USPS Lowers Rates Even As UPS And FedEx Raise Theirs

It’s now becoming easier to select who should mail your letters and ship your packages.

On April 10th, the US Postal Service will reduce rates by an average of 4.3%.  The 1-oz postage stamp goes from 49 cents to 47 cents.

And that’s great news for consumers.

But the real news is how UPS and FedEx rates have been steadily increasing.

In January, UPS and FedEx both increased rates by an average 4.9% .

And like the airlines that now charge for snacks, they’ve both increased or added fees for all sorts of other things, too.

Your box bigger than X inches? There’s a fee for that.

Address needs correction? There’s a fee for that.

Mailing to a residence or an ‘extended’ location? There are fees for that.

In addition, since January, UPS has added a whole new 2.5% surcharge for 3rd Party shipments — packages shipped on one account but billed to another.

So now, according to the PANC Group, these “accessorial” fees can account for up to 33% of shipping expenses.

Adding more salt to the wound, both FedEx and UPS have not yet lowered their fuel surcharges. These surcharges were created when gasoline costs were approaching $4 per gallon.

Even as gas slips below $2 per gallon, FedEx and UPS are still raising these surcharges.

So where does the Postal Service stand after all of these price contortions? The clear winner.

To see how rates compare, check out the infographic below published by Endicia earlier this year.

A small, 13-oz box (8″x 6″x 4″) traveling from Minneapolis to Chicago, costs over $12.50 with UPS and FedEx Ground. Or spend just $3.50 with USPS 1st Class.

A 12″x 10″x 6″ package going from Seattle to Atlanta costs over $16 with UPS and FedEx Ground, but just $10.77 with USPS Priority Mail. While UPS and FedEx would get the box there in 5 days, with USPS, it takes just 2-3 days.

Granted, if you’re shipping big, heavy boxes, you should stick with UPS, FedEx and the trucking companies.  USPS becomes pricey as the shipment gets bigger.

But if you’re mailing envelopes and small packages, then you should consider the USPS as your go-to shipper.

Because the last thing you need is to feel boxed in.

 

Infographic published by Endicia, January 2016.

Lower USPS Postage Rates To Start April 10

Yes, US postage rates will be reduced on April 10, 2016, unless Congress or the courts intervene.

That’s good news, at least in the short term, for postal customers who will see an average 4.3 percent price decrease. A First Class Letter 1-ounce stamp will become $.47 (currently $.49).

But in the long term, the news is not so good.

The USPS is still trying to work through a Congressional requirement to prefund retiree pensions at over $5 billion per year, over a 10-year period.

An additional 4.3 percent decrease will impact USPS revenues by $2 billion annually.

The options for the USPS are limited.   Congress won’t allow the USPS to cut back Saturday delivery, and hamstrings USPS management on closing poor-performing Post Offices.

Even the pending postage decrease is out of management’s control.

To make up for the shortfall, USPS service will likely have to degrade service quality.   This most likely means one thing: add days to delivery time.  And that’s good news for nobody.

On April 10, 2016, postage rates will be:

First-Class Letter (1 oz): $.47 (currently $.49)
Each additional ounce: $.21 (currently $.22)
Postcard rate: $.34 (currently $.35)

We’ll keep you posted.

 

What Is Saturation Mail?

Saturation mail is a type of mailing that reaches most addresses within a given geographic area. The USPS post offices offers a discount up to $.09 off the Basic Standard Mail rate for properly prepared saturation mail.

With this discount, direct mail becomes an even more attractive way for marketers to reach local communities. For under a quarter each, businesses can mail their promotional offers to counties, Zip Codes, neighborhoods, or even a single carrier route.

For the maximum discount, the Post Office requires that your mailing follow the 90/75 Rule. This means you must be reaching at least 90% of the residential addresses in each Carrier Route you’re targeting, or at least 75% of the combined residential and business addresses available.

Also, your mailing must be sorted in the same order that the postal carrier walks the route — the “Walk Sequence.”

The requirements to mail at the Basic Standard Mail rate also apply. These requirements include: 1) a Standard Bulk Mail permit, 2) mailing piece needs to qualify as a letter, card or flat, 3) addresses need to be accurate and follow the Move Update Standard and 4) the mailing needs to be at least 200 pieces.

Most list brokers offer special mailing lists they call ‘Occupant’, ‘Resident’ or ‘Saturation’ lists that provide all addresses, in Walk Sequence, for any postal carrier route.  And typically, the cost to rent these lists is nominal: a couple cents per address. Lists are available addressed either to “Current Resident” or with the head of household named (ie. “Mary Smith”).

Now, if you’re trying to reach a certain demographic audience, for example, retirees or pet owners, you might be better off looking at special consumer or business lists, and mail at the regular Standard Mail rate.

But if you’re making a general announcement — like a Grand Opening — or if your service has a wide appeal — like an Urgent Care provider or a pizza shop — then a saturation mailing could be the best way to help attract new traffic.

For marketers who need to reach a localized audience, saturation mail should be in your marketing toolbox.

New USPS Rates for 2015

Sure, no one wants to see USPS postage rates increase in 2015. Unless you’re the Post Office.

The USPS has been trying hard to stop a cash hemorrhage since 2006, when Congress passed a law that required the USPS to pre-fund its retirement expenses.

This is the same Congress that told USPS that postage rate increases can’t exceed 5% per year, that certain non-performing offices can’t be closed, and that non profit organizations are entitled to significant discounts, or even free postage, if your organization is Congress.

So here we are, and as of May 31, postage rates are increasing again. Well, sort of…

A one ounce First Class letter stamp remains the same: $0.49. However, the USPS Postcard rate is $.35, up from $.34.

The quirky discount offered by the USPS for metered mail gets quirkier: a 1 oz letter goes from $0.48 to $0.485. Next thing you know, there will be special postage rates when paying with Bitcoin.

It seems that the real bread and butter for the Post Office is the heavier envelopes, flats and packages. And that’s where the USPS rate increases really take effect.

For each additional ounce over the first ounce, First Class letter postage tacks on $.22 (up 4.8% from $0.21).

First-Class Package Services (previously called Mail Parcels), for packages bigger than letters or flats, start at a postage rate of $2.54 for 1-3 ounces (up 9.5% from $2.32).  Check out the USPS website for all the new rates.

But before you get outraged at postage inflation, take a breath and consider this: a postage stamp remains the bargain of the century.

Where else can you find the value you find in USPS postage rates? You seal the box or envelope and put it in a mailbox. Six days a week, someone drives out, checks the mailbox and drives back to the local Post Office, where your item is sorted and re-sorted, travels by numerous trucks, planes and trains to a final Post Office possibly 8000 miles distant, driven out and deposited to the address written across the front.

All this for a paltry price starting at $0.49 (retail), or $0.35 (the postcard rate).

And all this without government subsidy of USPS operating expenses.

You can’t even take your car around the block for that price.

So, yes, USPS postage rates have increased as of May 31, 2015. But considering all that we’re saving, it ain’t so bad.

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If you’re a business located in the USA, you may qualify for our free 2015 postal rate chart, with new First-Class and Flat Rate Priority Mail rates and a handy magnet on back (’cause that’s what we do).  Sign up on our magnetbyMail webpage and we’ll mail it right out.  Did we mention it’s free?

US Postal Service: Lives To Fight Another Day

image credit: thankgodimpretty.com

I came across an article last week that caught my interest. It was Harry Whitehouse’s article about the US Postal Service.

Harry notes that when there’s a discussion about shipping carriers, it’s usually about UPS and FedEx. The USPS is invariably left out.

But the US Postal Service delivered 524 million packages in December, compared to 585 million delivered by the UPS and 290 million delivered by FedEx. Whitehouse notes that 28 million packages were delivered by the USPS on just one day alone, December 22.

What many journalists miss is that the shipping world is not what it was five years ago — back when most had written off the Post Office as a bureaucratic dinosaur.

Since then, the USPS has done quite a bit to turn things around. It developed a strategy to reduce its dependence on the First Class letter, and increase small package delivery.

The USPS has updated its technology so that it works with scanners and barcodes, provides package tracking online, improved delivery performance and updated its package insurance. It’s done this to keep up with the demands of online retailers like Amazon.

But the big news is, while FedEx and UPS have been steadily increasing their prices, and adding surcharges for fuel, residential deliveries and dimensional packages, the USPS has trimmed rates and emerged as the best economic option.

For example, say you’d like to ship a 10 lb package from Boston to St Louis. With FedEx 2Day, that will be $46.71. With UPS Ground, that will be $22.05, for a 3 day delivery. Or put your items in a USPS Priority Mail Regional A box (supplied free) and pay the Postal Service $7.55, for a 2-3 day delivery.

There was a time when a FedEx envelope was affordable. Now a 2 lb FedEx Pak via 2Day service can set you back $20.80 – $35.37, depending on distance. Compare that to a USPS Priority Mail flat rate envelope, delivered to most US addresses in 2-3 days, costs just $5.75.

Need a package to go from one coast to the other? UPS and FedEx Ground will take 5-6 days. USPS Priority Mail will take 2-3 days, and probably cost much less.

It’s no wonder that the USPS saw an 18% jump in its December 2014 deliveries from the year before.

Just when everyone thought that USPS was down for the count, it has done exactly what it needed to do:  reinvent itself and disrupt the entire shipping industry in the process.  Sure, there’s a lot more for it to do, but the USPS is proving that its up to the challenge.

Can FedEx and UPS play catch up? Can they wean themselves off of their pricing models and face their investors?  That would be a challenge.

But then again, there’s no better motivator then self-preservation. Just ask the Postal Service.

Addressing Tip: Handling the Secondary Unit

The USPS has done quite a bit to help mail get through quicker and easier.  The most obvious improvement is using a ZIP code to help direct mail to particular areas of the country.

But providing an uncomplicated, standardized address on the mailing piece can go a long way to making mail move faster.

What can make many addresses complicated is the secondary unit — the apartment or suite number that is added to the address line.

Granted, the secondary unit is usually essential for getting the mailing piece to the recipient.   Without an apartment number, many items would be undeliverable.

The USPS suggests positioning the secondary unit at the end of the address line (ex. “123 Main St Apt 10”).

But when you don’t really have room to do that, they suggest adding the secondary unit above the address line:

Bob Smith
Apt 10
123 Main St
New York, NY 10000

The Post Office also suggests not using the # symbol if you’re using a word followed by a number (like Apt or Ste).

But do use the # symbol if you have no word (like Apt or Ste) before the number.  And when using the # symbol, put a space between it and the number (ex. 123 Main St # 10).

There are a lot of descriptors for secondary units (Room, Apartment, Suite, etc), and many abbreviations that go with them.

The Post Office suggests you select from their list of abbreviations, if abbreviations are necessary:

Description – Abbreviation

Building – BLDG
Department  – DEPT
Floor – FL
Front – FRNT
Hanger – HNGR
Key – KEY
Lobby – LBBY
Lot – LOT
Lower – LOWR
Office – OFC
Penthouse – PH
Pier – PIER
Rear – REAR
Room – RM
Side – SIDE
Slip – SLIP
Space – SPC
Stop – STOP
Suite – STE
Trailer – TRLR
Unit – UNIT
Upper – UPPR

There are two things worth noting about the suggested abbreviations: 1) they’re capitalized, and 2) they do not include periods or other punctuation.

Some of the abbreviations require a number to follow (ex. APT), but some do not (ex. REAR).

By standardizing the use of secondary units, you can help ensure your mail is delivered quickly and efficiently.

New Postage Rates for USPS in 2014

It was inevitable: the USPS postage rates have gone up. First-Class Postcard postage is now $.34 each (up 1 cent from 2013).  The letter rate went up also: now at $.49 for 1 ounce (up 3 cents from last year).  The new rates took effect January  2014. So what will the impact be on the postage costs for our postcard magnets at magnetbyMail.com ?   Our rate for First Class Bulk mail will be 46 cents, Standard Third Class Bulk at 31 cents, and Non Profit Bulk at 22 cents.  (Note- our postcard magnets are not considered automation compatible mail.)

Privatizing the Post Office: the Right Solution?

There have been plenty of ideas bandied about on how to solve the financial problems at the US Postal Service.

Recently, a Bloomberg article from ex-OMB director Peter Orszag (now a vice chairman at Citigroup), suggests that the USPS should go private.

His strongest argument is, by privatizing the Post Office, we remove Congress from the equation. He notes that Congress is unable to manage the USPS since it doesn’t allow USPS managers to make the cuts and raise revenue needed to fix problems.

His argument is compelling, but it’s not necessarily the best answer.

First of all, the Post Office is a service required by the US Constitution. Try making the USPS private, and you’ll need to deal with Article 1, Section 8.

Second, the privatization idea has been used before. It’s been offered as a panacea for everything from schools, to prisons, to highways. But the results are mixed; privatization doesn’t guarantee a better result.

The privatization idea is a red-herring. It’s simply taking us out of one pot of hot water, and putting us into another.

We’ve written about USPS problems in previous posts. An enormous issue, which Orszag did not discuss, is the multi-billion dollar ‘pre-funding’ imposed on the USPS by Congress. Developing a more equitable way for the USPS to save for future expenses would solve most of its financial problems.

The true problem isn’t with the Postal Service. It’s the way we’ve set up Washington.

We’ve set up a system that runs on 100% politics and 0% policy. We allow our federal budgets to be run like shell games — spending future money, papering over current shortages. We have a system designed to protect itself, rather than provide any responsible governance.

The problem isn’t how to fix the USPS. It’s how to fix Washington.

The Downside to EDDM

It’s no fun being the bearer of bad news, but you should know that EDDM, the US Postal Service’s new local neighborhood discount program, may not be your best choice for your next bulk mailing.

Yes, the popular EDDM (Every Door Direct Mail) program has plenty of good things going for it, as we mentioned in our prior post : EDDM: USPS Every Door Direct Mail .

But alas, you should consider some facts before jumping on the EDDM bandwagon for your postcard magnet mailings.  Here are our 4 issues with EDDM:

1) with EDDM there is no name and no address added to your mailing piece. There are plenty of studies that show mailings are more effective if they are personalized for the recipient. Items are more likely to be looked at if they are addressed personally. Without that, your EDDM mail becomes junk mail.

2) EDDM mail is packed into the pile of circulars and other non-addressed mail when its delivered to a mailbox. The pile is considered to be ‘junk mail’ by many. There’s a good chance that, upon arrival, it gets tossed.

3) you need to properly prepare your EDDM items. There’s a USPS site that you’ll need to learn, select from online maps, complete online forms, bundle your EDDM materials with ‘facing slips’ , and deliver your mailing pieces to your local post office.

4) EDDM can cost you more. Sure, the EDDM rate is a low 18 cents per mailing piece. But because EDDM requires a large mailing piece — at least 6-1/8″ x 11″ — the costs for making a postcard magnet go up significantly ($.30 or more). Moreover, these large, plastic laminated postcard magnets need to be shipped to you so you can bring them to your local post office; and freight can add up ($.10 or more).

The good news is that you can solve all these problems by using one of our standard magnet mailers and a saturation mailing list. A saturation list provides addresses for every home or business in a Zip Code or Carrier Route, similar to the coverage you’d get with EDDM. The name and address can be rented for one-time use, for a couple of pennies each. And the post office provides a low rate for saturation, Standard non-automated bulk mailings: about $.23 ea. (as of 6/2015).

When you order your postcard magnets from us at magnetbyMail, we handle the mailing prep for free.  This includes ink jetting the addresses on to each postcard, sorting and bundling your mail, completing the USPS bulk mail forms, using our bulkmail permits, and delivering the mail to the Post Office.

So would you want your postcard magnet to arrive unaddressed, in the middle of the circulars? Or would you rather have it personalized to the recipient and address, delivered as an independent mailing piece, without any hassle on your part, and at far less cost?

We thought you should know.

EDDM: USPS Every Door Direct Mail

If you’ve recently been by a Post Office, or watched a USPS commercial, you’ve probably heard about the new bulk mail program called Every Door Direct Mail (EDDM).

New from the USPS, EDDM is a way for a business to send a mailing piece to all mailing addresses in a particular geographic area for a low cost — 14.5 cents each — and without the need for a list of mailing addresses, or expensive permits.

There are some rules of course.  And since the program is young and the rules are subject to revision, you should visit the USPS EDDM  site to review them firsthand.  Essentially, the USPS EDDM requirements involve quantity, size, layout, selecting from a map and forms.

Here are the EDDM rules:

• EDDM quantity:  for the EDDM Retail program, you’ll need at least 200 pieces , but no more than 5000, in a single day’s mailing.  You can deliver this size of mailing to the front counter at the Post Office in the neighborhood you’re trying to reach.  (Larger mailings can be delivered to a USPS Business Mail Entry Unit.)
• EDDM size requirement: your mailing piece must be rectangular and weigh no more than 3.3 oz. It must be larger than 6-1/8″ in height, OR 11-1/2″ in length, OR more than 1/4″ thick.  But it can be no larger than 12″Hx15″L; or more than 3/4″ thick.
• EDDM layout: the address area needs to located on the top half of the mailing piece.  In this area, you’ll need to print an EDDM Retail postage indicia and a mailing label that includes the phrase:  Local Postal Customer.  There is no name or address added.
• EDDM maps: you’ll need to use the USPS EDDM map site to pick the neighborhoods where your mail should go.  You can choose to exclude business and/or PO boxes from your mailing.
• EDDM forms: the same site that helps you map your mail’s route will also provide you the mailing forms you’ll need to take with your mailing to the Post Office.  And you’ll also receive facing slips that you’ll attach to bundles of your mailing pieces.

So there are several benefits of EDDM:

• low-cost postage
• no mailing list to purchase
• no expensive bulk mail permit; and no complicated mail sorting

With EDDM,  local businesses now have a way of sending their messages into their communities in a way that is cheaper and easier than standard bulk mail.

Although the regular postcard magnet mailers we produce at magnetbyMail are too small for the USPS EDDM program, we can customize a mailer that fits your size and budget.  Be sure to use our magnetbyMail contact form to ask for a custom quote for your EDDM project.