider imaginative redesign of some products. Mailers of flats, including publications, will soon be required to change the location and orientation of address placement to meet the requirements of the USPS's new Flat Sequencing System. Addresses will have to be placed perpendicular to the longest side and closest to an end of the flat. Magazine publishers face big challenges because the new address location occupies a prominent place on the front or rear cover.

Also, the USPS estimates it spends nearly $2 billion each year handling mail that cannot be delivered as addressed. In an effort to cut this cost in half by 2010, the USPS will withhold discounts to mailers who do not maintain the accuracy of their address lists, making address quality more imperative than ever. These regulations should encourage more mailers to incorporate address-quality software and processes into their mailing operations.

[Editor's Note: Next month's MailCenter will focus on Undeliverable As Addressed mail.]