In unsurprising fashion, the USPS officially announced this past Friday before the holiday weekend that it has filed for a second postal rate increase in 2021 that is in line with its “Delivering for America” 10-year plan. Here’s what mailers should expect:
Table courtesy of ACMA
Current Postmaster General and CEO Louis DeJoy had this to say about the request: ““For the past 14 years, the Postal Service has had limited pricing authority to respond to changing market realities. As part of our 10-year plan to achieve financial sustainability and service excellence, the Postal Service and the Board of Governors are committed to judiciously implementing a rational pricing approach that helps enable us to remain viable and competitive and offer reliable postal services that are among the most affordable in the world.”
While still pending a through review and approval by the Postal Regulatory Commission (PRC), many in the industry, including us here at Arandell, expect these rates to be pushed through. Once approved, these new rates would take effect on August 29th.
How Does this Affect Me?
As a mailer, this will all depend on where your mailpieces fit in the marketing mail bracket above, however, most catalogs are considered “Flats” by the USPS due to their size and weight. Unfortunately, this means seeing one of the higher requested increases which may cause some disruption with your budget for later on this year.
Fortunately, there are several ways in which to lower, offset and combat your postage costs. Here are just a few ways which we recommend:
1) Explore Formatting Options
We know that once you find a size you like, it’s hard to make the switch. However, here at Arandell we recommend exploring other size and formatting options based on ever-changing consumer trends and, of course, postal rate increases.
Many of our clients have still achieved fantastic marginal success when switching from standard, large formats (classified by the USPS as being a “Flat” size) like 7.5” x 10.5” catalogs to USPS Letter sizes — what we call a “Slim Jim” format — which are typically 6” x 9.5”. Smaller formats may not be for everyone, but they are a great option when looking to reduce overall catalog costs (postage, paper and ink). Conversion to a Slim Jim format has a nominal effect to your advertising real estate, while maintaining, or even catalyzing, greater circulation reach.
2) Work with Clean Data
As we say at Arandell, 70% of the success of any catalog mailing can be attributed to the hygiene of your data, because at the end of the day, bad data is quite literally wasted money that goes down the drain.
Our full suite of hygiene solutions at Arandell work to maximize the efficiency of each mailing and ensure that you’re mailing to the people that your data says you’re mailing to.
3) Take Advantage of Promotional Discounts
The USPS offers many postal promotions throughout the year which enable mailers to take advantage of programs that help to maximize end receiver engagement while also receiving a sizeable discount off the top of their total postage costs.
Current promotions that could help to mitigate the costs associate with a second postal rate increase include Tactile, Sensory & Interactive Mailpiece Promotions, Emerging & Advanced Technology and Earned Value. Each of these promotions offers 2% off all eligible mailpieces, which can add up to a huge amount of savings.
Already looking ahead to next year? The USPS also recently announced their postal promotions for 2022, with most programs providing a 4% discount off postage – doubling what the standard discount has been in recent years.
For more information on the USPS’s postal promotions and discounts, take a look at the USPS’s website here: https://www.usps.com/business/promotions-incentives.htm
4) Join the Fight!
One solution we always encourage to mailers who are frustrated with these rate hikes is to join the fight with us by getting involved with organizations such as the American Catalog Mailers Association (ACMA), The Alliance of Nonprofit Mailers and The Association for Postal Commerce (PostCom), who all fight on behalf of mailers out in Washington D.C.
Each of these industry organizations have websites, social media platforms and regular newsletters where you can stay engaged with all the latest USPS news and stay informed on what to do to make your voice heard.
What’s Next?
As we outlined in our last postal update, there is some momentum being built for postal reform in Washington D.C. at the moment. For the first time in many years, legitimate legislation is being discussed in the House and Senate that would repeal several key items from the 2006 Postal Accountability and Enhancement Act. This Act ultimately caused much more harm than good, and the repealment of these items would help the USPS to offload some of its debt.
There is likely to be much more information on these matters coming soon while we wait to hear from the PRC and if this second postal rate increase will go through. We will continue to keep you involved as they progress.