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2017 Postage Rate Increase: Good News for Commercial First-Class Mailers

Posted by Mark Fallon on Oct 26, 2016 5:01:00 AM

The U.S. Postal Service (USPS) has filed the rate case for Market Dominant products with the Postal Regulatory Commission (PRC). Set to go into effect on January 22, 2017, the new rates represent about an overall 0.87% increase over the current prices. For Commercial First-Class Mail, the prices actually drop in some categories. And that’s just the start of the good news.

2017 Rates.jpg

The two categories with the largest increases are Retail Single Piece (i.e. – stamped mail) and Single-Piece Flats, with both growing by 4.3%. The probable effects of these increases – more people paying bills online and more companies converting light flats to 6x9 envelopes. The volumes of these two categories have been in steady decline for the last 5 years, and the new rates will ensure that the trends will continue.

The biggest surprise – and gift – to Commercial First-Class Mail senders is the decrease in the cost of Metered Single Piece mail from $0.465 to $0.46 per envelope. This marks 2 years in a row that metered single piece mail prices have gone down. The lower costs will be a great help to small offices who don’t have the volumes to presort their mail, or even enough volume to attract a presort services vendor.

For larger mailers, the good news is the slight decrease in the price of 5-digit presorted mail by $0.003. At first glance, 3-tenths of a cent may not seem like a lot. However, mailers who are sorting to this level probably mail at least 1 million pieces a week. That translates into $3,000 a week, or over $150,000 a year in savings. That helps anyone’s budget.

After years of having the same price-point, the USPS has finally merged the 3-Digit and AADC presort levels. The network rationalization and consolidation eliminated the need for sorting to the 3-digit level, and the new pricing structure reflects that reality. The savings for mailers will come in the form of streamlined processes and less labor to prepare presorted mail.

The best news involves changing the weight restrictions and pricing for presorted letters. First, the USPS is increasing the “up to” weight standard for First-Class Mail Commercial Machinable letters from 3.3 ounces to 3.5 ounces. This may look like a small difference, but with treated paper being needed for crisp colors, the additional weight allowance will be a boon in the age of ink-jet printing.

Along with increasing the weight restrictions, the USPS is proposing one price for all presorted, First-Class Mail Commercial Automation letters up to 3.5 ounces. This weight increase means savings of between $0.25 and $0.37 per piece for many mailers. Additional pages, heavier stock, more inserts – the opportunities are substantial. Mailers should reconsider the design of every mailpiece and exploit the prospective ways to take advantage of this rule change.

As the commercial says, wait, there’s more. The $0.003 per piece incentive for using Full Service Intelligent Mail Barcodes remains in place. Also, the Postal Regulatory Commission (PRC) approved the six USPS Mailing Promotions for 2017, and the detailed participation requirements documents for all six are now available on the USPS RIBBS website. Additional opportunities for savings.

The phrases “postage rate changes” and “good news” aren't normally present in the same article or blog post. For Commercial First-Class Mailers, the USPS announcement for the 2017 rates is the exception that proves the rule.

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