On April 17, new pricing for USPS Mailing Services products went into effect. This includes First-Class Mail (FCM), Standard Mail, Package Services (Media Mail, Library Mail, Bound Printed Matter, Parcel Post), Periodicals and Extra Services. And while shippers might have easily dismissed this rate change assuming that it mostly applied to letter and flat-size mailpieces, shippers of lightweight packages might want to take a look.

Mailing Services products are limited to a price ceiling called the Consumer Price Index (CPI). The April price change per class of mail was limited to 1.74%; however, the areas of highest impact included FCM Flats (5.343%) and Standard Mail parcels and Not Flat-Machinables (11.3%). In addition to price changes, there were two key changes to FCM parcels: the rating structure and the introduction of new commercial pricing categories.

Effective April 17, the first three ounces in each FCM parcel category are the same price. Parcels weighing up to and including three ounces will all pay a single price. The additional ounce price of 17 cents will apply after the first three ounces. 

Prior to April 17th, there were two price categories for FCM parcels, Retail and Commercial. Retail prices applied to single FCM parcels, and mailers that met certain preparation and volume requirements qualified for Commercial prices. Effective April 17th, Commercial FCM parcels is split into two categories, Commercial Base and Commercial Plus — both offering single-piece and presorted pricing options. 

Shippers can qualify for single-piece Commercial Base pricing when using an approved postage payment method. These include permit imprint, IBI (Information Based Indicia) meters that electronically transmit transactional data to the USPS, and PC Postage. In this case, there is no minimum volume requirement unless the shipper is using a permit imprint, which requires a minimum of 200 pieces or 50 pounds. Postage per piece is 15 cents less than that of Retail pricing at the same weight. For presorted Commercial Base pricing, the mailer must meet the 500 piece minimum as well as other preparation requirement. 

This new FCM Commercial PLUS category is most interesting -- and for the right applications, could save shippers significant dollars. The PLUS category is designed for machinable parcels that weigh over 13 but less than 16 ounces, although packages may weigh as little as 3.5 ounces. You may recall that the maximum weight of FCM is 13 ounces, and pieces weighing more than 13 ounces fall into Priority Mail. However, under this new FCM Commercial Plus pricing category, parcels may weigh up to (but not including) 16 ounces!

For the single-piece and presorted Plus pricing options, the shipper must use a permit imprint and meet other requirements. These include mailing more than 5,000 machinable parcels at Commercial Plus prices each year, electronic postage statements and the correct inscription on the package 

In addition to this unique weight limit for Plus parcels of just less than one pound, the pricing for FCM Commercial Plus parcels is unique. A fixed Commercial Plus price is charged at a single-piece price and each of the presorted price levels. The single-piece price is $3.89, and for presorted Plus parcels, the 5-digit, 3-digit and ADC prices are $3.21, $3.41 and $3.61 respectively and single-piece Commercial Base price for a 13 ounce parcel is $3.26. A package exceeding 13 ounces would fall into the Priority Mail category so let’s assume $4.75 for a Commercial Base Priority Mail flat-rate envelope. That’s $1.50 more in postage. Whereas, postage for a qualifying FCM single-piece PLUS parcel is $3.89 – reasonable middle ground.

Savvy shippers will want to take inventory of all their lightweight shipments. As a means to mitigate expenditures and avoid carrier accessorial charges, shippers may consider moving to this new FCM Plus category for parcel shipments that fall into the sweet spot of greater than 13 ounces but less than one pound. 

Next issue, I will discuss the PRC’s recent approval to the Postal Service’s request to move commercial First-Class Mail parcels to the Competitive Product (Shipping Services) category. 

Elizabeth Lombard, Manager, Certifications and Postal-Carrier CMDSM, CMDSS, MDC, MDP, EMCM
Enterprise Learning and Development
Pitney Bowes Inc 

Sidebar: Strategies
While the most significant increases apply to First-Class Mail flats, Standard Mail parcels and Not Flat-Machinables, mitigating postage increases in general includes the re-design of mailpieces, i.e. parcels to flats, flats to letters, and implementing solutions to prepare mailings at automation prices.

Leveraging technology to gain delivery information of mailpieces and packages electronically may not only reduce fees, but also improve processes and enhance communications. Use of the electronic options of Delivery or Signature Confirmation™ service, or electronically-filed Certified Mail™ with electronic Return Receipt as alternatives to the traditional Certified Mail™ or Certified Mail™ with the “green card” Return Receipt may serve as cost-saving options in many applications. 

April 17th price information can be downloaded via Postal Explorer http://pe.usps.gov/default.asp. Click on the link in the left blue navigation frame under “*New* April 17, 2011 Pricing Information.” Please note the USPS usually posts the new Notice 123 Price List just prior to, or on the effective date of the price change.

Contents of website subject to change.

Please watch for additional information, strategies and tools from Pitney Bowes. Also check out our Ways to Save section on http://www.pb.com/postal-information/  

Elizabeth Lombard CMDSM, CMDSS, MDC, MDP, EMCM
Certified Mailstream Consultant (CMC) – Gold Level
Manager, Certifications and Postal/Carrier
MSM Learning & Performance, Pitney Bowes Inc.
Every connection is a new opportunity™

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