After more than 20 years of service, the venerable POSTNet barcode on envelopes for automating and sorting mail retired on January 28. The Postal Service now requires that mailings have at least Basic-Service Intelligent Mail barcodes (IMb) to qualify for automation discounts. Mailers will need to switch to Full-Service IMb by January 2014 to receive maximum discounts at that time. Even though the Postal Service provided a lengthy lead time and a good deal of education on the discontinuance of the POSTNet barcode, the IMb requirement undoubtedly caught some smaller mailers by surprise. At the start of the New Year, less than half of commercial mail contained an IMb, suggesting a sizable number of mailers still needed to make the switch. While large commercial mailers were early adopters of IMb, many mid-sized and smaller mailers were hesitant to make the commitment and investment. Basic-Service IMb is not as big a step as the move to Full-Service IMb but it also yields fewer benefits. Full-Service Intelligent Mail will allow mailers to receive richer data about their mailings, but requires them to invest in hardware and software changes. The Postal Service wants to give mailers an incentive to make the conversion. It has proposed a one-time credit ranging from $2,000 to $5,000 to customers that make the conversion to Full-Service IMb. The credit would be based on the number of pieces the customer sends in a year. In an October Federal Register notice, the Postal Service laid out its proposal and further details are expected in a final rule. Is an incentive necessary to get mailers to invest in Full-Service IMb? If you are a mailer, do you plan to take advantage of the incentive?
on Feb 18th, 2013
in Pricing & Rates
| 6 comments
on Aug 20th, 2012
in Pricing & Rates
| 5 comments
Since the beginning of the Post Office and the Postal Act of 1792, certain types of mail have qualified for lower postage through preferred rates. It was assumed that these types of mailings yield social benefits for senders, recipients, and more importantly, a large nation. Preferred rates’ roots trace to the first federal postal policy, which recognized that disseminating newspapers at below-cost postage would advance the important social goal of educating the electorate. Soon after, magazines received special rates. For its first 50 years, the Post Office was predominantly a newspaper circulation service, because of the high cost of sending letter mail. (Sending a one-sheet letter 500 miles cost 25 cents, while sending a newspaper that distance cost only 1½ cents.) As the Post Office evolved over the next century, so too did the rates it charged for various types of mail. Regular letter mail rates were lowered to be more in line with the newspaper rate. Still, Congress considered a preferred rate for socially important mail to be so crucial it extended eligibility to more types of mail. A class structure was introduced to organize the types of mail. In 1894, Congress allowed nonprofit organizations to send their publications at second-class rates, the rates for newspapers and magazines. That statutory language evolved to create the nonprofit subclass in Second Class, a class now known as Periodicals. In the late 1920s, Congress added Library Mail as a preferred rate for mail sent to or from libraries. In the 1930s, President Roosevelt created a preferred rate for all books that is now known as Media Mail. In 1951, after 2 years of deliberation and strong appeals by charities and philanthropic groups, Congress created a nonprofit subclass in Third Class, today’s Standard Mail. When all of these preferred rates were established, congressional appropriations funded the Postal Service’s operations. And even until 1993, Congress appropriated funds to reimburse the Postal Service for revenues it lost by providing below-cost rates for certain types of preferred mail. Today, the Postal Service receives only a small appropriation for free mail for the blind and overseas voting. All other costs are borne by mailers. At times, Congress has reconsidered the public policy benefits of preferred mail in light of the potential for abuse and in consideration of the Postal Service’s financial condition. As we again dive into reform of the Postal Service, is it time to reconsider the modern application of preferred postage rates? Since the Postal Service uses revenues from postage to fund operations, can it afford to offer some types of mailings reduced postage through preferred rates? Or, does the nation continue to benefit when certain types of mail qualify for preferred rates? How should preferred categories be selected? Do you agree with the current categories or should other types of mail qualify for preferred rates?
on Apr 23rd, 2012
in Post Offices & Retail Network, Pricing & Rates
| 9 comments
Generally, most consumers know the rates for mailing a 1-ounce First-Class® letter. However, many don’t know the prices of other postal service offerings, such as certification, insurance, or return receipt. In some instances, some of these services must be bundled with the mailing type. Posting the rates for the more commonly used services in a convenient spot in the Post Offices would let customers know approximately how much services cost, allowing them to make informed decisions. For example, displaying rates for the first several ounce increments of First-Class mail, as well as the most commonly used rates for Express Mail and Priority Mail along with the rates for certification, insurance, and return receipt, would help mailers calculate the total purchase price. Easy access to this information would allow mailers to effortlessly make price comparisons with other providers and clearly reveal the true value the Postal Service provides to consumers. What do you think? How can the Postal Service present prices in the most effective way?
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