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The new year marks a fresh start, a time for new beginnings. For the U.S. Postal Service, 2007 signals the end of its outdated rate system.
In just a few months, the USPS is expected to overhaul its pricing structure. The current system uses weight alone to determine postage rates. Beginning in May, the shape of a mail piece also will affect rates, doubling postage in some cases.
The new system will come as a shock to the unprepared. But many fulfillment companies have taken a proactive stance, educating their clients on the upcoming changes and offering cost-effective packaging options.
“We’re starting the conversation now so they know the availability of different options,” says Christine J. Erna, executive vice president of Fulfillment Plus Mailing Solutions Inc. “The more information people have on what options are available, the better prepared they are to make an educated choice.”
Automation-friendly packaging holds the key to minimizing postage fees. Eighty-seven percent of postage costs cover the human processing factor, according to Erna, who worked for the USPS for 18 years before joining the private sector. “The more [the USPS] can automate and reduce [its] costs, the less frequently [it has] to raise rates,” she explains.
Cut Size to Cut Costs
Downsizing mail class—from parcels to flats and from flats to letters—can reap significant savings. Under the new rate structure, lightweight boxes and padded mailers see a huge postage increase in the parcel category.
Boxes ship as parcels because of their rigid structure and will see a 15 percent to 40 percent price jump, depending on weight. Postage for a six ounce box, for instance, will increase 26 percent, from its current rate of $1.59 to the new price of $2.
Padded mailers also ship as parcels. Under the proposed regulations, flats must meet specific guidelines for flexibility and uniform thickness to ensure automation compatibility. The cushioning material in a padded envelope adds 1/4˝ to 3/8˝ to the overall package thickness, which typically pushes it over the 3/4˝ limit for a flat. In addition, padded envelopes usually don’t pass the uniform thickness test because the contents shift. (Securing the contents with additional material makes the package even thicker.) With the new pricing, a padded envelope weighing three ounces soars from its current rate of $0.87 to $1.40—a 61 percent jump.
Clearly, the USPS’ push for automation offers hefty incentives for companies to use expanding envelopes or paperboard mailers (think courier envelopes) to ship small, lightweight items like books, brochures, catalogs, CDs and DVDs. Both options can ship as flats, rather than parcels.
Businesses also can achieve savings by converting flats to letters. Folding letter-size documents in half and mailing them in 6˝ x 9˝ envelopes downsizes their postage classification, an effective solution for financial institutions and other firms that currently mail flat statements. Companies that ship CDs can realize the same postage reductions by using special mailers that qualify as letter pieces.
Passing the “Flex Test”
As mentioned above, the USPS will be implementing specific guidelines for flexibility and uniform thickness. Even if the dimensions of a mail piece qualify it as a flat, the piece also must comply with the following standards to ensure compatibility with automated processing machines.
To test flexibility for pieces longer than 10 inches:
• Place the mail piece on the edge of a table or other flat surface, extending its length five inches beyond the edge.
• Press down at a central point about an inch away from the extended short edge of the mail piece, using steady pressure. The piece meets flexibility requirements if it bends at least two inches without damage.
To test flexibility of pieces shorter than 10 inches:
• Repeat the process used to test mail pieces longer than 10 inches, but extend the piece one-half of its length beyond the surface edge before pressing down. The piece meets flexibility requirements if it bends at least one inch without damage.
In addition, the contents of the flat must remain uniformly thick. That’s easy enough when sending catalogs or books that fit snugly in the envelope. But smaller items or those of varying thickness require additional padding or some other method to secure them and ensure they don’t shift during processing.
Some companies are developing creative ways to bypass the flexibility requirements, including envelopes specifically designed to accommodate the new pricing structure. Other options use void-filling materials to meet the uniform thickness mandate.
Reconfiguring packages to meet these standards may take time, but the cost savings will more than make up for the extra effort.
Bob Makofsky is general manager for Conformer Expansion Products. He can be reached at (516) 504-6300, ext. 307. For more information about the company and its automation-friendly expanding envelopes, visit http://www.conformerinc.com
In just a few months, the USPS is expected to overhaul its pricing structure. The current system uses weight alone to determine postage rates. Beginning in May, the shape of a mail piece also will affect rates, doubling postage in some cases.
The new system will come as a shock to the unprepared. But many fulfillment companies have taken a proactive stance, educating their clients on the upcoming changes and offering cost-effective packaging options.
“We’re starting the conversation now so they know the availability of different options,” says Christine J. Erna, executive vice president of Fulfillment Plus Mailing Solutions Inc. “The more information people have on what options are available, the better prepared they are to make an educated choice.”
Automation-friendly packaging holds the key to minimizing postage fees. Eighty-seven percent of postage costs cover the human processing factor, according to Erna, who worked for the USPS for 18 years before joining the private sector. “The more [the USPS] can automate and reduce [its] costs, the less frequently [it has] to raise rates,” she explains.
Cut Size to Cut Costs
Downsizing mail class—from parcels to flats and from flats to letters—can reap significant savings. Under the new rate structure, lightweight boxes and padded mailers see a huge postage increase in the parcel category.
Boxes ship as parcels because of their rigid structure and will see a 15 percent to 40 percent price jump, depending on weight. Postage for a six ounce box, for instance, will increase 26 percent, from its current rate of $1.59 to the new price of $2.
Padded mailers also ship as parcels. Under the proposed regulations, flats must meet specific guidelines for flexibility and uniform thickness to ensure automation compatibility. The cushioning material in a padded envelope adds 1/4˝ to 3/8˝ to the overall package thickness, which typically pushes it over the 3/4˝ limit for a flat. In addition, padded envelopes usually don’t pass the uniform thickness test because the contents shift. (Securing the contents with additional material makes the package even thicker.) With the new pricing, a padded envelope weighing three ounces soars from its current rate of $0.87 to $1.40—a 61 percent jump.
Clearly, the USPS’ push for automation offers hefty incentives for companies to use expanding envelopes or paperboard mailers (think courier envelopes) to ship small, lightweight items like books, brochures, catalogs, CDs and DVDs. Both options can ship as flats, rather than parcels.
Businesses also can achieve savings by converting flats to letters. Folding letter-size documents in half and mailing them in 6˝ x 9˝ envelopes downsizes their postage classification, an effective solution for financial institutions and other firms that currently mail flat statements. Companies that ship CDs can realize the same postage reductions by using special mailers that qualify as letter pieces.
Passing the “Flex Test”
As mentioned above, the USPS will be implementing specific guidelines for flexibility and uniform thickness. Even if the dimensions of a mail piece qualify it as a flat, the piece also must comply with the following standards to ensure compatibility with automated processing machines.
To test flexibility for pieces longer than 10 inches:
• Place the mail piece on the edge of a table or other flat surface, extending its length five inches beyond the edge.
• Press down at a central point about an inch away from the extended short edge of the mail piece, using steady pressure. The piece meets flexibility requirements if it bends at least two inches without damage.
To test flexibility of pieces shorter than 10 inches:
• Repeat the process used to test mail pieces longer than 10 inches, but extend the piece one-half of its length beyond the surface edge before pressing down. The piece meets flexibility requirements if it bends at least one inch without damage.
In addition, the contents of the flat must remain uniformly thick. That’s easy enough when sending catalogs or books that fit snugly in the envelope. But smaller items or those of varying thickness require additional padding or some other method to secure them and ensure they don’t shift during processing.
Some companies are developing creative ways to bypass the flexibility requirements, including envelopes specifically designed to accommodate the new pricing structure. Other options use void-filling materials to meet the uniform thickness mandate.
Reconfiguring packages to meet these standards may take time, but the cost savings will more than make up for the extra effort.
Bob Makofsky is general manager for Conformer Expansion Products. He can be reached at (516) 504-6300, ext. 307. For more information about the company and its automation-friendly expanding envelopes, visit http://www.conformerinc.com
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