On July 6^th, 2010 the USPS filed an exigency rate case with the PRC.  The PRC has until October 4^th, 2010 to respond and can approve as is, deny the request, or approve based on recommended changes.  The USPS is requesting that the proposed changes go into effect January 2, 2011. 

 With a revenue shortfall of an estimated $7.0 billion for 2011, the USPS is taking a multi-pronged approach.  The proposed Exigency rate increase will add approximately $2.3 billion in new revenue for the USPS, but still leaves $4.7 billion in shortfall. 

For the longer-term fix to the USPS’ financial issues, The USPS will also continue their efforts to encourage Congress changing, and in some cases removing legislation that prevents the USPS from “right-sizing” their business.   

As noted, the proposed Exigency rate increase not only includes rate changes, but also adds a couple on incentives to grow mail, new mail classifications and regulations changes. 

Now that we have a better understanding as to why the USPS submitted this proposed Exigency rate increase, let’s focus on the actual changes proposed

 Proposed Price Increase:

The average proposed price increase across mailing products is 5.6% (generally running 4 – 6% but there are some exceptions). 

 First Class:

• Letter – price increase range 4.5 – 6.3%
• Flat – price increase range 4.5 – 16%
• Parcel – price increase range 32 – 53.3%

–        Parcels (same price for 0 – 3oz)

–        Split FCM parcels into two categories

• Retail FCM parcels
• Commercial FCM parcels

Standard Class:

• Average price increase of 6.2%

–        Price Increase ranges 4.4 to 23.3%

–        Flats average increase of 5.1%

–        Not Flat Machinable (NFM) category goes away

• NFM/Parcels become Standard Parcels

–        Fulfillment Parcels

–        Marketing Parcels

• Heavy Automation Letters

–        New formula to pay flats piece and pound rate with discount tied to the non-dropshipped entry point and applicable density tier

• Standard Mail Flats

–        Automation prices for rigid flats is eliminated

Package Services:

• Average price increase of 6.8%

–        Bound Printed Matter (BPM) flats proposed increase of 5%

–        BPM parcels, single piece Parcel Post and Media/Library mail at 7%

–        Elimination of half-pound pricing for nonpresorted BPM parcels

–        BPM single piece weights rounded off to two decimals verses the current 4 decimals

Periodicals:

• Average price increase of 8.0%
• Proposed Periodicals Origin Pallets increase of 21%

Special Services:

• Confirm

–        Proposed increase of Platinum level of 25.6%

–        Proposed increase of Bronze and Silver levels of 4.0%

• Elimination of Stamped Envelopes bearing a Standard Mail stamp
• Changes to the PO Box handling Fee

Incentives:

• Reply Rides Free

–        BRM and CRM included in envelopes up to 1.2 ounces ride free

• Qualifying pieces must be automation First-Class letters
• Must use the Full-Service IMb
• Mailer will pay the 2oz rate and be credited the 2nd oz charge for qualifying pieces

–        2011 Saturation and High Density Mail

–        Discount / Credit on pieces exceeding volume thresholds

–        Commercial Saturation letters and flats – 22%

–        High density letters and flats – 13%

–        Non profit letters and flats  – 8%

Move Update:

• Move Update Performance Based Verification (PBV) Threshold Tolerance

–        Reduce from 30% to 25%

• $.07 per piece fee for failed pieces

The campaign, “Getting Started in Catalogs,” includes an instructional DVD and a free live webinar series that show how catalogs — when used as an extension of a company’s Internet-shopping portal — can increase online purchases.

 The DVD features testimonials from widely recognized companies such as Dell and Zappo’s, businesses that became leaders by adding catalogs to their marketing mixes.

 The first of the 3 free webinars will be tomorrow, with tutorials on catalog production and the smartest and most cost-efficient ways to produce a catalog. Additional webinars will be held July 28 and Aug. 24. Follow-up support from USPS sales personnel also will be available for customers.

 Please remind your fellow PCC members and local retailers about the campaign. Customers interested in growing their businesses through the use of catalogs can click here to learn more about the catalog campaign, order the free DVD and register for upcoming webinars.

 We all know catalogs are a proven medium for driving transactions and increasing customer loyalty. We want to be sure every retail business owner knows that as well.

Postal Open Forum- Reviewing the Proposed Changes of the Mailing Standards

Register Now!

Here  is the link to the Federal Register Notice for the proposed mailing standards submitted to the PRC by the USPS today. 

 http://www.gpo.gov/fdsys/pkg/FR-2010-07-09/html/2010-16810.htm

SUMMARY: In July 2010, the Postal Service filed a notice of mailing services price adjustments with the Postal Regulatory Commission (PRC), effective in January 2011. This proposed rule provides the mailing standards that would accompany the new prices in 2011.

 DATES: Comments must be received on or before August 9, 2010.

In my email yesterday regarding USPS’s proposed changes – one of the things I mentioned was the “Reply Rides Free” incentive. I thought I would provide a bit more insight as to what this is and what it means to us.

 The “Reply Rides Free” program provides an incentive for mailers to include more content in their Automation First-Class Mail letters by providing a postage credit for the extra weight. A mailer who include Business Reply or Courtesy Reply Envelopes or Cards in their First Class Mail piece would be able to add 2/10’s of an ounce – FREE. Mailers would pay for the First Ounce and, basically, USPS would pay for the price of the mailing the Reply Mail and/or promo piece  (the additional 2/10 oz.).

 Although this new program, “Reply Rides Free”, is generally in context with Reply Mail as the “Free 2/10 oz.”, mailers could also use it to Promote Products (Transpromo), provide additional information to customers or to Cross Promote. With additional room for Promotional or Advertising Messages, mailers can turn a business expense into a Profit Center by selling the Inserts to other advertisers.

 Now besides USPS promoting First Class Mail volume with this incentive – one of the “requirements” that can promote our MAIL360 is that the credit applies to First-Class Mail letters mailed under “Full-Service” IMb!

 At fist read – the requirements seem a little ambiguous – as in one place USPS talks about using the 2/10 oz. for promotional inserts and then in another they say that a BRM/CRM has to be included in the outbound mailpiece ??? What I believe they are saying – and it does have a bit of logic to it – is that as long as their is a BRM/CRM envelope included, which many mailers already include today – and mailers typically stay within/under the 1 oz. – then the mailer can use the additional “Free” weight for the promotional insert, etc.

 The USPS “Reply Rides Free” Requirements:

 1)    First-Class Mail Letters mailed under Full-Service Intelligent Mail

2)    Weighing more than 1 ounce up to 1.2 ounces qualify for 1 ounce price

3)    Include a Courtesy or Business Reply, Card or Envelope. The reply piece may be in the format of a reusable envelope.

4)    Meet threshold based on previous year’s volume

5)    Permit Reply Mail is not eligible for this program.

6)    The “Reply Rides Free” program will run from 1/2/2011 through 12/31/2011.

 Now there is a slight caveat to this – USPS is going to “Credit” the customer “after” the mailing. So at the time of mailing, the mailer pays the applicable 2 oz. price for these mailed pieces. And then credit back the amount paid for the 2nd oz. and mailpieces mailed during the 2011 calendar year when the Mailer’s Volume of Commercial Automation Letter-Size First-Class Mail meets a “pre-determined volume threshold”. All letter-size volume counts towards meeting the overall mail volume; however, only those letters mailed under Full-Service Intelligent Mail will be eligible for postage credit.

 I’m not clear on what the “pre-determined volume threshold” means but the “win-win” logic for the USPS by adding the requirement that the mailpiece has a BRM/CRM included is that USPS will get additional, incremental postage when the Reply Mail is sent back by the customer.

 Note: This is how “I” understand the  “Reply Rides Free” program however I’m sure as the year goes on – we’ll hear a lot more about this and as well as the other “proposed” 2011 changes.

~ Maura Betler – July 2, 2010

After a rough start to 2010, the USPS® has earned some serious bragging rights. According to this press release, the Postal Service is the most trusted governmental agency in the United States.

Ponemon Institute surveyed 9,000 Americans about perceptions of how the U.S. government collects and uses information gathered about its citizens. The survey included questions about whether we think that the government takes necessary steps to protect our privacy rights.

“While overall trust in the government declined this year, trust in the U.S. Postal Service remains at an all-time high,” said the institute’s chairman, Larry Ponemon, chairman and founder of the Ponemon Institute. 

The USPS®, reports to handle “40 percent of the world’s card and letter volume and delivers more mail to more addresses in a larger geographical area than any other post in the world.” 

That’s a lot of information to protect.

At the recent Mailers Technical Advisory Committee (MTAC) update, there were several topics of significance being discussed which is what happens at MTAC.  Hot topics such as the Intelligent Mail barcode, Sarbanes Oxley (SOX) and even hints of Seamless Acceptance.

 As I step back and consider the theme of the recent Postal Service messaging and certainly the theme of MTAC, it is largely about the USPS working to have electronic submission of postage statements and to be able to verify and validate the accuracy of the statements as well as the quality of the physical mail.

 This is may be subtle at this time, but I caution us all not to overlook the significance of what the USPS is messaging to us in various ways.

 For example, we know that seamless acceptance is back in public discussion (it went quiet when the industry pushed back in the early IMb days).  With Tom Day’s recent statement about the IMb being used to determine address quality, this ties it all together for me in terms of what the USPS plans to do – and again, has informed us in differing ways. 

 I’m confident that the USPS has every intention of driving mailers to use electronic documentation (i.e., full-service IMb, the recent edoc requirement for comailers and copallitization mailers, and talk of seamless acceptance).  The benefits to the USPS are obvious so we can see why they would like us to get there. 

 This does raise an interesting point about how the USPS feels about the basic IMb implementation verses full-service and what it means to their ability to provide service measurement and reporting as well as address quality validation.  Certainly something to think about.

 So what can mailers do in anticipating the impact of the USPS initiatives in this area?  I suggest the following:

• Contact your Pitney Bowes representative at 800 123-1234 and put together a plan to review all possible feedback from the USPS (i.e., PBV, MicroStrategy Reports, etc.) and determine current levels of errors from the industry as well as errors from the USPS.  These discussions would be held in confidence as we recognize that we are sharing information that might reflect poorly on the processes in the event of a single poor mailing 
  • The critical point in this exercise is to determine how well positioned you are to meet the ever growing challenges of complying with the USPS initiates of moving to seamless acceptance and total address quality.  If we don’t manage this process, we will be continuously squeezed and the cost of compliance violations, appeals process and overall anxiety will grow – and none of us needs the additional pressure.

 Again, while there are lots of really important issues being discussed, we should take a step back and look at the bigger picture of where the USPS is going, and the likely short timeframe in which they will feel the need to get there.  We already know that they are under severe financial pressure, so every means of reducing their operating costs is on the table.

Billing & OSS World, Washington, D.C. — The black hole of the United States Postal Service is not theoretical. Nor is the revenue lost over its event horizon due to the uncertainties and duplication created by the unknown variables of mail-delivery status.

Kevin Conti, director of mailing solutions at Pitney Bowes Business Insight, delivered his own message Wednesday at the Billing & OSS World Conference & Expo about eliminating that black hole. And it was free of the uncertainty of messages delivered by the USPS. His message was unambiguous: Billers are wasting too much time, money and resources on redundant, inaccurate and unknown factors regarding the disposition of a piece of mail.

Historically, billers lack the visibility to determine the delivery rate of mail without intelligent bar coding and even then there are challenges and limits. However, the new USPS barcode – to which compliance will be required by May of 2011 –contains a unique ID, which can be used for tracking not only the destiny of a piece of mail, but potentially all the customer, destination and other relevant data associated with it.

“Knowing when a mail piece was being delivered can solve a lot of business problems for you,” Conti said.

Even basic information, such as whether or not a returned piece of mail is being rejected for the first time or the fifth can save billers huge sums of money. In some cases, Conti said, rather than returning or re-processing a piece of mail, its importance may warrant a disposition of the piece (throwing it away rather than re-processing.)

It also is helpful to understand not just the disposition of a piece of mail, but the history and characteristics of the payer so that billers can develop patterns of behavior that will allow them to treat different customers differently.

Knowing this information can help billers (or service providers) know their users better — or at all. It can help billers predict daily payment values with inbound remit visibility and analyze the payment patterns of the less disciplined user. Barcodes now allow customers to get status updates on, say, their customer status, the complete customer record in cycle, present method, premier method account status and history.

In too many cases, billers know within one to two days that a piece of mail is undelivered, but they seldom know why.

“This leads to a very high recidivism rate,” Conti said. “Fifty-one percent of returned mail has been returned before. Without this insight they miss a lot of actionable intelligence that can help them eliminate the cost of re-handling this mail.

This insight also would allow the biller to identify patterns in a customers’ payment behavior. Not knowing if a payment is on its way or whether or not a bill was every actually received can lead to a high instance in pre-mature disconnection, which costs $25 to $75 to reconnect. Fifteen percent of these can be eliminated, Conti said.

“Customer service has a lot of blind spots,” Conti said. And not using the intelligent barcode can lead to multiple re-printing, redundant mailing and other unnecessary processing.

However, he cautioned that billers can’t rely on the postal service to make the intelligent barcode do all it is capable of doing. By itself, the code simply tracks the mail piece. It is up to the biller to assign usable customer data to the bill or other mail piece

Business Customer Gateway -including PostalOne! for both internal and external USPS customers- Sunday May 30 4am – 8am CST
full outage, inaccessible for use

FAST- Sunday May 30 4am – 8am CST
system completely unavailable for hardware replacement

Confirm Service - Sunday May 30 4am – 8am CST
full outage, website inaccessible
FTP data transmissions will be unaffected and happen at their regularly scheduled times

I attended our recent user conference better known as PBBI Insights.    It was great having many of you joining us in Miami!  With so many dynamic changes in technology, market trends and organizational requirements, we felt the best way to meet the expectations of our customers was to adopt a new format.  This year we featured three unique forums for in-depth coverage of specialized core business topics, including the Customer Communication Management (CCM) Forum, Location Intelligence Forum and the Everything Postal Forum.

This has been an exciting year for us.  During the conference Mike Hickey, our CEO, delivered the starting conference keynote  and presented our changing strategic direction to embrace cloud computing – with an objective of enabling our customers to better serve their customers. He also discussed how PBBI is shifting away from just offering platforms, tools and content to solutions that help customers more easily acquire, serve and increase the numbers of customers through tactics of targeting, acquisition, collaboration and retention. He pointed out how PBBI offers a range of location intelligence, data quality and integration, address management and communication technology products to support this new direction. 

Covered in other keynote presentations throughout the conference were other exciting new developments.  One of which, Stratus;  an online application that makes location intelligence available in  SaaS.   Customers’, Dick’s Sporting Goods and Pepperidge Farms each presented how Stratus provides a simple upload for files used for publishing and sharing  and how these organizations were embracing this new technology.

Another new initiative that launches late June with the new release of MI Pro v.10.5 is our new Data as a Service offering.   Users of the latest version of MI Pro will now be able to directly access an expansive data marketplace.  Available as a web service later this year, this offering basically responds to the need to easily access global data, any time – anywhere; right from your desktop.  Scott Robinson, our global portfolio director for data products demonstrated how customers could drill down to a specific designated area, simply by selecting an area visually within Bing maps – enabling customers not only easy online access to data but also providing them a platform to purchase only data required.  He went on to discuss this project’s content management library, which can be managed in a hosted Internet environment or as an on-premise appliance;  making it easier to build a historical warehouse of location and demographic content.

Within the other areas of PBBI, both Customer Communications Management and Enterprise Address Management provided a comprehensive selection of sessions that covered updated product information, industry insight and hands on sessions.   Our postal focused customers opened Insights with in-depth information on USPS updates and its future direction from Bob Gallaher,  Manager, Business Mail Acceptance, US Postal Service  and our own postal expert, David Robinson. 

Insights aligned extremely well with our focus on helping organizations locate, connect and communicate with their customers efficiently with integrated, easy to use tools that are cost effective and accessible 24/7, for businesses large and small. 

I thought that Mark Smith – CEO & EVP Research for Ventana Research, who attended this year’s Insights provided an excellent summary of the event in his article ‘Pitney Bowes Business Insight Takes Its Business and Location Intelligence into the Cloud’  http://www.ventanaresearch.com/blog/commentblog.aspx?id=3769

Miami was a great way to kick off the entry into summer too….but as I was flagging down a taxi to catch my flight, I realized I had not stepped foot outside the hotel my entire visit, there was just too much happening at Insights this year.  Note to self:  Schedule a day off following Insights next year!