In-county and carrier-route Standard increases eased

May 31 is effective date, USPS says, but delay is still possible

max heath columnThe U.S. Postal Service took nearly a month to respond to the second “remand” of 2015 price proposals by the Postal Regulatory Commission. The unprecedented send-back for corrections and recalculations led to a much slower response after the first remand was returned in six days. USPS declared in the filing that the new prices would take effect May 31, more than a month beyond the original proposal of April 26. The bold declaration would appear to dare the PRC to delay it further. But the PRC rejected the dare and instead invited public comment on the latest round of proposed rates through April 23.  Final rates are not supposed to take effect until 45 days after a final rate decision. USPS has not tested the strength of that rule by moving ahead without PRC action on rates, but has ignored the commission on other matters when decisions are slow to come. So, May 31 may be the final date. Or the date more likely will be in early June. NNA members will be alerted when the final word is out. USPS said the final proposed Periodicals rates are 1.96 percent higher than 2014 rates. Revised charts for in-county Periodicals and carrier-route Standard Mail prices accompany this column. THE HIGHLIGHTS In-County Periodical piece prices were dropped slightly from those in the first proposal by either one-tenth or two tenths of a cent. That resulted in more price cells increasing less than 2 percent. Most are below the Periodicals average now. A 4 oz. newspaper sorted to carrier route and entered at the delivery office (DDU) would pay 10 cents exactly, an increase of 1.78 percent, just below inflation. High-Density W/S DDU would be 8.2 cents at the same weight. If Saturation, as when sampling an entire route or ZIP, the price would be 6.7 cents. That is good news for beleaguered publishers who should take heart that the increase will be delayed by more than a month, and it appears to have improved from the standpoint of those who mail in-County Periodicals and have shoppers or free newspapers mailed using Standard Mail. STANDARD MAIL Standard Mail Carrier-Route prices commonly used by newspaper shoppers would have actually declined some under the second proposal, issued after the first remand. We deferred sharing that last month’s under NNA CEO Tonda Rush’s wise counsel that it was likely to change yet again, which it did. But the increases we are seeing vary widely compared to the original proposal, with some increases less than the original proposal and others more. DDU Basic price for 10-124 pieces on a route would increase 2.9 percent, up to 3.3 oz. But most shoppers mail much more at higher penetration levels. DDU High-Density copies for 125-299 pieces per route would increase a minimum of 1 percent, with slightly lower percentages after that. DDU High-Density Plus for 300 or more copies on a route would increase about 1.1 percent at minimum, then less than 1 percent as weight increases over 3.3 oz. DDU Saturation prices would increase 1.9 percent at minimum weight, and then by declining percentages with weight from 1.5 percent to 1.1 percent at 16 oz. (DDU means Destination Delivery Unit, dropped at the office of delivery under either one of two different methods after verification.) EDDM Saturation prices for Every Door Direct Mail Commercial (entered through Business Mail Acceptance—not the Retail counter—that apply to unaddressed (or Simplified Address) copies are one-tenth of a cent higher at 16 cents versus 15.9 cents for addressed pieces. This is nonsensical, and NNA believes it is unfair that mail that is easier to deliver without specific addresses should be charged more. This is often misunderstood, even within USPS. Some post offices charge one rate and others another. EDDM Retail price per piece increases to 18.3 cents from 17.5 cents, up 4.6 percent. In some towns, USPS sells Saturation mail pieces to local businesses that may compete with newspapers. In others, newspapers with print shops sell it themselves. Detached Address Label price would increase from 34 cents to 36.4 cents. PERIODICALS Outside-county Periodical prices are a mixed bag that could result in variable increases for different publishers. It is very difficult to compute a chart, but here are some things entering into the mix: Advertising and non-advertising pound prices will decrease.  Although the advertising pound price declines will be less than first proposed, the non-advertising prices will still decline about 24 percent. But that will be offset by other things in a reallocation of price factors. Piece prices will increase somewhat, especially for nonmachinable copies. Non-advertising piece discount was increased from the first proposal, which was the same as existing, $0.00111, to $0.00113 times the number of addressed pieces times the non-advertising percentage. Bundle prices, first introduced into the price schedule five years ago, jumped through the roof, making the pieces per bundle critical to percentage increases per title. Increases range from 24 percent for Firm bundles to 151-161 percent at the Mixed ADC or ADC levels. ONE BIG TAKEAWAY for NNA members: It is no longer feasible to makeup bundles with fewer than six pieces. Sack/Tray prices are not increasing, but Pallet prices take a huge jump. Most community newspapers that palletize mail are doing so with DDU pallets, which increase from $1.79 to $3.12. That is a huge 70 percent, but not a lot of money for a full pallet. Many are Requester Periodicals that saturate routes in ZIP codes served. USPS said in its filing that it is increasing bundle and pallet charges “in order to provide efficient pricing signals and improve cost coverage for Periodicals.” The rest of that story is that its decision to charge for bundles and pallets at all was controversial from the beginning, and USPS has answered the criticism in part by keeping the charges lower than actual costs. But financial pressure on USPS is pushing those rates higher. The reduction in per-pound prices for news and advertising is offered to mitigate the increase, said USPS, and the increase in the per-piece editorial discount is supposed to mitigate costs for high-editorial, low-advertising publications. Remember, there are no bundle or container charges for in-County mail, nor those mixed with both in-county/outside county copies. The U.S. Court of Appeals still has not ruled on appeals by the mailers and the Postal Service concerning the 2014 exigent case, which added 4.3 percent to the price increases. A final ruling was expected before the end of last year. A decision could throw a huge monkey wrench into this year’s rates. But that base is included in these proposals pending any decision. © Max Heath 2015 MAX HEATH, NNA Postal chair, is a postal consultant for Athlon Media Group, publisher of Parade, American Profile, Relish and Spry newspaper supplements, and also for Landmark Community Newspapers LLC. E-mail published May 1, 2015, via National Newspaper Association.