Proposed Postal Changes Sneaking Up
 By B.J. Addington

The most significant overhaul of U.S. postage rates in years could take place in May 2007, just two months from now.

If this is news to you and your small business, don’t feel alone.

Pitney Bowes Inc., headquartered in Stamford, Conn., reports that a recent survey of more than 500 business executives nationwide indicated that 79 percent of respondents were unaware of the forecasted changes in postal rates and regulations.

That means that roughly four out of five executives are unprepared for proposed price and rules changes that are destined to have a big impact on their business operations and marketing strategies.

“The anticipated overhaul of postal rates and rules has serious implications for business,” says Murray Martin, president and chief operating officer of Pitney Bowes Inc. “Smart companies are already planning ways to reengineer their mailstream to make it less costly and far more effective than it has been in the past.”

Don’t let the proposed postage changes catch you flat-footed. Here’s what you need to know so your small business can find ways to apply the proposed rules to your advantage.

The Proposed Postage Changes
The proposed overall 8.4 percent rate increase would bring the full cost of first class postage up to 42 cents from the current 39 cents.

But that’s just the tip of the sweeping changes to the 4,400 different postal rates now under consideration by the U.S. Postal Regulatory Commission.

Other proposed major changes include the introduction of shape-based pricing and, in a related development, new rules for address quality that will take effect as early as this summer.

“No one likes to see postage rate increases,” Martin says, “but the proposed price changes are a good opportunity to take a fresh look at the entire mailstream process within an organization. For most companies, there are untapped opportunities to minimize the costs and maximize the effectiveness of every communication with customers.”

Martin cites four simple steps that most companies can take to adjust to the proposed postal rates and rules.

1. Plan Your Mail Piece
The expected rates would create an opportunity for savings through proper mailpiece planning.

For example, as proposed, the second ounce of a first-class letter will be less expensive than the first ounce, so mailers who combine information from two different mailings into a single mail piece can save money.

2. Pay Attention To Shape
The anticipated rates would give mailers a strong financial incentive to switch from flat 9x12-inch envelopes to standard #10 envelopes, reflecting the U.S. Postal Service’s lower costs for processing the smaller envelopes.

Folding and inserting machines to capitalize on this incentive will make sense for more businesses under the proposed new rules. Parcels are similarly affected by shape-based pricing and create additional opportunities to save through proper planning.

3. Capitalize On Discounts
Presorting the mail before it enters the U.S. Postal Service network can result in double-digit percentage discounts.

Partnering with a high-quality mailing presorter can help you capture the lion’s share of this great incentive. For companies that want to keep this task in-house, a number of excellent software programs can presort mail in the production process.

4. Cleanse Addresses
The U.S. Postal Service estimates it spends nearly $2 billion each year handling mail that can’t be delivered as addressed. In an effort to cut this cost in half by 2010, the Postal Service will become much more stringent on discounts traditionally offered to mailers that do not maintain the accuracy of their address lists.

In addition to the proposed new rates, the Postal Service has announced new rules, set to take effect this summer, that make address quality more imperative than ever, and should encourage more mailers to incorporate address quality software and processes into their mailing operations.

(Posted March 2007)

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