With the holiday season quickly approaching, companies who ship packages will have one more thing to add to their plate: The United States Postal Service® (USPS) will implement new shipping requirements that will affect 90% of the 3.5 billion packages delivered annually.
Starting in January 2016, the USPS will require all parcel shippers to ensure the accuracy of delivery addresses through Delivery Point Validation. Currently, only 87% of packages are compliant and shippers are likely unaware of which addresses comply and which do not. In addition to the 9.5% price increase already set to go into effect on January 17, 2016, the USPS will extend the projected $0.20per piece non-compliance fee to each parcel address that does not verify.
The new requirements will have a major impact on operating costs and profit margins. The USPS has not yet announced an industry threshold, but based upon 2014 parcel volumes, if all non-compliant parcels were fined, it would total over $55 million in new non-compliance fees. That number will only increase as the shipping industry continues to grow. According to the USPS quarterly report, the USPS saw a 14.4% overall increase in packages in Q2, 2015.
"Address quality is suddenly becoming a critical component of managing shipping costs," said Bob Schimek, Senior Director of Postal Affairs for Satori® Software. "Address validation can be done at many points in the fulfillment process, but best business practices validate the address at the point of order entry."
As an example, a large online retailer that ships over 212 million packages via USPS, could potentially face over $3.4 million in fines if the same non-compliance percentage applied.
To avoid these fines, all shippers must use a USPS CASSTM (Coding Accuracy Support System) certified product which improves the accuracy of the address, to comply.
About Satori Software
Satori® Software, a Neopost company, provides certified solutions – for mail preparation and contact data quality use. From simple-to-use desktop software to integrated enterprise solutions and hosted service offerings, Satori Software powers over 15,000 organizations from small print shops to Fortune 500 companies. For more information visit: www.satorisoftware.com/learn-more/new-postal-regulations-on-packages
