The USPS Might Just Be Onto Something – A Postage Sale!


Last week, word quickly spread that the USPS is looking to offer a “summer sale” on postage for large volume mailers of Standard Mail, pending Postal Regulatory Commission (PRC) approval.

Friends and readers, if this is true, I’d have to say that for the first time in my career in direct marketing, the people running the USPS may be thinking like businesspeople and not as a bureaucracy.

Having gotten the following details from a mailing industry source closely involved in the negotiations with the USPS, here’s the major takeaway point: The idea is to reduce postage pricing for standard and letter mailers who increase their mail volume during the third calendar quarter of 2009 (July through September).

The idea for this “mail sale” came through Mailing Industry CEO Council meetings with Postmaster General Jack Potter. Last Friday, the postmaster general convened a smaller group of CEOs from the printing and paper industries to discuss the reactions of mailers surveyed about discounted pricing for incrementally increased volumes above an established baseline. The meeting was very productive, ending with a concept on how to stimulate mail volume during off-peak times.

To qualify for the reduced postage rate, a calculation would be performed to determine the change in a mailer’s applicable USPS volume in two specific time periods, and the variance in the number of pieces mailed between Period A and Period B would be the baseline for determining the minimum required mail volume to qualify for the discount.

Again, the program would apply to all standard mailers and letter mailers of any size — even those who may already have increased their volume. 


The USPS is going to recommend a discount ranging somewhere between 20 percent and 30 percent for this program, but we won’t know the final percentage until the time of the filing. The proposed “test pricing” will be presented to the PRC within the next three weeks. The PRC then has 45 days to rule on the proposal. If it passes, the reduced rates are anticipated to be in effect July 1 through Sept. 30. It’s possible, however, that these dates will change before implementation.

There have also been discussions about possibly repeating this “mail sale” pricing in other off-peak times in the future, perhaps in early 2010.

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7 Responses

  1. FInaly the USPS gets it – this is the only way to kick start the engine that THEY stalled over the last 2 years with those large bulk mail increases.

  2. The reduction in direct mail is on such a self imposed downward spiral! Raise the price of postage, less mail, raise the price, even less…and so on!

    So glad to hear that they are using some thought on this now!!! Would like to see reductions on ALL the postage to stimulate more use.

  3. …something in the universe has shifted, this is not right. The USPS has a reputation to uphold here and for them to start actually thinking like a business partner is going to upset the whole industry. What will happen to all the jobs that people hold supporting the catalogers and direct marketers in DC?

  4. If the concepy of universal service seems outdated to you then the logical step for the USPS is to zone all mail. This would allow them to reduce pricing on all mail in a SCF or BMU and increase pricing according to the actual cost of getting an envelope from point A to pont B. The immediate benefit would be seen locally by businesses and non profits. I feel that out of the box thinking is needed and not a temporary marketing gimmick. Refreshing as the idea is for the PO to have a “sale”.

  5. I have been very involved with the USPS as they craft this “Summer Sale.” I am impressed (and surprised) by how fast they are moving and their willingness to try new things to drive volume. As an industry, it is in our interest to show them we will respond to pricing incentives. If we do not react to their initiatives, there will be less of them offered.

    Right now, “fixing cataloging” is a major priority for the Postal Service. We have a lot of potentially good ideas on the table. The USPS is taking a business approach to problem solving so our time is not being wasted.

    If you get the ACMA e-newsletter, you also are aware that the Postal Regulatory Commission has telegraphed another major rate increase for us is looming on the horizon unless we get in gear to prevent it. Maybe you have seen Bank of America’s or Val-Pak’s attack on catalogers before the PRC?

    What we don’t have is enough catalogers involved. Both offensively, and defensively, we must have more companies engaged to reach critical mass. This industry has a poor history of coming together to advocate on its own behalf, preferring to delegate this to others that are not in a position to represent it fully. It is time to change this. A great first step is to come to Washington May 20th and 21st and participate in the National Catalog Advocacy & Strategy Forum to find out what is going on, what the catalog industry has learned in the last two years, and what we need to do now before calamity hits us again. More information is on the ACMA website at http://www.catalogmailers.org where you can see the agenda and register online. The deadline is this month for discounted admission and hotel to the ACMA Forum.

    The time for action is now in catalogs. While we are working hard to reduce catalog dependence, not only has the industry not yet figured this out but a world 100% free of catalogs probably is not possible. We must make sure we have affordable access to the mail system that has served us so well for hundreds of years. Please help spread the word so we can have more incentives and fewer 2007-style increases in our future.

    See you in Washington!
    Hamilton Davison
    Executive Director
    American Catalog Mailers Assn
    1-800-905-9514
    hdavison@catalogmailers.org

    • Thank you Hamilton, please feel free to post more details as they become available. I’d love to see more on the exact criteria (hoops mailer need to jump through) needed to qualify for the discounts. I’ve heard may different versions.

      Also share with us about the attacks from Val-Pac and BOA.

      Jim

      • You have two questions here Jim. As to more details on the Summer Sale, I think the USPS will put something out shortly on this and I will wait for their official notice. I have given ACMA members the benefit of my “inside thinking” on what to expect based on my participation in meetings every week for the last three weeks on this subject. (We have another next week too.) Readers might contact ACMA members for an update. ACMA will publish something as soon as we are clear we are not preempting the USPS’s right to communicate on this.

        As to the BOA and Val-Pak attacks, the relevant documents are posted on the public side of the ACMA website. Click under Recent News on the right to see the items in question. Basically, both large mailers are officially ‘protesting’ to the Postal Regulatory Commission that catalogers are being subsidized by their postage paid. Not only is this ironic for a group getting billions in taxpayer money, it ignores some basic economics of cataloging.

        It is in every mailer’s interests to keep catalogs in the mail. First, catalogs already cover substantial fixed costs these other mailers would have to pick up when catalogs leave the mail. Second, catalogs provide content Americans want to receive making mail more useful for all types of mail borne messaging. I would challenge every other mailing interest to spend the time understanding what is really going on here. The catalog industry remains in rate shock independent of the dreadful economy. The USPS needs volume and the catalog industry historically has been a growth area. The USPS gets it and is working hard with ACMA to find productive solutions to the situation. The Summer Sale is an example of this. The real questions are: (a) do other mailers get it too and (b) will catalogers finally come together in large numbers to fight for their rights in national postal policy?

        Hamilton Davison
        Executive Director
        American Catalog Mailers Assn.
        1-800-905-9514
        hdavison@catalogmailers.org

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