by Michael Tull
MCH Response Lab Director

May Rate Adjustments
In February the USPS announced the 2008 rate adjustments. Here are some average rate increases by class, excerpted from the DMA's February 29 Postal Rate Update Webinar. Specific categories within each class may have rate adjustments that are higher or lower than the averages shown here.

The complete price list can be found here.

Background
The first postal rate changes under the new law will take effect on May 12, 2008. H.R. 6407, the "Postal Accountability and Enhancement Act", was signed into law in December 2006. The Act changed the rules that govern USPS postage prices. Under the Act, instead of going through the cumbersome rate case process of the past, the USPS may now directly set the rates for market-dominant products such as First-Class, Standard, and Periodicals Mail. However, for those products, the average increase in rates for each mail class may not exceed the change in the Consumer Price Index (CPI) for the most recent available twelve-month period preceding the date that the rate changes are announced. In January of 2008 the increase in the CPI for the prior twelve months was determined to be 2.9%.

Rate changes must be announced at least forty-five days before they take effect. In addition, the law requires that the Postal Regulatory Commission have the opportunity to review proposed rate changes and ensure compliance with the intention of the law. Although the law requires forty-five days' notice, the USPS has committed to announce rate changes at least ninety days before they take effect. In addition, the USPS has stated its intention to adjust rates for market-dominant products on an annual basis, effective in May of each year. Assuming that inflation continues, annual postage price increases are likely.

USPS representatives have acknowledged that last year's hefty increase in rates for Standard Mail flats were a surprise and caused a big cost increase for many mailers, especially catalogers. They tried to be moderate with this year's increases.

Tips for Mailers
Here are some steps that mailers can take to reduce postage costs:

• Where possible, reconfigure a mailpiece so that it qualifies for a lower cost rate. For example, some packages can be redesigned to qualify as flats. Many flats can be slightly redesigned or in some cases can be folded to qualify for letter rates. Your mailshop or local USPS Mailpiece Design Analyst should be able to provide advice on redesigning mailpieces to qualify for lower cost rates. Click here to find the name and contact information of a nearby Mailpiece Design Analyst.
• Maintain a high level of address quality. Addresses that aren't validated as delivery points during CASS processing lose their ZIP+4 code, and are therefore disqualified for automation discounts. And with postage costs as high as they are, a mailer should strive to avoid mailing to undeliverable addresses. Take advantage of USPS services like CASS, NCOALink, DSF2, and Address Element Correction to keep addresses as current and correct as possible. See our previous article for additional information and tips on maintaining address quality.
• Ask your mailing service provider to be sure they are presorting your mailings for the best possible discounts. If the density of your mailings isn't high enough to qualify for some of the deeper discounts, find out if your service provider can co-mingle your mailings with those from other companies in order to qualify for higher discounts. In addition, depending upon their size and sophistication, your mailing service provider might be able to enter your mailings deeper into the mailstream and qualify for larger discounts.

The MCH team is standing by to help you ensure the quality of your data. Give us a call today!

Watch for upcoming articles from Michael Tull regarding the USPS Move Update requirements and Intelligent Mail Barcodes.