Postal prices have been approved by the Postal Regulatory Commission mostly as the U.S. Postal Service proposed and changed effective Jan. 22. Most of the details were given in the November issue of Pub Aux, so I will highlight them here with an emphasis on the ones of greatest importance for newspapers and their shoppers.
First, prices do not change for in-county Periodicals, the main prices affecting community newspapers. Likewise, for Regular Rate Periodicals (outside-county) pound, piece and bundle prices. The inflationary increase allowed under the law was so small at less than 1 percent that prices were difficult to change.
Tray/Sack prices are the only Outside-County item seeing an increase, in conjunction with an end to all prices for Flats Sortation Sequencing, from which newspapers have been mostly exempt.
A Mixed ADC container entered at your origin post office or SCF will increase by 5 cents to 51.2 cents, or 10.8 percent. Most newspapers will only have a few of those, or perhaps only one. Likewise, 5 cents for an ADC tray to $2.22, up 2.3 percent.
A 3-digit/SCF container will increase the same amount to $2.32 cents, up 2.2 percent, and a 5-digit/carrier-route tray will increase just six-tenths of a cent to $2.928, up .2 percent. Most newspapers will have more of these containers outside-county than any other, with least price impact on the latter.
MARKETING MAIL NEW NAME FOR STANDARD MAIL (OLD 3C)
One adjustment that will no doubt take some getting used to is the changing of the name Standard Mail to “Marketing Mail.” Many publishers still use the even older name of “Third Class,” which was changed to Standard Mail in 1996 with “Product ReClassification.” That’s also when “Second Class” became “Periodicals.”
The renamed Marketing Mail class was always designed for advertising mail, no matter what it was called. So, the Postal Service is undoubtedly trying to help the younger generation in ad agencies and businesses understand its purpose better.
SHARPEST INCREASE IN WEIGHT BREAK EVER, FROM 3.3 TO 4 OUNCES.
But the big news out of this rate case was the change in the “weight break,” or the weight at which a Marketing Mail piece must start paying both a piece and pound price, rather than a flat rate. The increase in this weight allowance, if you will, from 3.3 ounces to 4 ounces, is the largest ever made, and reflects a desire to allow larger packages of advertising (or news and advertising, in the case of some free newspapers and shoppers) 3.3 ounces equals .2063 of a pound, while 4 ounces equals .250 of a pound, or one-fourth pound. Weight is weight, whether ROP or supplements. So, the best business plan is to shoot for as close to or right at the 4 ounces mark, the sweet spot where the most money can be collected for the same postage price.
The hike in weight could be viewed as a way for the U.S. Postal Service to help grow marriage mail packages, which it likely is. But it will also be of equal value to any Marketing Mail shoppers offered by newspapers. By referencing the accompanying chart rerun from the November issue, one can see that pieces getting to 4 ounces would have an effective postage decrease of 8.18 percent at the DDU/Saturation level, 5.61 percent at the DDU/High-Density Plus price, and 6.94 percent at the High-Density price. The decrease at the HD-Plus price is smaller because of an even greater decrease granted to the prior piece price, likely to encourage more newspaper shopper mail volume. But from what I’ve seen, non-subscriber shopper mailings these days have hit the Saturation level quickly as subscriber route penetration has declined.
The savings in postage is 1.58 cents per piece for the additional weight up to 4 ounces from the current Saturation or High-Density prices. For instance, a 0.7 ounces preprinted advertising insert could be added to your customer base for no additional postage if you were maxing out at 3.3 ounces. Or one could add multiple single-sheet inserts or smaller multi-page preprints for no additional cost.
This is a big opportunity for shoppers to grow their revenue without growing their postage. And indeed, prices are declining for heavier-weight packages at virtually all weight, sortation and entry levels, allowing newspapers to be more competitive with “marriage mailers” in their markets, or at least experience the same benefit. No doubt retail customers, especially larger chains, will know of these changes and put further price pressure on all market players.
(As a reminder, Saturation prices are granted to 100 percent of the active deliveries on a route, either residential or total, using “Simplified Address” like “Residential Customer,” or to 90 percent of addresses on a route when specific addresses are used. High-Density Plus prices require at least 300 pieces per route, and regular High-Density requires at least 125 pieces per route.)
Marketing Mail Saturation letters, like Val-Pak, a newspaper competitor in some larger-city markets, get a weight increase too, but only to 3.5 ounces from 3.3 ounces.
EVERY DOOR DIRECT MAIL PRICES
EDDM Retail pieces would cost 17.7 cents, up just a bit from 17.6 cents. But note that the weight limit continues to be 3.3 ounces, with no increase in that single-piece Saturation ad mail category, entered across the front counter (as opposed to Business Mail Entry Unit) of post offices. EDDM BMEU prices are the same as that paid by newspaper shoppers, and can take advantage of the weight break.
OTHER PRICE CHANGES
Hardcopy Address Change notices (yellow adhesive tags) are 58 cents per piece, but free to those who use Full-Service Intelligent Mail barcoding.
Marketing Mail annual mailing fee is $225, the same as for the Permit Imprint one-time fee.
Periodical application fee is now $685. Re-entry is $75. There are no longer any fees for “Additional Entry” offices where you choose to pay postage for a Periodical mailing not entered under Exceptional Dispatch or with copies going outside a Sectional Center Facility to “the world.”
UPDATE on name change of Standard Mail to USPS Marketing Mail:
• The new indicia and/or postage markings should not be used for letter or flat mail until January 2018 at the earliest.
• Tray label and pallet markings will be deferred until mid-2017 at the earliest.
• Changes to postage statements and forms can take place in January 2017.
MAX HEATH, NNA postal chair, is a consultant for NNA members and Landmark Community Newspapers. He is sponsored by Interlink Software. Email email@example.com.