Reshaping Mail Allows Businesses to Reduce Costs
WASHINGTON, May 3 /PRNewswire/ -- The U.S. Postal Service has unveiled
proposed new pricing incentives that would effectively reshape the future
of mail and provide benefits to both business customers and the Postal
Service. The current pricing structure for postal products relies primarily
on a weight based system. The new plan -- sent to the Postal Rate
Commission (PRC) as part of a 2007 price adjustment proposal package --
combines weight with shape to allow the Postal Service to better align
prices with processing costs to ensure every type of mail covers its costs.
Price changes would not occur before May, 2007.
Current Postal Service prices do not distinguish between some letters,
flats, and parcels. For example, in First-Class Mail, the current
single-piece price is 63 cents to mail a 2-ounce letter, a 2-ounce flat,
and a 2-ounce parcel. The new plan recognizes that each of these shapes has
substantially different processing costs and should have different prices.
The new pricing plan, in effect, creates an adjustable rate system by
giving mailers the opportunity to obtain lower rates as they find ways to
configure their mail into shapes that reduce processing costs for the
Postal Service. For example, if the contents of a First-Class flat can be
folded and placed in a letter-sized envelope, the mailer can reduce the
postage by as much as 20 cents per piece. If a First-Class parcel can be
configured as a flat, the mailer will save 36 cents.
As the Postal Service emphasizes shape in its pricing, it also proposes
to reduce the additional ounce rate. As mail pieces become heavier, the
proposed price increase declines. For letters over one ounce, the new
prices are actually lower than today's prices.
"Our pricing proposal recognizes changes in underlying costs and market
conditions, and includes pricing initiatives to improve efficiency, which
helps keep rates affordable for everyone," said Postmaster General John E.
Potter. "We will work closely with our business mailers in the coming
months to show them how they can take advantage of the new pricing to keep
their mailing costs as low as possible," added Potter.
The following chart illustrates the many opportunities to mitigate
price increases as business mailers help the Postal Service to shape a more
efficient future:
Product Current Proposed Potential Proposed
Class/Product description price price modification price with
modification
First Class Parcel - 6 Reconfigure
Mail ounces; $1.59 $2.00 the piece as a $1.62
Single flat
Piece
Large Reconfigure
envelope (a $0.63 $0.82 the piece as a $0.62
flat) - 2 letter
ounces
Standard Mail Parcel - 8 Enter at the
ounces, destination
Basic $0.794 $1.301 BMC $1.101
presort, no
dropship
Parcel - 12 Enter at
ounces, destination
3/5-digit $0.823 $0.939 DU, 5-digit
presort, presort $0.801
DSCF
4-ounce Use flexible
rigid $0.275 $0.491 packaging for $0.291
automation automation
flat, DSCF
entry
Saturation Put the
flat, 3 address on the
ounces, DAL $0.136 $0.155 flat (no DAL) $0.140
used, DDU
entry
Address Electronic Use Automated
Correction notification $0.21 $0.06 (OneCode) ACS $0.00
Service - First
Class Mail
Electronic Use Automated
notification (OneCode) ACS
- Standard $0.21 $0.25 $0.02
Mail
Periodicals 8-ounce, 5- Co-palletize
digit auto, with another $0.361
mailed in $0.334 $0.381 magazine (1639
sacks (40 per pallet)
per sack)
As above, but $0.312
enter at DADC
Priority Mail 10 POUND, Reduce package
1.6 CUBIC size by 25%
FOOT $20.25 $28.75 $24.85
PARCEL
- Zone 8
Since 1775, the United States Postal Service and its predecessor, the
Post Office Department, have connected friends, families, neighbors and
businesses by mail. An independent federal agency that visits more than 144
million homes and businesses every day, the Postal Service is the only
service provider delivering to every address in the nation. It receives no
taxpayer dollars for routine operations, but derives its operating revenues
solely from the sale of postage, products and services. With annual
revenues of $70 billion, it is the world's leading provider of mailing and
delivery services, offering some of the most affordable postage rates in
the world. The U.S. Postal Service delivers more than 46 percent of the
world's mail volume -- some 212 billion letters, advertisements,
periodicals and packages a year -- and serves seven million customers each
day at its 37,000 retail locations nationwide.
SOURCE U.S. Postal Service
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Related links:
http://www.usps.com
CONTACT:
U.S. Postal Service Media Relations,
+1-202-268-2155
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