postage_increase

New Year, New Postage Rates

by laura.santos, January 19, 2012

If you’re somewhat of a regular mailer, you’ve probably heard that the Unite States Postal Service postage rate increase takes effect on January 22nd, marking the second postage increase from the USPS in less than a year.  The last increase that went into effect on April 17, 2011 was put in place after Congress rejected a larger increase of 5.6% in 2010. Unlike the current increase, the last did not increase the rate of first-class stamps, making the 2011 increase more of a burden to businesses and non-profits utilizing direct mail. Since that last increase wasn’t really on the radar of the general public, it will be interesting to hear what people have to say about the new 1-cent increase on first-class stamps — as well as on the USPS’s December 5, 2011 filing with the Postal Regulatory Commission (PRC) requesting an advisory opinion on proposed changes to mail service standards that would slow down the delivery of First class mail. (More info to follow on that as it becomes available.)

Basically, as long as proposed USPS rate increases fall within the rate of inflation, they need not receive approval from Congress or any other governmental agency. This most recent increase comes at a time where the U.S. inflation rate is 2.1% (per the Consumer Price Index) and the latest hike falls below this figure, hence, it’s smooth sailing for the it to go info effect.

“The overall average price increase is small and is needed to help address our current financial crisis,” explained Postmaster General Patrick Donahoe in an October 18, 2011 USPS press release. “We continue to take actions within our control to increase revenue in other ways and to aggressively cut costs. To return to sound financial footing we urgently need enactment of comprehensive, long-term legislation to provide the Postal Service with a more flexible business model.”

A 2.133% rate increase effects First-Class Mail, Periodicals and Package Services.  Bulk Standard Mail and first class presort rates will increase by 2.124% and some Extra Services will also see a rate boost. The postal service did not specifically address nonprofit postage, however, it is essentially a sub-class of presort standard so look for an increase of 2.124% there as well. Not everything is going up… Express Mail and Priority Mail pricing will remain the same.

An Overview of the New Rates

New single-piece First-Class Mail prices:

  • Letters (1 oz.): A 1-cent increase brings the rate to 45 cents
  • Single-Piece Letters additional ounce: Remain at 20 cents per
  • Postcards: A 3-cent increase (10%!) brings the rate to 32 cents
  • Letters to Canada or Mexico (1 oz.): A 5-cent increase brings the rate to 85 cents
  • Letters to other countries: A 7-cent increase brings the rate to $1.05

TIP: Stock up on Forever stamps (for US First Class letters) to utilize the lower rate for a longer period of time!

Other Price Adjustment Highlights:

  • The Standard Mail Letters price increase for is just below the overall average, at less than 1.9%
  • For PO Box rentals, a new 3-month pricing option will be available for those who need a box for a shorter period of time
  • As the USPS continues its efforts to make tracking an integral component of parcels mailed at commercial rates, Delivery Confirmation will be free for several parcel products

Special Savings

Along with the increase, there happens to be a notable savings opportunity. For First-Class Mail Presort pieces weighing between one and two ounces, the second ounce will be free. (This is along the lines of the USPS’s 2011 “Reply Rides Free” initiative that ran last Jan. 2 through Dec. 31.)

The second ounce free effort is an attempt to make sending bills and statements via First Class Mail more attractive to businesses, as it would enable additional advertising and promotional materials to be placed in the envelope as well.  “This gives companies expanded opportunities to advertise new services and products to their customers as part of bill and statement mailings,” noted Paul Vogel, president and chief marketing/sales officer at USPS.

Alternatives for Direct Mailers

The USPS’s Every Door Direct mail program that launched last April will also not be affected by the increase. Enabling marketers to mail at a low rate of just 14.2 cents per mail piece, the program offers the most cost-effective way to employ direct mail to market to a target audience by geographic location.

With these new rate increases in effect, savvy marketers should take the opportunity to reevaluate their direct mail options. If you are able to transfer any portion of your direct mail efforts to Every Door Direct Mail™, you’ll not only avoid the postage increase, you’ll actually SAVE a significant amount of cash in postage. The USPS has set up a separate web site detailing Every Door Direct Mail. Visit http://www.uspseverydoor.com/ to discover how your business can utilize this less expensive means of mailing.

For those mailers who utilize first class presort mail, you may wish to use precancelled stamps and mail at the lower presort standard rate. Click here to learn more about mailing with precancelled stamps at greater savings.

Direct mail is here to stay. It’s up to those doing the mailing to find the ins and outs of working the postal rates to get the best bang for their buck.

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