Understanding the April 2016 U.S. Postal Service Price Change

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1 Understanding the April 2016 U.S. Postal Service Price Change Each year at least once per year the U.S. Postal Service (USPS ) changes rates across their various mail classes and extra services. Often concurrent with these rate changes, the USPS may introduce or eliminate products, such as a Flat Rate Box, or regulations, such as presorted mail requirements. These events are referred to as the USPS Price Change. On April 10, 2016 there will be a price change for the mailing services category.

2 Contents Overview Brief Description...3 Key Highlights or Changes...3 Background Market Dominant vs. Competitive...4 USPS Pricing Tiers...4 Relevant Changes for Market Dominant Classes Mailing First-Class Mail....5 Standard Mail Media Mail....6 Library Mail...6 Bound Printed Matter...6 First-Class Mail International...7 Additional Changes USPS Insurance...8 Signature Confirmation....8 Certified Mail....8 Other Changes...8 PG 2

3 Overview Brief Description Each year at least once per year the U.S. Postal Service (USPS) changes rates across their various mail classes and extra services. Often concurrent with these rate changes, the USPS may introduce or eliminate products, such as a Flat Rate Box, or new regulations, such as presorted mail requirements. These events are referred to as USPS Price Changes. On April 10, 2016 there will be a price change and rates will decrease across Market Dominant mail classes (mailing services category), with no changes to product features or regulations. Other mail classes remain unchanged. Endicia will update all service offerings with the new prices and applicable regulations to ensure our customers are compliant and print postage correctly. We are committed to providing our customers with all USPS options as soon as they are available, and we make it a priority to educate our customers and partners about the changes and how they will be affected. Key Highlights or Changes: Starting at 12:01 a.m. Sunday, April 10, 2016: The average rate decreases for USPS products include: First-Class Mail decreasing by 4.1% First-Class Mail International decreasing by 3.8% Media Mail decreasing by 4.0% Library Mail decreasing by 4.2% Certified Mail decreasing by 4.3% Rates will decrease for certain domestic and international extra services There are no new features, services, rules or regulations that will go into effect with the April 10, For information on recent changes to shipping mail classes, visit the January 2016 USPS Price Change page. PG 3

4 Background Market Dominant vs. Competitive Market Dominant mail classes are services for which the USPS effectively has a monopoly in the market. Because there are not equivalent services offered by other carriers, the government restricts the maximum rate at which the Postal Service can raise or change these prices. This restriction means the average percent increase for each Market Dominant mail class cannot exceed the current year s Consumer Price Index. Competitive mail classes are USPS services that are similar to services offered by private carriers such as FedEx and UPS. The presence of marketplace competition increases the Postal Service s flexibility when pricing these classes, including the ability to offer volume or negotiated discounts. There is no maximum rate cap for any increase in price for these mail classes. Below is a table of each mail class by category: Market Dominant Mail Classes Competitive Mail Classes With the April 2016 price change, the USPS will reduce rates for Market Dominant mail classes (the mailing services category) by removing a 4.3% surcharge increase that was implemented in January This temporary surcharge was implemented to help the USPS account for losses during the U.S. economic downturn that began in 2008 and the USPS is projected to recoup these losses by April 10, With the removal of this surcharge, First-Class Mail rates will decrease. There are no changes to features, regulations or services for the April 2016 Price Change and this is strictly a rate decrease that applies to Market Dominant mail classes only. USPS Pricing Tiers The USPS offers discounted pricing options to certain types of customers for specific types of mail classes. They are also able to negotiate prices for domestic and international shippers. These negotiated rates are not published rates and therefore not covered in our Price Change information. Published pricing tiers include the following: First-Class Mail Standard Mail Media Mail Library Mail Bound Printed Matter First-Class Mail International First-Class Package Service Retail Ground (formerly Standard Post) Parcel Select Ground (formerly Parcel Select) Priority Mail Priority Mail Express First-Class Package International Service Priority Mail International Priority Mail Express International Global Express Guaranteed Retail Price: Retail pricing refers to the standard counter price for postage at the Post Office or other physical retail locations. Commercial Base Pricing (CBP): Commercial Base Pricing refers to the discounted postage price for certain mail classes available to electronic postage users. The vast majority of Endicia customers automatically receive CBP for applicable Competitive mail classes. Commercial Plus Pricing (CPP): Commercial Plus Pricing refers to postage prices with deeper discounts for certain mail classes available to qualified high-volume shippers. Endicia customers who qualify for CPP discounts automatically receive them through their software or application. With the April 2016 Price Change, rates will be decreasing for market dominant mail classes only. Competitive mail classes such as FCPS and Priority Mail will remain unchanged, both from a regulation and pricing perspective. PG 4

5 Relevant Changes for Competitive Classes Mailing First-Class Mail What is First-Class Mail used for? First-Class Mail is used to send postcards, letters and flats (large envelopes) that do not require expedited delivery or tracking information. Items can weigh up to 13 ounces and must fall within size and thickness restrictions, the largest of which is 0.75 thick for flats. Additionally, businesses can use First-Class Mail for presorted bulk mailings. Presorted pricing and rule changes are not covered in this document, as they do not impact Endicia s core customer base. What is the delivery standard for First-Class Mail? The majority of First-Class Mail (94%) is delivered in 3 days or less. Delivery times are not guaranteed. Average overall decrease As a whole, First-Class Mail prices are decreasing an average of 4.1% or $0.09 per piece. Letters The retail price of a one-ounce (standard) First-Class Mail stamp, the price you pay for a stamp at your Post Office, is decreasing two cents, from $0.49 to $0.47. The price for each additional ounce is decreasing by one cent to $0.21 per ounce (from $0.22 per ounce in 2015). The nonmachinable surcharge will also decrease by one cent to $0.21 (from $0.22). The PC Postage rate for a oneounce First-Class Mail stamp will decrease from $0.485 to $ PC Postage users will continue to receive a $0.005 discount compared to the retail price when printing postage for letters weighing 1 to 3.5 ounces. The Retail Letter category, defined as the rates charged at the Post Office for First-Class letters up to 3.5 ounces, is decreasing by an overall average of 4.2% or $0.035 per letter. The Metered/PC Postage Letter category, defined as the rates that you can receive through a PC Postage or Meter company for First-Class letters up to 3.5 ounces, is decreasing by an overall average of 4.3% or $0.035 per letter. Postcards Postcard prices are decreasing by one cent, from $0.35 to $0.34, a 2.9% decrease. Flats (large envelopes) The Flats category is decreasing by an average of 4.3% or $0.10 per piece. Parcels First-Class Mail Parcel is provided at retail rates and is decreasing by an average of 3.9% or $0.13 per piece. The additional ounce rate after 3 ounces decreases from $0.20 to $0.19 per additional ounce. First-Class Mail Letters and Postcards Piece Type 2016 Price Change vs oz. Letter: Retail $0.47 -$ oz. Letter: PC Postage $ $0.02 Additional Ounce: Letters $0.21 -$0.01 Nonmachinable Surcharge: Letters $0.21 -$0.01 Postcards $0.34 -$0.01 USPS Tracking is not available with First-Class Mail Letters, Postcards or Flats. Free tracking is available for First-Class Mail Parcels. PG 5

6 Standard Mail What is Standard Mail used for? Standard Mail is used for presorted bulk mailings like advertising, newsletters and catalogs. Presorted pricing and rule changes are not covered in this document. Information on Standard Mail changes can be found on the USPS website. What is the delivery standard for Standard Mail? Standard Mail is delivered in 3-10 days. Delivery times are not guaranteed. USPS Tracking is not available with most Standard Mail, though Tracking can be added to Standard Mail Parcels for an additional $0.35 per piece, a decrease of one cent versus last year s price. Media Mail What is Media Mail used for? Media Mail is a service used specifically to send educational material. There are restrictions on the type of products or materials that may be shipped using Media Mail, including a restriction on sending video games. Contents may include books, sound recordings, recorded video tapes, printed music or recorded computer-readable media such as CDs, DVDs and diskettes. Media Mail cannot include advertising of any kind, except for incidental book announcements. What is the delivery standard for Media Mail? Media Mail is delivered in 2-8 days. Delivery times are not guaranteed. Average overall decrease Overall, Media Mail prices are decreasing an average of 4% or $0.80 per package. Library Mail What is Library Mail used for? Library Mail is used specifically for sending items between qualified organizations. Contents can include items on loan from, or mailed between, academic institutions, public libraries, museums and other qualified institutions. Library Mail shipments are restricted to books, sound recordings, academic theses, and certain other approved items. What is the delivery standard for Library Mail? Library Mail is delivered in 2-8 days. Delivery times are not guaranteed. Average overall decrease As a whole, Library Mail prices are decreasing by an average of 4.2% or $0.80 per package. USPS Tracking is FREE for both retail and PC Postage customers. Bound Printed Matter (BPM) What is BPM used for? BPM is used for presorted mailing of bound materials, such as catalogs and phone books. Presorted pricing and rule changes are not covered in this document. Information on BPM changes can be found on the USPS website. What is the delivery standard for BPM? BPM is delivered in 2-8 days. Delivery times are not guaranteed. USPS Tracking is FREE for both retail and PC Postage customers. USPS Tracking is FREE for both retail and PC Postage customers. PG 6

7 First-Class Mail International (FCMI) What is FCMI used for? FCMI is used to send postcards, letters and flats (large envelopes) internationally that do not require expedited delivery or tracking information. Items can weigh up to 4 pounds and must fall with in size and thickness restrictions, the largest of which is 0.75 thick for flats. USPS Tracking are not available with FCMI. What is the delivery standard for FCMI? Delivery time varies by destination. Average overall decrease As a whole, FCMI prices are decreasing by 3.8% or $0.45 per piece. Letters Country Group Average % Change Average $ Change 1-4.0% -$ % -$ % -$ % -$0.08 Postcards Country Group Average % Change Average $ Change 1-4.2% -$ % -$ % -$ % -$0.05 Flats Country Group Average % Change Average $ Change 1-3.8% -$ % -$ % -$ % -$0.63 PG 7

8 Additional changes USPS Insurance Overall, USPS regular insurance rates are decreasing by an average of 4.6% or $0.24, for coverage value up to $600. For each additional $100 in insurance coverage, rates are decreasing by an average of 3.8% or $0.05 per increment. Coverage Value 2016 Price % Change $ Change $ $ % -$0.10 $ $ % -$0.10 $ $ % -$0.15 $ $ % -$0.25 $ $ % -$0.30 $ $ % -$0.35 $ $ % -$0.40 Retail Signature Confirmation Restricted Delivery is decreasing $0.30 (3.7%) versus 2015 and will be available for $7.85 per package. Electronic Signature Confirmation Restricted Delivery is decreasing $0.30 (3.9%) versus 2015 and will be available for $7.30 per package. Certified Mail Certified Mail will decrease by 4.3% from $3.45 to $3.30. The following three options will decrease by 4.1% from $8.60 to $8.25: Certified Mail Restricted Delivery Certified Mail Adult Signature Required Certified Mail Adult Signature Required with Restricted Delivery Per each additional $100 $ % -$0.05 Certificate of mailing will decrease from $1.35 to $1.30. The cost of a Return Receipt, at time of mailing, will decrease from $2.80 to $2.70 (retail) and from $1.40 to $1.35 (electronic). Priority Mail continues to include the first $50 of USPS insurance at no additional charge. Rates for Priority Mail International and Priority Mail Express remain unchanged. Signature Confirmation Rates are decreasing for both Retail and Electronic purchases: Other Changes The rates for domestic extra services such as Special Handling and Registered Mail are decreasing, as are the rates for international extra services. These changes can be found on the USPS website. Retail Signature Confirmation for First-Class Package Service, Standard Post, Priority Mail and Package Services (Media Mail, Library Mail and Bound Printed Matter) is decreasing $0.10 (3.3%) versus 2015 and will be available for $2.90 per package. Electronic Signature Confirmation for First-Class Package Service, Priority Mail, Parcel Select and Package Services is decreasing $0.10 (4.1%) versus 2015 and will be available for $2.35 per package. PG 8

9 Endicia and USPS: The Right Choice for Your Mailing and Shipping Needs No Hidden Fees Private carriers regularly tack on surcharges for residential, Saturday and rural deliveries, address validation and so much more. It s all included at no extra cost with the USPS. The cost you see in the Endicia software is the price you pay. APO/FPO, PO Box Delivery USPS is the only carrier that can deliver to military and diplomatic addresses, as well as PO Boxes. Endicia software makes sending packages to APO/FPO addresses easy with integrated shipping and customs forms. Delivery 365 days/year USPS is the only carrier that delivers every day of the year to residential addresses, mailboxes, mail slots and PO Boxes. The Endicia software is also available at any time so you can easily mail and ship whenever it is convenient for you. Tracking With the introduction of the Intelligent Mail Barcode (IMpb) the USPS typically has over 10 scan events per package. Endicia supports IMpb and offers online tracking, making it easy to keep an eye on packages. Flat Rate Options (domestic and international) Priority Mail flat rate boxes from USPS offer a quick, easy and convenient way to ship packages, at the most affordable price. Endicia software can help you choose the package option that is best for your business. Why Endicia? The leader in electronic postage with over $12 billion in postage printed. Close partnership with the USPS to help tailor the best solution for your business. Intuitive, easy-to-use tools to print labels and track your packages. Pay-on-Use Returns - With Endicia s Pay-on-Use Returns you only pay for postage on the return shipping label if and when it is used. Auto-Refund Service (ARS) - ARS automates the process of requesting refunds for unused postage by identifying potentially unused shipping labels and submitting a refund request to the U.S. Postal Service on your behalf. Delivery Status Notification - With this simple, centralized way to identify packages, you can receive automated daily reports on packages with one of three Delivery Status types: Delivered, Delivery Failure or Delivery Exception. Endicia Global Service (EGS) - Endicia Global Service eliminates many of the pain points associated with shipping to Latin America, such as customs delays, theft and costly shipping options. Reach key markets in Latin America and the Caribbean thanks to quicker and more reliable customs clearance, package tracking and affordable rates. Negotiated Pricing USPS and Endicia offer the most competitive pricing for your mailing and shipping needs don t be fooled by private carrier rates that don t reflect the true price once hidden surcharges are added. For information and resources, visit our April 2016 USPS Price Change page at PG 9

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