January 2016 USPS® Rates Increase- What You Need To Know

Speaker: Adam LewenbergPresident of Postal Advocate Inc.

Meeting Instructions• There is a joinme webinar presentation link • All lines are on mute until the end of the meeting when they will be opened

up for questions.• Type questions into the chat box as they come up and we will do our best to

answer them.• If you have issues hearing the webinar, make sure you have called into the

meeting vs. relying on internet audio. Dial-in +1.781.666.2350 Access Code 813-677-689#

• If you are having issues seeing the webinar, try entering the meeting link again and joining through the browser (Vs. downloading software).

• We will be sending a copy of the presentation out after the meeting or you can find it on our website under FAQs/Resources

• If you have any issues during the meeting contact Doris Tam at 888-977-6245 x512 or email me at doris.tam@postaladvocate.com and I’ll be happy to assist

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Adam Lewenberg - Background and Experience

• President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada– Manage a portfolio of 58,000 pieces of mailing equipment for the largest

US companies.– Speak and teach nationally on mail savings and industry trends.

• Industry Co Chair- Boston Postal Customer Council/Mail Systems Management Association member. 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.

• Not affiliated with any mailing vendor - Unbiased advice.

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January 2016 USPS® Rates Increase- What You Need To Know

Speaker: Adam LewenbergPresident of Postal Advocate Inc.

What We’ll Cover:

• The good news and the bad news• How to budget for the increase• Savings Tips

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New rates take into effect Sunday January 17, 2016

The Good News

• The following mail classes are not increasing: (Market Dominant Mail Classes)

– First-Class® Mail Letter and Flat– Standard Mail – International Letter and Flat rates– Media Mail, Library Mail and Bound Printed Matter– Special Services

• These are the main mail classes used by businesses

• There is a potential for a rate decrease later this year (Based on the Exigent 4.3% increase in 2014)

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Common Mailings not impacted by increase:• Invoices• Statements• Checks• Marketing• Day to Day

correspondence

The Bad News - 9.5% Overall Increase

• The following mail classes are increasing: Competitive Mail Classes– Priority Mail® - 9.8%– Priority Mail® Express – 15.6%– First Class Package Service – 12.8%– Retail Ground (Formally Standard Post) – 10%– Parcel Select Ground (Formally Parcel Select) – 3.1%– First-Class Package International Service – 21.6%– Priority Mail International – 10.2%– Priority Mail Express International – 11.6%

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Potential Reasons for the Package/Expedited Increases• For lightweight packages going to consumers (vs. businesses) the USPS has

significantly lower rates than the private carriers when factoring fees.

• In a recent filling to the Postal Regulatory Commission, UPS® made a complaint that the USPS was undergoing anticompetitive policies and claimed: “In turn, the larger market share enables the utility to better leverage economies of scale and scope, increasing its scale and further harming its now handicapped rivals,”

• The private carriers typically increase rates at around 5% per year.

• This is their fastest growing segment and they need it to cover volume declines in other areas. (Example: Letters and Flats)

• They are the only service delivering to every door every day. Private carriers are using them at times to deliver the last mile.

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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– Priority Mail® Express – 5,000

packages per year across facilities.

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Priority Mail®

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Most popular USPS package service13 ounce to 70LB items 1-3 day delivery8 primary zones based on distance.

Highlights• 9.8% overall increase.• Largest increase in 1-5LB where they have the lowest prices.• Heavier items having small to no increase.• Commercial Plus customers seeing the largest increases.• Flat Rate Envelopes and Small Boxes having the largest increases.• Sorry Guam – Zone 9 increasing the most at 20-50%• USPS Click and Ship now defaults to Retail (Vs. Commercial) rates.

Weight LB'sPrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % Change1 $5.75-7.15 $6.45-7.85 10-15% $5.05-6.51 $5.75-7.16 10-14% $4.95-6.25 $5.60-6.95 8-13%5 $8.95-21.55 $9.85-23.15 5-10% $6.78-18.87 $7.39-19.81 0-9% $5.35-18.30 $7.17-19.22 3-38%

10 $12.15-37.10 $12.65-38.60 4% $8.28-32.95 $8.69-34.60 0-7% $5.60-31.73 $8.43-33.56 4-51%25 $22.2-67.7 $22.55-70.4 0-4% $17.76-58.64 $17.76-61.57 0-5% $11.16-47.54 $17.23-86.74 18-59%50 $31.3-105.50 $32.55-109.7 4% $25.96-91.34 $25.96-95.91 0-5% $24.96-90.52 $25.18-93.03 1-20%

Flat Rate Envelopes $5.75 $6.45 12% $5.05 $5.75 14% $4.95 $5.60 13%Small Flat Rate Box $5.95 $6.80 14% $5.25 $6.10 16% $5.20 $5.90 13%

Medium Flat Rate Boxes $12.65 $13.45 6% $11.30 $11.95 6% $10.65 $11.60 9%Large Flat Rate Boxes $17.90 $18.75 5% $15.80 $16.35 3% $14.80 $15.85 7%

USPS Priority Mail®Retail Commercial Base Commercial Plus

First-Class Mail® Parcels

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Best Savings OpportunityLess than 1 LB parcels where USPS holds a Monopoly (Private carriers start at 1LB)1-3 day delivery

Highlights• 12.8% overall increase.• Retail rates remain unchanged.• Commercial Base rates see increases up to 69% (Light weight items)• Elimination of presort discounts.• Commercial Plus rates eliminated.• Slight reductions for 13 ounce items.• New rates go to 15.99 ounces vs. 13 ounces in the past. This is a

new savings opportunity because items would have defaulted to Priority Mail®.

Weight OuncesPrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % Change3 $2.54 $2.54 0% $1.54-2.04 $2.60 27-69% N/A N/A6 $3.14 $3.14 0% $1.85-2.35 $2.60 11-41% $3.37-4.05 N/A

10 $3.94 $3.94 0% $2.57-3.07 $3.35 9-30% $3.37-4.05 N/A13 $4.54 $4.54 0% $3.11-3.63 $3.50 (-4-13%) $3.37-4.05 N/A

15.999 N/A N/A 0% N/A $3.65 New $3.37-4.05 N/A

Retail Commercial Base Commercial PlusUSPS First-Class Mail® Parcel and Package Rates

Priority Mail® Express

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Up to 70LB items 1 day Guaranteed Delivery8 primary zones based on distance.

Highlights• 15.6% overall increase.• Minimal Retail increase and only on light weight local zones.• Huge increase on Commercial Base and Plus with the largest hit on closer

zones. • Flat rate envelopes see 14-39% increase.• Elimination of Flat Rate Box

Weight LB'sPrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % ChangePrior to Jan 17,

2016January 17,

2016 % Change1 $17.95-36.20 $22.95-36.6 0-28% $15.13-30 $20.66-32.94 10-37% $11.94-22.37 $20.66-28.08 39-73%5 $24-57.55 $24-57.55 0% $16.65-39.87 $21.6-51.80 20-43% $15.07-39.33 $21.6-51.8 21-45%

10 $36.15-84.85 $36.15-84.85 0% $20.26-63.24 $32.54-76.37 21-61% $19.59-62.28 $32.54-76.37 33-66%25 $65.95-147.75 $565.95-147.75 0% $33.99-127.57 $59.36-132.98 4-75% $33.14-124.02 $59.37-132.98 7-89%50 $116.85-273.25 $116.85-273.25 0% $56.87-239.40 $105.17-245.93 3-94% $55.73-229.88 $105.17-245.93 7-102%

Flat Rate Envelopes $19.99 $22.95 15% $18.11 $20.66 14% $14.85 $20.66 39%Flat Rate Box $44.95 n/a $44.95 n/a $44.95 n/a

USPS Priority Mail® ExpressRetail Commercial Base Commercial Plus

Savings Strategies 1. Move to Commercial Rates• Huge discounts over retail rates.• Free tracking on usps.com.• Need to process through a PC Postage solution to get the discounts.• Multiple vendor options to process packages – Some are free or very low cost.• Requires the operator to enter the address and submit to the USPS electronically

and create a shipping label vs. meter tape.• If you are doing large volumes (50,000 per year) reach out to the USPS about

Commercial Plus discounts.• 13-16 ounce can now be converted to First-Class® Parcel for $3.63 or less!

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Retail Commercial Base Commercial Plus

Weight LB'sJanuary 17,

2016 January 17, 2016 % Savings January 17, 2016% Savings (Over Commercial Base)

1 $6.45-7.85 $5.75-7.16 9-11% $5.60-6.95 3%5 $9.85-23.15 $7.39-19.81 14-34% $7.17-19.22 3%

10 $12.65-38.60 $8.69-34.60 10-41% $8.43-33.56 3%25 $22.55-70.4 $17.76-61.57 13-32% $17.23-86.74 3%50 $32.55-109.7 $25.96-95.91 13-20% $25.18-93.03 3%

Flat Rate Envelopes $6.45 $5.75 11% $5.60 3%Small Flat Rate Box $6.80 $6.10 10% $5.90 3%

Medium Flat Rate Boxes $13.45 $11.95 11% $11.60 3%Large Flat Rate Boxes $18.75 $16.35 13% $15.85 3%

USPS Priority Mail®

Savings Strategies2. Compare Rates with the Private Carriers - For every packageBenefits to USPS• Don’t charge extra fees for:

– Fuel surcharge– Residential, DAS Surcharges– Saturday Delivery– Address Correction Fees

• Best rates for lightweight items to residences (Less than 5 LB’s)

• First Class Parcel rates for items less than 16 ounces. ($2.60-3.63 per item!)

• Free boxes

Benefits UPS & FedEx*• Negotiate rates based on volumes. • Guaranteed delivery with refunds.• Ground service with 1-5 day

guaranty(Many areas are 1-3 days).

• Dedicated account managers.• Typically have the best rates items

over 5LB’s or lighter weights going to businesses.

*Assumes that you have a corporate agreement.

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Multi Carrier options:1. Manually compare between systems.2. Cloud based multi carrier systems – simple to complex.3. PC/Server based multi carrier systems.

How To Budget For This Increase1. Enter last years spend.2. Estimate % based on type of mail.Below is an example on how to set this up.

Tip: If you are seeing your mix of mail having a higher percentage increase, edit this on the template.

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% of Mail Spend Amount % Increase

2016 Budget Amount

2015 USPS Mail Spend $100,000

% of Spent for Letters/Flats 80% $80,000 0% $80,000

% Spent for Packages/Expedited 20% $20,000 9.5% $21,900.00

2016 USPS Mail Spend $101,900

Helping multi-locationorganizations streamline

their mailing costs

58,000 pieces ofequipment, managed

by Postal Advocate

Recovered over$2,000,000

in lost postage, vendorovercharges and fees

ENTERPRISE-WIDE MAIL AUDIT AND RECOVERY

OVER $20,000,000 IN CLIENT SAVINGS

$559K57%

Average ClientSavings

Average EquipmentSavings

HOW WE DO IT• 200 + 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 AgencyAgreement/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, billingand vendor compliance.

Provide enterprise visibility of all spend, costs and

documented savings through enterpriseAdvocate.

Provide client log-in.

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3

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HOW ITWORKS

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 sites -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

Contact info: (20pt)

January 15, 2016 18

Questions?

Contact: Adam Lewenberg - President888-977-MAIL X 501adam.lewenberg@postaladvocate.com

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