a practical guide to the 2007 usps rate change - …...a practical guide to the 2007 usps rate...

MAIL SERVICESCUSTOMER STRATEGIES

Overview of changes

Strategies for First-Class Mail®

Strategies for Standard Mail®

Strategies for International Mail

© Copyright 2007 Pitney Bowes Inc. All rights reserved.

A Practical Guide to the 2007 USPS Rate Change

Ways to apply the newrules to your advantage.

Rates effective 5/14/07

IMPORTANT NOTE: On March 19, 2007, the Governors of the U.S. PostalService approved the Opinion and Recommended Decision of the PostalRegulatory Commission in R2006-1. In the Decision the Governorsaccepted the rates “under protest” and asked the Commission to reconsiderits rate recommendations for Standard Mail® flats, the Non-MachinableSurcharge for Single-Piece First-Class Mail® letters and the Priority Mail®

Flat-Rate Box. Because the Governors requested reconsideration of theserate recommendations, future changes in the rates are possible.

A PRACTICAL GUIDE TO THE 2007 USPS RATE CHANGE

When it comes to International Mail Processing and Domestic Presort, no oneprovides more value than Pitney Bowes.

With 34 operating centers in the U.S. alone, Pitney Bowes Mail Services addsefficiency, quality and savings to over 20 billion mailpieces a year. With the mostsophisticated security and mailpiece integrity processes in place, it’s no wonderthat more of the world’s leading corporations and service bureaus rely on PitneyBowes. And now, given the upcoming USPS rate change, companies can count onus for expert advice and money-saving strategies.

DOMESTIC PRESORT LEADERSHIPPitney Bowes PSI creates an environment where every penny counts.

Every year, Pitney Bowes PSI helps companies save millions of dollars on postage.Our unique approach to mail presort services, which includes high-speedautomation, intelligent workflow and high-volume discounts, can help you save upto 25%.

INTERNATIONAL EXPERTISEPitney Bowes IMEX delivers any instrument, to any market, at anytime.With an unrivaled track record in global mail preparation, Pitney Bowes IMEX offersenhanced international mail processing capabilities that can meet virtually anyneed. Our global networks provide you with greater choice, greater control andgreater savings.

For more information, please contact us.

IMEX

A PRACTICAL GUIDE TO THE 2007 USPS RATE CHANGE

Table of Contents

Overview ......................................................................1One-page summary ....................................................2 The role of presort services ......................................3

Go the extra ounce ......................................................4 Convert flats to letter-size mail ..................................5Mail that’s machine-ready ..........................................6Watch your weight ......................................................7Postage Discount Program ........................................8

When Standard Mail makes sense ............................9Convert flats to letter-size mail ..............................10Avoid higher costs for nonmachinable mail ............11

STRATEGIES FOR FIRST-CLASS MAIL®

THE CHANGES

STRATEGIES FOR STANDARD MAIL®

Worldwide savings and efficiencies ........................12

STRATEGIES FOR INTERNATIONAL MAIL


1

A PRACTICAL GUIDE TO THE 2007 USPS RATE CHANGE Ways to apply the new rules to your advantage.

When new USPS rates go into effect May 14, 2007, the average consumer willmerely see this as a two-cent increase in the price of a stamp.

As a business mailer, however, you will need to address significant changes in mailpiece size, classification and rate structures. To assist you, we’ve taken the time toscrutinize these changes and created this step-by-step guide on how to optimizethe new rules to your advantage.

This guide focuses on opportunities where you can mitigate the effect of this rateincrease by making smart decisions. As every mailer is unique, we also encourageyou to review your specific mailstream needs with your Pitney Bowesrepresentative, who may be able to outline additional opportunities.

What is the USPS trying to accomplish?The common thread running through this rate change is simple: the USPS islooking to better align postal rates with the actual costs to process and deliver mailon a piece-by-piece basis. In basic terms, you will be given incentives to:

• Create mailpieces that are compatible with the USPS processing systems • Improve address quality• Deposit letters, flats and parcels closer to their destinations

Through these changes, both you and the USPS will benefit from a more efficientapproach to overall mail preparation and delivery – one that will provide stability,value and added economies well into the future.

Pitney Bowes Mail Services: your resource for innovation and savings.

As the world’s leading provider of mailstream solutions, we understand the criticalrole mail plays in terms of your marketing, operations and financial well-being.Through this guide, we’ll not only inform you of the key changes – we’ll show youhow you can work the new rules to your advantage. With dozens of practicalstrategies, you can choose best practices that make the most sense for yourbusiness.

To make it easy, we have organized this tool into distinct sections, so you canexplore the areas that are most pertinent to your needs without getting boggeddown in unnecessary details. And, of course, your Pitney Bowes representative isalways available to answer your questions, and help you customize an approachthat’s right-sized for you and your company.

Keeping it simple: What you can expect once the newrates take effect.

• Previously, postage costs werebased primarily on weight. The newrate structure puts a greateremphasis on size, shape andweight.

• Lower costs for an “additionalounce” will create newopportunities in many cases.

• The postal service is making a bigpush to decrease Undeliverable asAddressed (UAA) mail and willmake it more affordable for you toupdate addresses.

• Worksharing / presorting remainsthe key to lowering your expenses.

• Permanent, flat-rate pricing forPriority Mail® envelopes and boxesprovides greater value – anywhereand everywhere.

• The increasingly digital nature ofthe mailstream opens new doors ofbarcoding and low-cost deliveryconfirmation services.

For more details, including rate tables, please visit

www.usps.com/ratecase.

2

The current USPS rate change, effective May 14, 2007, will impact all classes of mail.

SIMPLIFYING THE USPS RATE CHANGEA quick one-page overview to the most significant changes.

First-Class Mail®

The shape of the mailpiece will play a larger role in the pricing of First-Class Mail.®Today, letters, flats (large envelopes) and parcels over 1-ounce have the same price atevery weight increment. The new rate design recognizes that each of these shapeshas substantially different processing costs and should have separate prices.

Standard Mail®

Extra Services

The current rate and mail preparation structure for automation letters would notchange. As in First-Class Mail,® Standard Mail® pricing has a greater recognition ofshape and a reduced reliance on weight. In general, Standard Mail® pieces that arenot compatible with USPS processing would be priced higher.

For the most part, the fees for USPS Extra Services, such as Certified MailTM andSignature ConfirmationTM, would increase. Charges for Electronic Return Receipt,however, would be reduced from $1.35 to $0.85.

Priority Mail®, Express Mail® and Package ServicesOne of the major initiatives involves new ways to price light-weight pieces that arelarge in size. This includes the introduction of “dimensional-weight” (or dim-weight) pricing – where the price is based on the size – and “balloon” rates thatwould impose a minimum charge on oversized parcels. Dim-weight pricing wouldapply to Priority Mail®. Balloon rates would apply to both Priority Mail® andPackage Services, such as Parcel Post.

• Letters: A two-cent increase from 39cents to 41 cents for a 1 ounce letter.However, the cost for each additionalounce will be only 17 cents (sevencents less than today).

• Flats: A 28-cent increase from 52cents to 80 cents for a 1 ounce flat,and 17 cents for each additionalounce.

• Parcels: A 61-cent increase from 52cents to $1.13 for a 1 ounce parcel,and 17 cents for each additionalounce.

• Postcards: A two-cent increase from24 cents to 26 cents.

• Workshare Discounts: Significantdiscounts would continue to be

available for those who presort theirmail. Automation rates (which requirea barcode) provide for even greaterdiscounts. However, the best presortrates would be the 5-digit ZIP tier asthe Carrier Route presort categorywould no longer be offered.

• Nonmachinable Formats: A four-cent increase in the nonmachinablesurcharge, from 13 cents to 17 cents.

• Address Correction: A 25-centdecrease for Address CorrectionService from 75 cents to 50 cents forpaper-based notifications. The cost ofelectronic ACS™ notification wouldbe lowered to six cents (down from 21cents today for First-Class Mail®).

• Letters: A 7% to 9% increase in theautomation rates for letter mail up to3.3 ounces.

• Flats: With the emphasis on shape-based pricing, the costs for mailingflats could increase by more than40%.*

• Parcels: In one of the biggestchanges in Standard Mail®, the simpleresidual-shape surcharge would bereplaced by a completely separate

pricing table. Parcel rates wouldincrease by as much as 86%.

• Nonmachinable: Mailpieces that are not compatible with USPStechnology would be assessedsignificantly higher rates. There isalso a new category, Not Flat-Machinable, for mail that is too thickor too rigid to run on flat processingequipment. Priority Mail®:

Flat-Rate Box pricing ($9.15*)becomes a permanent offering. Alongwith the Flat-Rate envelope ($4.60),these allow you to ship up to 70 lb.anywhere in the US for one low price.

Express Mail®:A new 1-lb. rate fills the gap between1/2 lb. and 2 lb.

Letter Dimensions

Flat Dimensions

6 1/8”maximum

height

3 1/2”minimum

height

12”maximum

height

6 1/8”minimum*

height

11 1/2” maximumlength

5”minimumlength

15” maxlength

11 1/2”minimum*length

thickness: 0.007“ minimum, 1/4” maximum

thickness: 3/4” maximum *Flats exceed at least one minimum dimension

Postcard Dimensions

4 1/4”maximum

height

3 1/2”minimum

height

6” maximumlength

5”minimumlength

thickness: 0.007“ minimum, 0.016” maximum

* The Governors of the USPS have requested that the Postal Regulatory Commission reconsider theamount of this increase.

THE ROLE OF PRESORT SERVICES

3

The USPS will implement across-the-board increases in virtually every class ofmail. At the same time, they continue to provide attractive discounts throughtheir presort workshare programs.

Increasing your presort discounts is a sure-fire way to mitigate the impact of thepostal increase. By working with a presort specialist, you can achieve the deepestpresort discounts possible – discounts you could never earn on your own.

The Changes

Mailstream Best PracticesOutsource presort services for maximum savings. Under this rate change, youcan achieve the lowest rates by preparing your mail to meet USPS automationrequirements and sorting your First-Class and Standard Mail® to specific 5-digit ZIPCodes.

Presort experts can take the process out of your hands, apply the latest technology,and eliminate many USPS process steps so that your mail will reach its destinationeven faster than it would if you’d skipped the sorting and paid full freight.

Making it Happen

Choose a presort expert. Pitney Bowes PSI is the premier provider of outsourcedpresort-mail services in the United States. PSI provides the latest technology andinformation-management tools, expedites delivery and increases postage savings toFirst-Class and Standard-Class mailers throughout the country.

PSI delivers by:

• Picking up and transporting your mail to the PSI Operating Center where it ischecked for print quality, weight and proper postage.

• Sorting your mail into zip-code destination sequence and placing in traysbased on USPS specifications and regulations.

• Delivering your mail to the designated postal facility – often bypassing localUSPS offices – and speeding your mail on its way.

With an expert outsourcing solution, you can:

• Gain valuable discounts

• Get your mail delivered as fast, ifnot faster

• Avoid the time and expense ofsorting your mail in house

With PSI, the bottom line isincreased savings and

outstanding delivery. To learnmore, call 1-800-660-6501.

Presort experts add savings –without adding time to delivery process.

Single-Piece Letter $0.39 $0.41

Presorted Letter $0.371 $0.373

Automation Letters $0.326 $0.341

Current New

Mixed AADC Rates

Pitney Bowes makes it easier for companiesto get more out of each communicationthrough mailstream solutions such as:

• Automatic Inserting Solutions

• Document Generation Software

• Digital Mailing Systems

Going the extra ounce may make senseif you:

• Are looking to strengthenrelationships with existingcustomers

• Mail multiple communications tothe same individual

• Would like to sell additionalproducts and services


FIRST-CLASS STRATEGIESA Practical Guide

4

GO THE EXTRA OUNCEWith lower costs for each additional ounce, you can offsetrising costs by putting more into each and everycommunication.

A lower cost for each additional ounce of First-Class Mail®, including letters, flatsand parcels.

The Changes

Smart Mailstream Practices

Additional Ounce $0.24 $0.17

1 ounce Letter $0.39 $0.41



3.5 ounce Letter $1.11 $0.92

Current New

First-Class Letters – Single Piece Rates

Under the USPS rate change, companies who already send a high volume of two-and three-ounce letters may actually experience a decrease in overall postageexpenses. Others should consider whether they can increase bottom-line profits byadding additional content to existing mail.

• Use your transactional mail for marketing purposes. You can promoteother products and services by adding inserts, brochures and cross-sellmaterials to statements and invoices.

• Increase the number of inserts. If you are already including inserts, it maybe cost effective to add even more. Depending on the size and weight of eachinsert, you may be able to add up to six or more new components per ounce.

• Combine multiple communications into one envelope. If you are planningto send a notification or reminder to your customers, you could save moneyby combining this communication with another mailing, such as a statement.Likewise, if you have customers who currently receive two or more statementseach month, consolidating these into a single envelope (a practice known ashouseholding) can reduce your expenses dramatically.

Overall, the decrease in the additional ounce rate makes it possible for you to savemoney by sending fewer, but more valuable, mail pieces. But be careful – once youexceed the 3.5 ounce threshold for letter mail, your piece will be classified as a flat,which will increase your costs.

Making it Happen

Going the extra ounce means more than stuffing envelopes – it means adding speedand intelligence to your mailstream.

Intelligent Inserting. Having the ability to selectively insert allows you to choosewhich customers receive which components, giving you the control and flexibilityyou need to target messages to the right person. You can even print and scan marksthat include specific processing instructions for each mail piece. OMR (OpticalMark Recognition) helps ensure accuracy and mail piece integrity. By automatingand integrating the entire process of mail creation, from document generationthrough folding and inserting, you can gain end-to-end efficiencies.

Document Enhancement. Combining seemingly disparate communicationsrequires some planning, but may be easier than you think. Printstream engineeringgives you the flexibility to modify and combine the print-ready files created by yourexisting applications – without disrupting your underlying operations or mission-critical systems.

Accurate Weights, Lower Postage. There’s no need to sort your mail by weightbefore you apply postage, as today’s leading mail systems can automatically weighand rate each mail piece on the fly, so you won’t overpay for postage.

Letter Dimensions

Flat Dimensions

Pitney Bowes makes it easier forcompanies to optimize their mailstream,with solutions including:


• Mail Folding Systems




6 1/8”maximum

height

3 1/2”minimum

height

12”maximum

height

6 1/8”minimum*

height


5”minimumlength

15” maxlength

11 1/2”minimum*length

thickness: 0.007“ minimum, 1/4” maximum maximum weight = 3.5 oz.

thickness: 3/4” maximum *Flats exceed at least one minimum dimension

5

FLATS TO FOLDEDBy converting flats into letter-size mail, you can takeadvantage of lower postal rates.

With the emphasis on shape-based pricing, the cost for flats will increase muchmore than the cost for letter-size mail – with some weights increasing by morethan 50%.

Previously the cost for flats and letter-size mail over 1 ounce was the same. Underthe new plan, flats would cost $0.39 more per piece, regardless of weight.

The Changes


1 ounce Flat $0.52 $0.80

2 ounce Flat $0.63 $0.97

3 ounce Flat $0.87 $1.14

Additional Ounce $0.24 $0.17

Current New

First-Class Flats – Single Piece Rates

By having a good understanding of what constitutes a letter vs. a flat, you can takesteps to create mail pieces that are easier for the post office to process.

• Design mailpieces to meet letter-size dimensional requirements. Whilemany letters are already created to fit inside a standard #10 envelope, youactually have a lot of flexibility to create mailings of different sizes – and stillqualify for the lower letter-size rates.

• Convert flat mail to letter-size mail (up to and including 3.5 ounces) witha single fold. The concept of “flats to folded” is important if your currentmailings are between one and 22 pages. (Higher page counts are unlikely toqualify for letter-mail rates as the weight will likely exceed the 3.5 ouncelimit.) In simplest terms, converting flat mail to letter-size mail would be oneof the easiest ways to cut costs and mitigate the rate increase.

• Repackage parcels as flats. Under the new rates, the cost for a 1-ounceparcel would more than double. However, a flat-size mailpiece could be up to3/4 inches thick – which may make it possible for you to repackage mailingsthat you currently send as parcels to meet the flat-rate requirements.

Making it Happen

The rate change creates many opportunities for savings through proper mailpieceplanning.

Precision Folding. If you’re looking for a quick ROI fix, a heavy-duty foldercombined with an intelligent inserting system can provide you with the high-speed,automatic feeding and folding required to transform documents into a sizeappropriate for a 6” x 9” letter – all with a single fold. Not only will you save onpostage, you’ll increase speed and productivity across your entire operation.

Automatic Rating. Mailing systems with dynamic weighing and postage rating byshape technology maximize efficiency by processing mixed weight material up to 16 oz. in a single operation. Each piece is automatically weighed and measured,ensuring an accurate postage calculation.

Pitney Bowes makes it easier forcompanies to create USPS compliantmail with mailstream solutions such as:

• Automatic Single Tabber

• High Speed Laser Printer





Letter Dimensions

6 1/8”maximum

height

3 1/2”minimum

height


5”minimumlength


6

MAIL THAT’S MACHINE-READYAn increase in the nonmachinable surcharge adds to coston nonmachinable mail.

The “nonmachinable surcharge” – which is assessed when letters are designed inways that make it difficult to process – increases from 13 cents to 17 cents.

The Changes

Smart Mailstream PracticesBy knowing the guidelines, you can design mailpieces to meet letter-sizedimensional requirements and avoid nonmachinable characteristics.

A letter-size piece is considered nonmachinable if it has one or more of thefollowing characteristics:

• Weighs more than 3.5 ounces• Has an aspect ratio (length divided by height) of less than 1.3 or more

than 2.5• Measures more than 4.25 inches high or 6 inches long, and has a thickness

of less than 0.009 inch• Is rigid or contains odd-shaped contents • Is polybagged, polywrapped, or enclosed in any plastic material• Includes clasps, strings, buttons, or similar closure devices• Is a self-mailer with a folded edge perpendicular to the address and is not

folded and secured (e.g., tabbed)

Making it Happen

When you have an unusual mailpiece, take a moment to determine whether it meetsthe machinable requirements. And if not, what you can do differently to meet theletter-requirements. Whoever is designing your mailpieces and marketingpromotions should also be brought up to speed on these guidelines. Some mailcreation tools which can help include:

Duplex printing. If your mailpieces are over 3.5 ounces, you should considerduplex (two-sided) printing. That will help you save on paper costs, as well.

Tabbers. If you send self-mailers, newsletters, catalogs or flyers, you may want toconsider a tabber, which applies the wafer seals needed to secure your mailpiece.

Inserters and Folders. These automation tools give you the flexibility you need to produce a broad range of effective mail formats.

7

WATCH YOUR WEIGHTAvoid more costly flat-rate pricing by keeping your letter-size mailpieces to 3.5 ounces or less.



As the USPS works to better align their rates with actual processing costs, they willcharge flat-size prices for letter-size mailpieces that exceed 3.5 ounces in weight.

The Changes

Smart Mailstream PracticesBy carefully managing the make-up of your mailpieces, you can maximize impactwhile keeping your mailpiece weight in letter-size range.

• Design mailpieces to meet letter-size dimensions. To qualify as “letter-size”,your mailing doesn’t have to fit into a standard #10 envelope – but it doeshave to comply with USPS standards for letter-size mail. You have a lot offlexibility to create mailings that can stand out while staying within “letter-size” specifications.

• Use your weight wisely. You can say a lot in 3.5 ounces. Duplex printing,lighter paper stock, smaller inserts – all of these can help you keep yourcontent intact while trimming the weight of your mailpiece overall. Make surethat you include all the elements when you weigh in.

• Prioritize your messaging. If you’re still over the weight limit, take a goodlook at your mailpiece contents. When extra inserts put you over 3.5 ounces,you need to do a quick cost-benefit analysis: does it make more sense toinclude the inserts now, to push them back to a later date, or even to leavethem out altogether? Make sure they’re worth the added expense.

Making it Happen

Duplex printing. Duplex or two-sided printing can enable you to reduce mailpieceweight – and reduce paper costs as well. It’s environmentally friendly and commonlyused in today’s cost-conscious world.

Document Enhancement. Modifying and combining the print-ready files createdby your existing applications may sound like a daunting task. But new technologiesmake it simple to change document sizes with minimal disruptions to yourunderlying operations and mission-critical systems. Be sure to check with yourmailstream expert to see how easy the change can be.

Pitney Bowes makes it easier forcompanies to create powerful, cost-effective mailpieces.

• Document generation software

• Digital mailing systems


Letter Dimensions

6 1/8”maximum

height

3 1/2”minimum

height


5”minimumlength


3.0 ounces $0.757 $0.61

3.5 ounces $0.994 $0.735

4.0 ounces $0.994 $1.196

Current New

First-Class Letters – Automation Rates

Mixed AADC Rate

To learn more about what mail can qualify for this program,

please contact us or call 866-MAIL-PBI (1-866-624-5724).

8

THE PITNEY BOWES POSTAGEDISCOUNT PROGRAMMailers can save nearly 9% on the cost of mailing by taking advantage of the Pitney Bowes Postage Discount Program.

Across the board, there are increases in the cost of postage for virtually every classof mail. The overall 7.6% rate increase will bring the full cost of First-Class Mail®

postage up to 41 cents for a one-ounce letter.

The Changes

Smart Mailstream PracticesIf you’re a high-volume mailer, you can save money by presorting your mail. But ifpresorting mail in-house doesn’t make sense to you, you can still get the benefit ofpresorting – including reduced postage rates – without doing the work.

The Postage Discount Program. Under this program, Pitney Bowes will pick upoutgoing mail directly from your office. Your mail will be commingled and presortedwith mail from other companies, and then sent out the next day. Best of all, you canmeter your mail at a lower rate, which saves you money.

The service also includes automatic address verification and automatic move updateservices at no cost to you. Depending on your mail volume, the Postage DiscountProgram could help you save thousands of dollars with no work required.

Making it HappenCustomers who will benefit from and qualify for the Postage Discount Program:

• Mailers with a minimum of 1,000 pieces of qualifying mail per scheduledpickup,

OR

• Mailers with a minimum of 500 pieces of qualifying mail every day

• Mailers must be located in an eligible PDP location





3.5 ounce Letter $1.11 $0.92

Current New

First-Class Letters – Single Piece Rates

Pitney Bowes makes it easier for you totake advantage of Standard Mail® savingswith a broad range of mailstream solutions:

• Address Printers

• SmartMailer™ Mail ManagementSoftware

• AddressRight® Pro




• Postage Discount Program


STANDARD MAIL STRATEGIESA Practical Guide

9

THE ECONOMY CLASS: WHENSTANDARD MAIL® MAKES SENSEWith one low price for up to 3.3 ounces, switching to StandardMail could make good economic sense in certain situations.

While Standard Mail® postage rates will increase, these rates are much lower thanFirst-Class Mail® rates, especially for higher-weight mailpieces.

The Changes


1 ounce Single Piece $0.41 n/a

1 ounce Presorted* $0.373 $0.246

1 ounce AADC Automation $0.341 $0.238

3 ounce Single Piece $0.75 n/a

3 ounce Presorted* $0.713 $0.246

3 ounce AADC Automation $0.591 $0.238

First-ClassNew Letter Rates

Every time you have a mailing of 200 pieces or more, (or total weight of the mailequaling 50 lb. or more) it makes sense to carefully consider which class is best.

When to mail First-Class Mail:

Some materials must be mailed First-Class Mail®:• Handwritten or typewritten materials• Bills, statements of account and invoices• Personal correspondence

When time is of the essence:• First-Class Mail® will reach most domestic destinations in 2-3 business days• However, there are ways to speed up the process of Standard Mail® – such

as making sure your mail is automation-compatible and dated with a meterindicia

When you do not have the ability to presort your mail:• Sending fewer than 200 pieces or less than 50 lb.• Do not currently have easy-to-use presort software

When to mail as Standard Mail:

You may want to consider Standard Mail® rates for all other mail options,particularly when your marketing mail, newsletters or other masscommunications are over one ounce.

• The minimum mail quantity is 200 pieces (or mailing equal to 50 or more pounds)

• The per-piece rate for Standard Mail® is good for mail up to 3.3 ounces

Making it Happen

Presort Software. The biggest challenge of Standard Mail® is that you have topresort your mail. And while the presort rules are complex, a good softwareapplication can do almost all of the work for you, including the preparation of anyUSPS required forms. When considering options, look for software that is CASSCertifiedTM (this is the USPS Coding Accuracy Support System) and PAVETM (thisstands for Presort Accuracy Validation and Evaluation) so you can benefit frombetter addresses, more accurate presorts and greater discounts.

Maintain Your Image. Saving money is smart, and you can look good too. Printingyour postage indicia with a meter vs. a permit is the first step to a professional look.Plus, high-quality address printers provide crisp, precise, direct-to-envelope imagingand some even allow you to add spot color and personalized messages, which canhelp ensure more of your mail is opened and read.

High-speed processing. Producing high-volume mail in-house may be easier than you think. Mailstream automation solutions, including document folders and inserters, give you the flexibility you need to produce a broad range of effective mail formats.

Standard

*Machinable

Letter Dimensions

Pitney Bowes makes it easier forcompanies to optimize their mailstream,with solutions including:






6 1/8”maximum

height

3 1/2”minimum

height


5”minimumlength


10

FLATS TO FOLDEDBy converting flats to letter-size mail, you can takeadvantage of lower rates.

With the emphasis on shape-based-pricing, the cost for Standard Mail® flatswill increase much more than the cost for letter-size mail. Depending on thetypes of presort you do, you could be facing an increase of more than 40%on flats.

.

The Changes


Machinable –Mixed AADC/ADC $0.255 $0.515

Automation–Mixed AADC/ADC $0.252 $0.477

Automation – 3-digit/scheme $0.233 $0.392

Letters FlatsNew Rates

Standard Mail – Letters vs. Flats

By having a good understanding of what constitutes a letter vs. a flat, you cantake steps to create mail pieces that are easier for the post office to deliver.

• Design mailpieces to meet letter-size dimensional requirements. Whilemany letters are already created to fit inside a standard #10 envelope, youactually have a lot of flexibility to create mailings of different sizes – andstill qualify for the lower letter-size rates.

• Convert flat mail to letter-sized mail with a single fold. The concept of“flats to folded” is important if your current mailings weigh less than orequal to 3.3 ounces. (Over 3.3 ounces, postage is based on the same pieceand pound rate for both letters and flats.) In simplest terms, converting flatmail to letter-size mail is one of the easiest ways to cut costs and mitigatethe rate increase. For example, documents that currently measure 8 1/2” x 11” can be folded once to fit into a 6” x 9” envelope, or twice to fit into a #10 window envelope, which will allow you to qualify forsignificantly lower rates.

Making it Happen

The rate change creates many opportunities for savings through proper mailpieceplanning.

Precision Folding. If you’re looking for a quick way to save postage, a heavy-dutyfolder combined with an intelligent inserting system can provide you with the high-speed, automatic feeding and folding required to transform documents into a sizeappropriate for a letter rate. For many documents, one fold will get you into a 6” x 9” envelope, two folds for a standard #10. Not only will you save on postage,you’ll increase speed and productivity across your entire operation.

Automatic Rating. Mailing systems with dynamic weighing and postage rating byshape technology maximize efficiency by processing mixed weight material up to 16 oz. in a single operation. Each piece is automatically weighed and measured,ensuring an accurate postal calculation.

NOTE: The Governors of the USPS have requested that the Postal Regulatory Commissionreconsider the amount of this increase.

Pitney Bowes makes it easier forcompanies to create USPS compliantmail with mailstream solutions such as:

• High Speed Laser Printer




11

AVOID HIGHER COSTS FOR NONMACHINABLE MAILTaking the time to ensure your mail is machinable could cutyour postage costs in half.

Creating mail that is easier for the USPS to process will be even more importantunder this rate change. Nonmachinable letter rates will increase dramatically.But the biggest change is the creation of an entirely new category – Not Flat-Machinable – which would be assessed on mail that’s too thick or too rigid formachine-processing.

The Changes

Smart Mailstream PracticesBy knowing the guidelines, you can design mailpieces to avoid the Not Flat-Machinable category, which will apply to:

• Mail that is too thick or too rigid to run on the USPS processor• Mailpieces smaller than 5” x 6” and thicker than 1/4” (up to 1 1/4”)• Mailpieces longer than 15” (up to 15 3/4”)• Mailpieces thicker than 3/4” (up to 1 1/4”)

Making it Happen

When you have an unusual mailpiece, particularly one that is rigid, take a momentto determine whether it meets the machinable requirements – and if not, what youcan do differently. Whoever is designing your mailpieces and marketing promotionsshould also be brought up to speed on these guidelines.

Adjust Packaging. It may be possible for you to modify your envelope or mail kit toconform to the guidelines. You may also want to rethink what you are sending. Forexample, if you currently include pens or key chains in envelopes as a promotionalitem, perhaps you could find an alternative premium that is more mail-friendly.

Duplex Printing. If your mailpieces are thicker than 3/4”, you should considerduplex (two-sided) printing. That will help you save on paper costs, as well.

Automated Folding and Inserting. These automation tools give you the flexibilityyou need to produce a broad range of effective mail formats.

IMPORTANT: If mailpieces are not uniformin thickness, you won’t even qualify forthe Not Flat-Machinable rate as suchmailpieces will be classified as parcelsand charged a higher rate.


Mixed ADC $0.316 $0.477 $1.028

3-digit $0.275 $0.392 $0.506

Higher cost of Not Flat-Machinable (NFM)

For pieces 3.3 ounces or less.

CurrentAutomation

NewAutomation

NewNFM

INTERNATIONAL MAILAlternative services and professional insights can help you deal with changes to international mailing rates and structures.

The new rates provide for the restructuring of a number of services, including theelimination of USPS international surface mail. Postal rate increases on a varietyof services would range from 9% to 15% or even higher.

The Changes


• Understand your International postal and carrier expenses. Given thecomplexity of International mail – with rates based on multiple factorsincluding zones, pieces and pounds – each company needs to model the rateincreases against their unique mailstream characteristics.

• Rate-Change Impact Analysis. The USPS is not just implementing a rateincrease – certain services will be discontinued and others consolidated.Experts in International Mail processing can pinpoint where these changeswill have the biggest impact on your business – and help you identifyopportunities to save.

• Mail Consolidation Partner. Processing your International mail and parcelsthrough a USPS Postal Qualified Wholesaler can provide economies of scalethat can help you offset the rate increase. Work with a partner who also hasdeveloped independent networks, which provide for alternatives to USPSsurface delivery.

Making it Happen

International Mail Services. Pitney Bowes IMEX specializes in the distribution ofmail throughout the world in partnership with the United States Postal Service,International Postal Administrations, and Private and Public Mail DistributionAgencies. With such strong and well-founded relationships, we can help clientsleverage the latest processing technologies, volume discounts and enhanced globalmail services.

Pitney Bowes IMEX advantages include:

• Insights from the global leader in mailstream processing• Proprietary delivery networks• More cost-effective routing, including volume discounts• Strategically located processing facilities at USPS gateways• Enhanced online tracking and reporting• Heightened mail security procedures• Business recovery and continuity

Three strategically located processingcenters provide IMEX clients with a securegateway to the international mailstream.

To learn more, contact Pitney Bowes IMEX at

1-800-521-0080.

INTERNATIONAL MAILSTRATEGIES

A Practical Guide

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a practical guide to the 2007 usps rate change - …...a practical guide to the 2007 usps rate...

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