NEW PRICING SPECIAL EDITION: ALSO IN THIS ISSUE: FREQUENTLY ASKED QUESTIONS RATEFOLD INFORMATION FOREVER STAMP

Transcription

1 UNITED STATES POSTAL SERVICE VOLUME 1 NUMBER 2 MARCH/APRIL 2007 SPECIAL EDITION: NEW PRICING ALSO IN THIS ISSUE: FREQUENTLY ASKED QUESTIONS RATEFOLD INFORMATION FOREVER STAMP

2 New Domestic and International Prices The Governors of the U.S. Postal Service voted March 19 to accept the Postal Regulatory Commission's (PRC) recommendation to increase domestic postage rates and fees. The price changes will happen May 14. International Mail categories and postage rates and fees are changing at the same time new domestic postage rates and fees are implemented. A description and highlights of the International Mail changes begin on page 13. The domestic price changes call for a 2-cent increase in the price of a First-Class Mail stamp and introduce the 41-cent Forever Stamp. After its initial release, the Forever Stamp will be sold at the First- Class Mail single-piece 1-ounce letter rate in effect on the day of purchase. The postage value of a Forever Stamp will always be the First-Class Mail single-piece 1-ounce letter rate in effect on the day of use. Additional postage would have to be affixed to letters weighing more than 1 ounce, letters subject to the nonmachinable surcharge, or mailpieces subject to another rate of postage (e.g., large envelopes or packages). The new prices reflect changes in operations and the marketplace and will enhance efficiency, offer more choices and make sure all types of mail cover their costs. We include incentives to create mailpieces compatible with our processing systems and to deposit flats and parcels closer to where they are delivered. One of the overriding principles in the new price structure is that shape matters. It s important to us because the cost of handling each mail shape letters, large envelopes (flats) and packages varies widely. Shape is also important to you because it affects how you position your message or your product. The new price structure will create a more efficient mail system so that the total overall cost of using the mail is kept as low as possible. Many of the changes come under the familiar heading of worksharing but we re taking it a few steps further. We re adding new sorting options to reduce the number of containers in all mailings, and we're extending scheme bundle and sack preparations to give mailers access to lower rates and to better align flats mail preparation with mail processing. We want to make using the mail a great value and reduce the costs associated with the handling of undeliverable-as-addressed mail by incorporating bold initiatives that make it easier and cheaper for mailers to get updated addresses. Here are highlights of the most frequently used products: First-Class Mail The shape of the mailpiece will play a major role in the prices you pay for First-Class Mail. Letters, large envelopes (flats) and packages (parcels) are no longer the same price based on weight. The new price structure recognizes that each of these mail shapes has substantially different processing costs so each mail shape will now have separate prices. The single-piece 1-ounce letter rate will increase 2 cents to 41 cents and the single-piece postcard rate also increases 2 cents, to 26 cents. The single-piece 1-ounce rate for flats (such as large envelopes) will be 80 cents and the single-piece rate for packages will be $1.13 for the first ounce. The additional ounce rate for all single-piece letters, flats and packages decreases to 17 cents. Letters weighing 1 ounce or less that do not meet aspect ratio standards, or have any other nonmachinable characteristics, continue to be subject to the nonmachinable surcharge, which increases to 17 cents. Letters that weigh more than 3.5 ounces, or exceed one or more of the maximum letter dimensions, regardless of weight, are subject to the rates for flats. Similarly, mailpieces that exceed any one of the dimensions for a flat will be subject to the rates for packages. The weight limit for flats and parcels remains 13 ounces. Another feature of pricing based on shape is a reduction in the additional ounce rate. As shape becomes more important in determining the price, less emphasis is placed on weight. With the additional ounce rate decreasing to 17 cents for all shapes, this results in lower prices for letters weighing over 1 ounce and large envelopes weighing over 6 ounces. If the contents intended for a large envelope can be folded and placed into a letter-size envelope, the mailer can save 39 cents on the first ounce. On the other hand, a mailer may determine that using a large envelope will enhance the perceived value of the enclosed message to the addressee and choose to pay the higher price. Likewise, some items traditionally prepared and mailed as a package may be reconfigured and placed in a large (expansion) envelope, saving the mailer 33 cents on the first ounce (additional ounces are 17 cents each). When mailers choose to mail more efficient shapes, our costs are lower and the savings can be passed on to the mailers through lower prices. The mailer has a choice as to the value of the shape of the mailpiece, versus the cost of preparing and mailing it. Similar changes apply to the pricing for workshare mail as well. The additional ounce rate for presort-rate letters, flats, parcels and automation-rate flats is 17 cents. The additional ounce rate for automation letters is 12.5 cents. These reductions, along with pricing based on shape, eliminate the need for the "heavy FYI Think shape and size for best value. Practice "right size" shipping with envelopes to save on postage.

3 FYI For a "snapshot" of First-Class Mail single-piece rates and shapes see page 37. piece" discount for mailpieces weighing more than 2 ounces. The weight limit for automation letters increases to 3.5 ounces. We are maintaining the same rate structure and 150-piece minimums for optional 5- digit, 3-digit and Automated Area Distribution Center (AADC) automation letter rates. The presort rate for letters increases to 37.3 cents (for the first ounce). Machinable letters are automation-compatible letters not barcoded by the mailer but easily processed and barcoded on USPS automation at the origin facility. Except for origin 3-digit trays, presorting by the mailer consists of AADC and mixed AADC tray preparation. This simplified mail preparation reduces workshare costs for mailers. Preparation for nonmachinable letters is not changing. To ensure automated processing of flat-size mail, all flats must be rectangular in shape, which includes square mailpieces. Otherwise, pieces will be subject to the rates for parcels. The physical standards for automation flats will be the criteria for Automated Flat Sorting Machine (AFSM) 100 pieces, with new standards for flexibility. The new price structure for parcels includes presort rates that previously did not exist. Rate and corresponding preparation levels are optional 5-digit, 3-digit and ADC sacks. To facilitate more efficient handling of presorted parcels, a 5-digit UCC/EAN Code 128 barcode or POSTNET barcode is required. If pieces are not barcoded, mailers pay an additional surcharge of 5 cents each. This surcharge also applies to any parcels weighing less than 2 ounces each, as well as to irregularly shaped items such as tubes and rolls, unless prepared in 5-digit scheme or 5-digit sacks. Priority Mail The price for our Priority Mail Flat Rate Envelope continues to be the same as the (unzoned) 1-pound rate, $4.60. The Priority Mail Flat Rate Boxes are now a permanent product offering and the price, regardless of weight, contents or distance traveled, will be $9.15. And we retain the "no fee" electronic Delivery Confirmation service option, available through Click-N-Ship and for manifest mailing systems (MMS) mailers. Until now, prices for large, lightweight items did not adequately reflect their true transportation costs. Our new Priority Mail prices correct this with the introduction of dimensional-weight pricing, a shipping industry-wide practice for many years. Dimensional-weight pricing is based on the cubic capacity or dimensions of the mailpiece and zone rather than the actual weight and zone. If an item is greater than 1 cubic foot and very light, it may be charged as a higher-weight piece, using the International Air Transport Association (IATA) standard. This pricing affects only pieces larger than 1 cubic foot and destinating to Zones 5-8. This pricing approach also results in Think shape and size for the best value Here s an easy way to look at it: For the lowest postage rate possible, use the smallest envelope or box possible. For Envelopes: As an example, a letter mailed in an 9" x 12" envelope costs 80 cents. By folding the letter and sending it in a letter-size envelope, you ll save 39 cents on postage. For Boxes: Don t ship small, lightweight items in large boxes practice right-size shipping. This helps you avoid possible surcharges for oversized packaging. Or you can simply use Postal Service packaging that comes in a range of sizes to meet your shipping needs. lower prices for some heavier-weight parcels to certain zones. In some cases, starting at 10 pounds, Priority Mail prices decrease and at 23 pounds and over, all prices are lower. Dimensional-weight pricing will not apply to Priority Mail Open and Distribute (formerly Priority Mail Drop Shipment) mailings of other classes of mail when enclosed in USPS-supplied containers. The balloon rate remains for items to local and Zones 1-4 only and no longer applies to items traveling to Zones 5-8. The minimum price for these large pieces will be the 20-pound price. Also, Zone 3 prices are now separate from Zone 1 and 2. This change aligns the Priority Mail zones with the zones used for all other classes of mail and allows for lower price increases for parcels traveling shorter distances.

4 Our Priority Mail containers, including the Priority Mail Flat Rate Boxes, available at Post Offices and usps.com are not subject to balloon rate or dimensional-weight pricing. Express Mail Express Mail items consist mostly of documents that weigh up to 2 pounds. To keep Express Mail a viable option for documents, we now offer 1-pound rates to fill the gap between 1/2 pound (and less) and 2 pounds, making Express Mail a better value for mailers of lightweight documents. Post Office to Addressee rates are: $16.25 for Express Mail Flat Rate Envelope (and 1/2-pound rate), $19.50 for items weighing over 1/2-pound and up to 1 pound and $21.40 for items weighing 2-pounds. Standard Mail Standard Mail prices will continue to encourage mailers to prepare mailpieces that are compatible with our operations and, with the exception of Enhanced Carrier Route (ECR) letters, to drop ship their mailings closer to the destination. Standard Mail pricing has even greater recognition of shape and a reduced reliance on weight. In general, Standard Mail pieces not compatible with our automated processing or that are parcel-shaped are priced higher. We no longer provide destination delivery unit (DDU)-entry rates for ECR letters. This is consistent with our efforts to promote delivery point sequencing of all letters, which usually occurs upstream at the mail processing plant that serves the delivery unit. Previously, ECR letters entered at the DDU resulted in the mail being sent to the plant for delivery point processing and then transporting them back to the delivery unit. We retain DDU-entry rates for flats and expand opportunities for parcels since that is the best entry location for those shapes. With the exception of the elimination of automation basic ECR letters, we are otherwise maintaining the same rate and mail preparation structure and 150-piece minimums, for optional 5-digit, 3-digit and AADC automation letter rates. To encourage even greater efficiency, we have separate price categories for machinable letters and nonmachinable letters and have eliminated the nonmachinable surcharge for letters. As with First-Class Mail machinable letters are automation-compatible letters not barcoded by the mailer, but easily processed and barcoded on USPS automation at the origin facility. Except for optional origin/entry 3-digit separations, presorting by the mailer consists of AADC and mixed AADC tray preparation. This simplified mail preparation reduces workshare costs for mailers. The prices for nonmachinable letters increase significantly due to their higher cost. Letters that do not meet aspect ratio standards or that have any other More value in our flat-rate packaging For outstanding value and convenience, use our Priority Mail Flat Rate Boxes and Envelopes no more weighing or calculating postage. They even feature biofriendly packaging. Get them at your local Post Office or online at usps.com. nonmachinable characteristics would be subject to the new nonmachinable letter rates. Preparation for nonmachinable letters is not changing. Nonmachinable letters must be processed manually and finer presorting is more valuable, so the price structure is expanded to parallel four required presort tiers (individual) 5-digit, 3-digit, ADC and mixed ADC. We increased the maximum size for ECR flats to 15 inches long by 12 inches high (maximum thickness remains 3/4-inch) so that the same maximum size applies to all flats, regardless of the rate paid. As our processing and delivery operations have evolved over the past 20 years, ECR saturation flats prepared and mailed with detached address labels (DALs) are no longer the most viable addressing option that they once were. Addressed pieces are more compatible with our mail processing operations. DALs allow a saturation mailer to place the address and postage on a separate card, rather than on the piece itself. We're not eliminating this option, but we now charge an additional 1.5 cents each if DALs are used. Until now, flats prices were available to some pieces not totally compatible with our AFSM 100 processing. These pieces are handled more like parcels, especially at delivery, which is more costly. In order to match prices more closely with actual costs, we have modified the definition for Standard Mail flats. In short, all flats must be rectangular in shape (they can be square) and flexible. Pieces too thick or too rigid (i.e., parcels and other box-like pieces) to run on our AFSM 100 machines no longer qualify for flats rates. Such pieces can be prepared and mailed as irregular parcels or machinable parcels, as appropriate, or be prepared as Not Flat-Machinable (NFM) pieces. The NFM category has higher prices than flats, but lower prices than irregular and machinable parcels. We now have separate price categories for irregular parcels, machinable parcels and NFM pieces. FYI A detailed description on dimensionalweight and balloon-rate pricing can be found in the September/ October 2006 Mailers Companion.

5 FYI Learn more about the Intelligent Mail Barcode at ribbs.usps.gov/ onecodesolution Within each category comes more presort levels and price tiers, as well as a new DDU-entry option. Any number of parcels and NFMs can be entered at an individual DDU and qualify for the 5-digit DDU-entry rate. Barcodes allow for more efficient processing of all Standard Mail parcels and NFMs, so to facilitate more efficient handling, a 5-digit UCC/EAN Code 128 barcode or POSTNET barcode, as appropriate, is required. If not barcoded unless prepared in 5-digit scheme or 5-digit sacks or pallets pieces will be subject to a surcharge of 5 cents each. The Standard Mail Nonprofit price structure and incentives mirror those of Standard Mail regular. Package Services Package Services mail includes Bound Printed Matter (BPM), Library Mail, Media Mail and Parcel Post/Parcel Select. A lower increase for destination entry BPM and Parcel Select mail recognizes the savings generated by mailers who enter mail in bulk at downstream processing and delivery facilities. We are also increasing the balloon rate pricing for Parcel Post and Parcel Select to 20 pounds and continue to apply balloon rate pricing to eligible Parcel Post/Parcel Select mail destinating to all zones. Barcodes allow more efficient processing of Parcel Select parcels and help support our efforts to streamline acceptance and verification processes. We recognize the value of parcel barcoding by including this value into the base price for machinable Parcel Select-DBMC parcels. Any parcels entered at a destination bulk mail center (DBMC) or destination auxiliary service facility (DASF) not bearing a UCC/EAN Code 128 barcode will be subject to Intra-BMC/ASF rates. Most Parcel Select parcels are currently barcoded by mailers or consolidators and doing so also allows for "no fee" electronic option Delivery Confirmation service for all Parcel Select parcels. Extra Services and Other Fees Extra services and other fees include Certified Mail, Return Receipt, Delivery Confirmation, Signature Confirmation, Registered Mail, Insurance and Post Office Boxes. Business Reply Mail Pricing of all Business Reply Mail (BRM) returns will be based on shape. In addition, there are increases as well as decreases to certain BRM per piece fees. The BRM annual permit fee and annual accounting fee increases and the Qualified BRM quarterly fee decreases. These new fees apply only to first-time payments and fee renewals. BRM customers with current annual and quarterly fees paid do not begin paying the new fees until their current payment period expires and it is time to renew. Reduced cost for Electronic Return Receipt For added convenience and savings, choose the electronic version of our Return Receipt and pay 85 cents instead of $2.15. Via , you ll receive evidence of delivery (including the recipient s signature). Confirm Service Confirm enables mailers to obtain information about the status of their letters and flats in the mail processing system. The fees increase for the Gold and Platinum tier subscriptions and quarterly additional IDs. The fees for the Silver tier subscription did not change, but the charge for additional IDs has increased. Delivery Confirmation The Delivery Confirmation service fee is built into the price for certain Priority Mail and Parcel Select parcels and can be purchased separately for other packages. For First-Class Mail packages and Parcel Post, the retail option fee increases to 75 cents and the electronic option fee is now 18 cents. For Priority Mail, the retail option fee increases to 65 cents and the electronic option including with Click-N-Ship remains free. For Standard Mail parcels and NFMs, the electronic option fee increases to 18 cents. Insurance All insured items, regardless of insured value, will be numbered and barcoded and receive a delivery scan. Items insured for more than $200 will also continue to get a signature at delivery. Insured fees for more than $50 up to $200 are reduced (as is the cost for additional Express Mail insurance coverage). We are also developing an online claims filing process, initially for insurance purchased using Click-N-Ship or on ebay shipments. Mailing and Permit Fees The permit imprint application fee and all annual mailing fees increase to $175. Annual accounting fees increase to $550. These new fees appy only to first-time payments and fee renewals. Customers with current fees paid do not begin paying the new fees until their current payment period expires and it is time to renew. OneCode Address Change Service (ACS) We now offer low-cost OneCode Address Change Service (ACS). This automated option allows us to electronically note the incorrect address on a First- Class Mail or Standard Mail letter and electronically send the corrected address back to the mailer at a much lower cost and for no cost for First-Class Mail letters.