Think Outside the Box to Reduce Your Postage Costs
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 For the U.S. Postal Service, 2007 signals the end of its outdated rate system.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.