1 An Overview of Proposed USPS Rate Changes for April 2015 Presented by: Janet Lockhart-Jones Sacramento PCC Education Chair Curriculum Manager, Postal Education Pitney Bowes Learning and Development
2 Session Objectives Gain an awareness and understanding of the proposed rate changes Examine the details To arm you with enough information to make informed business decisions s concerning your mailing operations Translate your understanding of the proposed changes into savings opportunities
3 WHAT S INSIDE Agenda What we know Market Dominant/Mailing Services Changes Highlights The Details Shipping Services Changes The Highlights Details Call to Action Summary
4 As of 06:00 am, March 12th, what we know: APPROVED First-Class Mail prices Shipping/Competitive Services Extra Services/Ancillary Services Pricing for Standard Mail, Periodicals and Package Services was NOT approved. The USPS must resubmit pricing for these products no later than March 12 th to get them approved and implemented by April 26 th, Or.. The USPS could decide to just implement the portions of the rate proposals that have been approved and revise and submit the others at a later date. Th USPS ld t t d l th ll A il i i d The USPS could opt to delay the all April price increases and resubmit again for implementation at a later date.
5 As of 06:00 am, March 12th, what we know: Page 2 The reclassification of First Class Mail parcels Retail to the Competitive/Shipping Services group is still pending a decision. The Exigent rate (above CPI) increase from 2014 is still in effect. The case to make it permanent is with the courts. A decision may come by Summer. If the decision comes down and it must be rolled back, the mailing industry will see future price adjustments. any changes to Extra Services
6 Mailing Services All pricing is proposed until approved by the PRC.
7 Mailing Services Market Dominant Classes of Mail Affected Market Dominant First-Class Mail Single-Piece Letters & Cards Presort Letters & Cards Flats Parcels Outbound Single-Piece International Periodicals Special Services Standard Mail Letters Flats Parcels High Density/Saturation Letters Every Door Direct Mail Retail Parcels Package Services Bound Printed Matter (BPM) Flats BPM Parcels Media,, Library Mail Alaska Bypass JANUARY 2015 PBI Internal use only 7
8 Market Dominant Highlights Overall average price increase = 1.966% Most of the impact will be felt by commercial mailers Many changes to Extra Services Price will remain the same!!! First Class Mail Postcards to $0.35 First-Class Mail International letter (1 ounce) to $1.20 JANUARY 2015 PBI Internal use only 8
9 Market Dominant Highlights Meter Rate increase Save ½ cent on First-Class letters that have postage affixed using: Postage Meter PC Postage Permit Imprint Pre-canceled stamps Still: Current: $0.48 cents New: $0.485 cents No piece minimums No preparation requirement No requirement to report those pieces on a postage statement
10 Market Dominant Highlights First-Class Current Price Proposed April 2015 Stamp Price $0.49 $0.49 Meter Price Single-Piece Flats Single-Piece Cards Retail Parcels** **If reclassified as a Competitive Product, the price of $2.54 may change.
11 Market Dominant Highlights First-Class Mail and EDDM - Retail First-Class Mail LETTERS FLATS Weight Not Over (ounces) 4/2015 Current Weight Not Over (ounces) 4/2015 Current LETTERS - Metered Postcard Single-Piece Additional Ounce Rate (Letters/Flats) 0.22 Nonmachinable Surcharge (Letters Only) 0.22 EDDM - Retail (Std Mail Saturation Flats accepted at Retail) 0.183
12 Market Dominant Highlights - Commercial Key First-Class Mail Single-Piece Prices First-Class Mail - Commercial Letters and Postcards Proposed Automation Machinable Nonmachinable Weight Not Over (ounces) 5-Digit 3-Digit AADC Mixed AADC Presorted Presorted Postcard Addl. Ounce Rate Nonmachinable Surcharge Overall average increase: 2.417%
13 Market Dominant Highlights - Commercial Key First-Class Mail Single-Piece Prices First-Class Mail - Commercial - Flats Proposed Automation Nonauto Weight Not Over (ounces) 5-Digit 3-Digit ADC Mixed ADC Presorted Additional Ounce Rate Overall average increase: 2.438%
14 Market Dominant Highlights Domestic Special Services USPS Tracking USPS Tracking service is automatically included with the purchase of items sent via First-Class Mail Parcels, Package Services, Priority Mail, Parcel Select, Standard Post, and First-Class Package Service USPS Tracking for Standard Mail parcels increasing 59% to $0.36 Available at time of mailing only. Requires an IMpb or tracking barcode or present at USPS Post Office, branch, station, or self-service service kiosk for mailing. USPS Tracking First Class Mail (Parcels Only) Retail 0.00 First-Class Mail (Parcels Only) Electronic 0.00 First Class Package Service Electronic 0.00 Pi Priority it Mail Retail Priority Mail Electronic 0.00 Standard Post Retail 0.00 Standard Post Electronic 0.00 Standard Mail Electronic 0.36 Package Services Retail Package Services Electronic 0.00 Parcel Select Electronic Electronic 0.00
15 Market Dominant Highlights Domestic Special Services Restricted Delivery Directs delivery only to a specific addressee or authorized agent NEW: Eliminated as a standalone option. Being combined with other services.
16 Market Dominant Highlights Domestic Special Services Certified Mail Price increase - from $3.30 to $3.45 Same price, electronic or retail Three new options (with added cost): Certified Mail Restricted t Delivery Certified Mail Adult Signature Required Certified Mail Adult Signature Required w/restricted Delivery
17 Market Dominant Highlights Domestic Special Services Certificate t of Mailing Options Current April 2015 Basic $1.30 $1.35 Firm Book Mailing Bulk: First 1,000 pcs Each Add l 1,000 pcs %20No.% pdf
18 Market Dominant Highlights Domestic Special Services Return Receipt Price increase of 3.8% Retail = $2.80 Electronic = $1.40 Return Receipt after Mailing option - eliminated RR service is only available at time of mailing $2.80 $1.40
19 Market Dominant Highlights Domestic Special Services Signature Confirmation %20No.% pdf
20 Market Dominant Highlights Domestic Special Services Collect on Delivery (COD) Price increase of 5.4% New Hold for Pickup option New offering: COD Restricted Delivery (with added costs) p /Order%20No.% pdf
21 Market Dominant Highlights Domestic Special Services Insurance Overall price change is a -2.0% Prices decreasing on items insured from $ $ but a delivery signature will not be obtained Items insured above $500 will get free delivery information Priority Mail Express Insurance of $100 included Priority Mail Insurance of $50 or $100 included
22 Insurance Order%20No.% pdf
23 Market Dominant Highlights Domestic Special Services Registered Mail Price increase of 2.6% Max indemnification increasing to $50k New offering: Registered Mail Restricted Delivery (at additional cost)
24 Business Reply Mail Tip #1: To save on per piece charges, consider High Volume Regular BRM or QBRM Tip #2: Switch to CRM if BRM is not really necessary
25 Business Reply Mail Options Basic Business Reply Mail First-Class Mail postage $0.48 Per piece charge $0.83 $220Annual Permit Fee No Accounting Fee < 909 letters / year BRM High Volume First-Class Mail postage $0.48 Per piece charge $0.097 $220 Annual Permit Fee $685 Annual Accounting Fee > 909 letters / year Qualified BRM Basic Postcard, 1oz and 2oz envelopes First-Class Mail postage $0.473 (l oz. letter price) Per piece charge $0.064 $220 Annual Permit Fee $685 Annual Accounting Fee > 851 letters / year NOTE: IMb REQUIRED! QBRM High Volume Postcards, 1oz and 2oz envelopes First-Class Mail postage $0.473 Per piece charge $0.010 $220 Annual Permit Fee $635 Annual + $2270 Qtr Fee > 166,667 letters / year
26 Business Reply Mail Comparison Assumptions 100,000 outgoing 4% anticipated return = 4,000 1 oz letter Basic High Volume Qualified BRM BRM BRM Basic Annual Permit $220 $220 $220 Accounting Fee $0 $685 $685 Per Piece Postage + Fee $ = $ = $ = $1.31 x 4000 = $0.557 x 4000 =.537 x 4000 = $5,240 $2,308 $2,148 Total $5,460 $3,213 $3,053
27 Shipping Services All pricing is proposed until approved by the PRC.
28 Shipping Services Priority Mail Express Priority Mail First-Class Package Service Parcel Select Standard Post Extra Services Return Services Mailer Services Recipient Services JANUARY 2015 PBI Internal use only 28
29 Shipping Services Highlights Domestic: No price change International: 5.5% average Increase Domestic: No price change International: 6.7% average Increase Standard Post = 11% avg. price increase 5% average price increase JANUARY 2015 PBI Internal use only 29
30 Shipping Services Highlights Competitive Services Average IM pb increases Required First-Class Package Service
31 Shipping Services A separate proposal to reclassify First Class Mail Parcels
32 First-Class parcels Attribute First-Class Mail Parcels Classification Market Dominant/Mailing Services Open or Closed to Postal Inspection Delivery Std. Max Weight Rate Closed 1-3 days 13 ounces Retail. Labeling Label 400 acceptable if paying Retail Requirements price with a Meter
33 First Class Package Service Classification: Competitive Option A: First-Class Package Service - Retail Option B: First Class Package Service Commercial Base Option C: First Class Package Service Commercial Plus Barcode requirement: IMpb (Commercial) or Label 400 (Retail). Weight Maximum 13 ounces; CPP ounces Delivery Standard: 1-3 days Open or closed: First-Class Mail Parcels Retail will remain closed to Postal Inspection Pricing Retail pricing expected to change significantly CBP CPP
34 First-Class Package Service Retail First-Class Mail Parcels First Class Parcels Retail **If the reclassification is approved, the proposed starting price for 1-3 ounces could rise significantly. **This is a SEPARATE proposal, submitted outside of the Rate Change proposal. This has not yet been ruled on. Oz. Current Proposed ** ** **
35 In Summary. There are opportunities for clients to save: First-Class Package Service vs. Retail Electronic services (err and E-SigCon) vs. Retail USPS Tracking included at no cost (except Standard Mail parcels) Transition from UPS and FedEx to avoid accessorial fees and Dimensional i Weight pricing i on all parcels Meter mailers will still save ½ cent off retail First Class postage for letters Move from Basic BRM to High Volume or QBRM Move from BRM to CRM if appropriate Priority Mail and Priority Mail Express Domestic prices are not changing. USPS is sending a clear message to shippers and its competitors.
36 Meet with your vendor account/sales representatives to discuss the changes in more detail. For mailers using Retail Signature Confirmation or Return Receipt, transition to electronic options to save $$$ Understand d your profile usage of First-Class parcels. For those sending First-Class Parcels Retail, an IM pb solution using First Class Package Service might be a significant cost savings alternative. If sending packages with insurance levels of $ $500, remember that the USPS will no longer obtain a signature at delivery. As an alternative, the mailer may opt for Signature Confirmation. 36
37 Remember, Return Receipt AFTER Mailing is being eliminated. For mailers that have used this option, you may incur a significant hit to your postal expenditures if you now have to apply RR to ALL applicable outgoing pieces. Budget accordingly. 37
38 Looking for more support? (Additional Resources) Example: Leverage these resources to learn more USPS Postal Explorer (All pricing files are now available.) Pitney Bowes USPS News and Information Blog RIBBS Intelligent Mail Package Barcode ellmailpackage
39 Thank you.