Mailing Services Price Change Effective Jan. 26, Mailing/Shipping Services Price Change Effective January 26, 2014

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1 Mailing/Shipping Services Price Change Effective January 26, 2014 January 2014

2 Mailing Services Background Structural changes First-Class Mail Standard Mail Periodicals Package Services Extra Services Promotions Mailing Services Price Change 2

3 Total average increase of 6.0% on Market Dominant products The Price Cap CPI: 1.6% Based on Consumer Price Index PRC formula a moving average of CPI data Exigent: 4.3% 3

4 CPI Rate Case PRC Filing Sep 26th Regulatory Review (within) 45 days PRC Review / Decision Implementation (within) 77 days Nov 21st Prices Change Jan 26th, 2014 Exigent Rate Case PRC Filing Sep 26th Regulatory Review (within) 90 days Implementation (within) 32 days PRC Review / Decision Dec 24th 4

5 Classification Changes Mailing Services Price Change New price category for First-Class Metered Single-Piece Revision of residual structure in First-Class Mail Introduces FSS pricing 5

6 First-Class Meter Rate Mailing Services Price Change Meter Rate of $0.48 for one ounce is available for Single-Piece mail, whether mailed at retail, or as residual in a commercial mailing Available for meter, permit imprint, pre-cancelled stamps, & PC Postage Existing requirements for Single-Piece mail remain unchanged For permit imprint mailings, the minimum piece requirement of at least 200 pieces remains 6

7 Residual Mail First-Class Mail Letters Residual Mail changes for January 2014: Blended rate of $0.50 for mailings containing 1 oz. and 2 oz. pieces Option to separate pieces by weight and pay prevailing Single-Piece prices $0.48 for 1 oz. $0.69 for 2 oz. 7

8 Flats Sequencing System (FSS) Pricing Establishes DFSS (FSS Facility) Entry Rate Structure For approximately 50% of FSS zones, the SCF is not an FSS site Periodicals No pallet charge for scheme pallets entered at DFSS Standard Flats $0.001 per piece discount for pieces on DFSS-entered scheme pallets 8

9 Full Service IMb Incentives Remain in Place First-Class Mail : $0.003 Standard Mail : $0.001 Periodicals: $0.001 Bound Printed Matter Flats: $

10 First-Class Mail 5.9% overall increase $0.46 stamp price increases to $0.49 Product Percent Change Single-piece Letters & Cards 5.5% Single-piece Metered 4.3% Flats 6.0% Parcels 11.0% Presort Letters & Cards 6.0% First-Class Mail International (includes letters, cards, and flats) 8.5% 10

11 Key First-Class Mail Single-Piece Prices Mailing Services Price Change Current Price CPI + Exigent Price Percent Change Stamp Price % Meter Price % Single-Piece Flats % Single-Piece Cards % Retail Parcels % 11

12 First-Class Mail Single-Piece Letters Additional ounce increases to $0.21 Mailing Services Price Change Postcard rate increases to $0.34 (stamped postcards will now cost $0.38) First-Class Mail International Global Forever Stamp $

13 Key First-Class Mail Bulk Prices Mailing Services Price Change Current Price New Price Percent Change Mixed AADC Automation Letters % 3-Digit Automation Letters % 5-Digit Automation Letters % 13

14 First-Class Mail Presort Mailing Services Price Change Letters Letters up to 2 ounces charged the 1-ounce price Additional ounce increases to $

15 First-Class Mail International 6.6% overall increase Mailing Services Price Change Product Percent Change Letters 4.5% Flats 10.9% Cards 4.5% 15

16 Standard Mail 5.9% overall increase Product Percent Change Letters 5.9% Flats 6.2% Carrier Route Letters, Flats, and Parcels 6.0% High Density / Saturation Letters 5.6% High Density / Saturation Flats and Parcels 5.7% Parcels 6.2% EDDM-Retail 9.4% 16

17 Key Standard Mail Prices Mailing Services Price Change Current Price New Price Percent Change Letters (5-Digit Auto entered at Origin) % Flats (5-Digit Auto Flat entered at Origin) % Carrier Route (Flat entered at Origin) % High Density/Saturation Letters (Saturation Letter entered at Origin) High Density/Saturation Flats (Saturation Flat entered at Origin) % % EDDM-Retail % 17

18 Standard Mail Detached Address Labels (DALs) Mailing Services Price Change Price increases to 3.4 cents from 3.1 cents 18

19 Standard Nonprofit Mail The average revenue per piece from Nonprofit products must equal, as nearly as practicable, 60 percent of the average revenue per piece for commercial Standard Mail USPS continues to make every effort to keep the nonprofit discounts equal to commercial discounts 19

20 Key Standard Nonprofit Mail Prices Mailing Services Price Change Current Price New Price Percent Change Letters (5-Digit Auto entered at Origin) % Flats (5-Digit Auto Flat entered at Origin) % Carrier Route (Flat entered at Origin) % High Density/Saturation Letters (Saturation Letter entered at Origin) High Density/Saturation Flats (Saturation Flat entered at Origin) % % 20

21 Periodicals Barcoded Machinable Flats Carrier Route Basic (Piece Rates) Barcoded Machinable Flats 5-Digit (Piece Rates) Percent Change 6.2% 5.8% Outside County 5.9% Inside County 6.0% Note: No individual publication prices will increase greater than 7.5%. 21

22 Package Services Mailing Services Price Change 5.8% overall increase Eliminate $0.03 Postnet barcode discount for BPM Flats Retain $0.001 IMb barcode discount for BPM Flats Product Percent Change Media Mail/Library Mail 6.5% Alaska Bypass 6.8% Bound Printed Matter Flats 5.0% Parcels 6.2% 22

23 Extra Services 6.9% overall increase Product Mailing Services Price Change Percent Change PO Boxes 6.9% Certified Mail 6.5% Return Receipt 6.1% Registered Mail 6.3% Insurance 7.8% COD 8.4% All Other 7.8% 23

24 2014 Proposed Promotions Mobile Technology Integration Build upon previous promotions and continue strategy to encourage mailers to integrate direct mail with mobile technology Technology Drives Relevance Leverage the value of innovative direct mail techniques that are effective but less widely used Leverage Value of First-Class Mail Promotions intended to slow the declining volume trends and ensure reply mail and FCM advertising remain a relevant part of the FCM mix New Customer Acquisition Program to provide incentive for new small business customers to try direct mail Pending USPS and PRC approval 24

25 JAN FEB - MARCH APRIL MAY - JUNE JULY AUG - SEPT OCT NOV - DEC FIRST-CLASS MAIL Earned Value Promotion Promotion Period April 1 June 30 Color Print in First-Class Mail Transactions Promotion Promotion Period Aug 1 Dec 31 STANDARD AND FIRST-CLASS MAIL Mail and Digital Personalization Promotion Branded Color Mobile Technology Promotion Promotion Period Feb 1 March 31 Promotion Period May 1 June 30 Premium Advertising Promotion Promotion Period April 1 June 30 *mail prepared/ presented as FCM STANDARD MAIL Emerging Technology Featuring NFC Promotion EDDM MAIL All promotions are subject to PRC approval. EDDM Coupon Program Promotion Period Aug 1 Sept 30 Mail Drives Mobile Commerce Promotion Promotion Period Nov 1 Dec 31 Tentative Program Period March 1 Dec 31

26 Resources Online Postal Explorer pe.usps.com Current and new prices Including downloadable price files Federal Register notices Mailing Services Price Change Domestic Mail Manual & International Mail Manual DMM Advisory posted on Postal Explorer, also special updates 26

27 Shipping Services Domestic products Priority Mail Express Priority Mail Parcel Select Parcel Return Service First-Class Package Service Standard Post Other Competitive Offerings Mailing Services Price Change 27

28 Shipping Services (cont d) International products Global Express Guaranteed (GXG ) Priority Mail Express International Priority Mail International First-Class Package International Service International Priority Airmail (IPA ) International Surface Air Lift (ISAL ) Airmail M-Bag Competitive Extra Services 28

29 Domestic Shipping Services Product Overall Average Increase Priority Mail Express 3.0% Priority Mail 0.0% Parcel Select 9.2% Parcel Return Service 3.0% First-Class Package Service 5.0% Standard Post 5.2% 29

30 Priority Mail Express Retail Prices Average Retail Increase 3.1% New! 10:30 a.m. delivery w/ $5 fee 1/2 pound price from $16.95 Flat Rate Envelope $19.99 Flat Rate Box $

31 Priority Mail Express new Zone 9 For Freely Associated States (FAS) Palau, Micronesia, Marshall Islands Separate zone to align price with cost of transportation 31 31

32 Priority Mail Express Commercial Base Prices Prices increase on average 2.9% 1/2 pound price from $13.09 Flat Rate Envelope price $18.11 Flat Rate Box $

33 Priority Mail Express Commercial Plus Prices Prices increase on average 0.6% 1/2 pound price from $11.16 Flat Rate Envelope price $14.85 Flat Rate Box $

34 Priority Mail Retail Prices Mailing Services Price Change Flat Rate Envelopes Regular $ 5.60 Legal $ 5.75 Padded $ 5.95 Flat Rate Boxes Average Retail Increase 0.0% Small $ 5.80 Medium $12.35 Large $17.45 Large APO/FPO/DPO $

35 Priority Mail new Zone 9 Mailing Services Price Change For Freely Associated States (FAS) Palau, Micronesia, Marshall Islands Separate zone to align price with cost of transportation 35 35

36 Priority Mail Commercial Base Prices Regional Rate Box Approved payment methods required Price based on box and zone Regional Rate Box A 15-pound maximum, starts at $5.32 Regional Rate Box B 20-pound maximum, starts at $6.16 Regional Rate Box C 25-pound maximum, starts at $15.25 Additional $0.75 fee when deposited at Retail Commercial Plus mailers also qualify 36 36

37 Priority Mail Commercial Plus Prices Prices increase on average 0.0% Average 14.3% below Retail prices Prices start at $4.58 Account volume thresholds apply Regional Rate Box also available Annual account volume thresholds do not apply Postage paid at Commercial Base prices 37

38 Priority Mail Commercial Plus Cubic Prices Price based on cubic measurement and zone Five price tiers starting at $4.58 New! Lower account volume threshold Cubic soft pack Priority Mail Open and Distribute Only tray boxes entered at Priority Mail Commercial Plus prices are charged based on the tray box and zone to which sent rather than weight and zone 38 38

39 Parcel Select Destination Entry DDU DSCF DNDC Overall Average Increase 9.2% Non-destination Entry Parcel Select Lightweight Average Increase 8.0% 5.6% 5.1% 5.9% 10.1% 39 39

40 Parcel Return Service Mailing Services Price Change Overall Average Increase 3.0% Average Increase by Category Return Network Distribution Center (RNDC) 0.0% Return Sectional Center Facility (RSCF) 0.0% Return Delivery Unit (RDU) 5.7% PRS Full Network 0.0% 40 40

41 First-Class Package Service Overall average increase is 5.0% Mailing Services Price Change Commercial Base and Commercial Plus pricing Free USPS Tracking and confirmation of delivery with Intelligent Mail package barcode (IMpb) 41 41

42 Standard Post Mailing Services Price Change Overall average price increase is 5.2% Free USPS Tracking New! Zones 1-4 upgraded to Priority Mail* * except for HAZMAT and live animals A Retail product with payment by stamps or meter; deposited at Retail counter or Package Pickup 42 42

43 International Shipping Services Mailing Services Price Change Global Express Guaranteed (GXG) Priority Mail Express International Priority Mail International First-Class Package International Service International Priority Airmail (IPA) International Surface Air Lift (ISAL) Direct Sacks of Printed Matter to One Addressee (Airmail M-bags) International Extra Services 43

44 Global Express Guaranteed (GXG) Average Overall Increase Commercial Base Price 3.0% Lower than Retail by up to 13% Commercial Plus pricing Annual revenue commitment required Prices lower than Retail by up to 20% Global Expedited Package Services Non- Published Rates (GEPS NPR) contracts 44

45 First-Class Package International Service Average Overall Increase Commercial Base Price 0.8% Lower than Retail by up to 14% Commercial Plus pricing Prices lower than Retail by up to 19% E-USPS DELCON INTL available to 12 more countries Eligible for Package Pickup or Pickup On Demand service 45

46 Other International Mail Changes Product Average Overall Increase Airmail M-Bag 2.9% International Priority Airmail (IPA) -2.5% International Surface Air Lift (ISAL) -2.9% Not all IPA and ISAL mail flown to destination country Number of price groups increases to 20 Price groups 1-14 shape-based pricing Separate containers for each shape (post cards & letters; flats; packages) Weight limits for flat-size and package-size items change Minimum weight for direct country price tier decreases Permanently suspend service to Cuba, Iran, North Korea, Sudan, Syria 46

47 Resources Postal Explorer pe.usps.com Current and new prices downloadable price files Federal Register notices link to the Postal Bulletin Domestic Mail Manual (DMM ) and International Mail Manual (IMM ) DMM Advisory posted on Postal Explorer Also special updates. Subscribe via 47

48 48 Questions?

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