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Greater Atlanta. Postal Customer Council Review: USPS January 22 Price Change. P.O. Box 161002, Atlanta GA 30321-1002 www.gapcc.net. Agenda. Exigent Filing?. Timeline CPI cap Changes by class of mail First-Class Mail First-Class Mail International Standard Mail Periodicals

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greater atlanta

Greater Atlanta

Postal Customer Council

Review: USPS January 22 Price Change

P.O. Box 161002, Atlanta GA 30321-1002

www.gapcc.net

agenda
Agenda

Exigent Filing?

  • Timeline
  • CPI cap
  • Changes by class of mail
    • First-Class Mail
      • First-Class Mail International
    • Standard Mail
    • Periodicals
    • Package Services
    • Extra Services
  • Resources

Sources: U.S. Postal Service, Product Classification; PostCom; USPS Notice of Market-Dominant Price Adjustment Before the Postal Regulatory Commission, Docket No. R2012-3, October 18, 2011; Federal Register Volume 76, Number 205 (Monday, October 24, 2011)

exigent filing
Exigent Filing?
  • Postal Regulatory Commission’s (PRC) Oct. 31 order denied USPS motion to "stay" its request for exigent price relief until Dec. 15, 2011
    • November 7 USPS decided to proceed with the case. If legislation passes that promotes the Postal Service's financial stability, the USPS will review its position any may choose to withdraw the case if warranted.
  • The Postal Act of 2006 (PAEA) capped price increases by the Consumer Price Index (CPI)
    • However, the law allows for increases beyond the CPI cap due to exceptional or extraordinary circumstances.
    • That was the case in July 2010 when the USPS filed for an increase above CPI, citing significant mail volume losses. The Postal Service financial crisis has worsened since then.
  • While legislation continues to be introduced to address critical USPS issues, the uncertainty over Congressional action leaves the USPS little choice but to proceed with the case (for now)
timeline

USPS Filed with PRC on October 18

Jan. 22, 2012

Preparation

Public Notification

Implementation

Price development

PRC Approved on November 22, 2011

Timeline

USPS: 90 days notice for Market Dominant Products

(also called Mailing Services):

First-Class Mail, Periodicals, Standard Mail, Package Services

Competitive Products/Shipping Services:

Express Mail, Priority Mail, Parcel Select and Parcel Return will also change on January 22, 2012

the price cap
The Price Cap
  • Based on Consumer Price Index
  • PRC formula: a moving average of CPI data
  • Current calculation of cap is 2.133%
    • Overall average percentage change for each class of mail cannot exceed this level
    • Because the cap calculation applies to each class of mail, rather than a product within a class, some products within a mail class have an increase that is higher (or lower) than the price cap
first class mail
First-Class Mail
  • 44-cent stamp increases $0.45
    • First change since May 2009
  • All new commemorative one-ounce, FCM stamps will be Forever Stamps
fcm single piece
FCM Single-Piece
  • Letters
    • Additional ounce stays at $0.20
    • International letters & postcards
      • Canada and Mexico increase by 5 cents to $0.85
      • Rest of world increases by 7 cents to $1.05
  • Postcards
    • Postcards increase by 3 cents to $0.32
  • Flats
    • One-ounce price increases by 2 cents to $0.90
  • Parcels
    • Higher than average to improve cost coverage (Retail)
second ounce free

First-Class Mail

Second Ounce Free

New Innovation!

  • Use bill & statement mailings for marketing
    • Capture value of advertising to targeted customers
  • Piece weighing up to 2 oz pays 1 oz price

Add value to First-Class Mail

Slow diversion to electronic alternatives

first class mail presort
First-Class Mail Presort
  • Letters: Most 1-ounce prices increase by 0.6 cents to 1.4 ¢
  • New! Letters up to 2 ounces charged the 1-ounce price
      • Allows FCM Auto and Presort letter mailings to insert additional pages that would not otherwise be included due to paying for the 2nd ounce postage – price decrease of 21.6% and 24.6% depending on presort level.
  • Additional Ounce – Auto letters, Presort letters (Machinable/Nonmachinable)
    • Current price is 12.5¢ – increasing 100% to 25¢ rom 2 ounces to 3 ounces

0.25

0.125

Reply Rides Free program eliminated 12/31/2011

slide12

FCM Presort Letters

5-digit discount remains 10¢

Prices equal

45¢

+1.0¢

40.4¢

37.4¢

37.4¢

+1.4¢

35.0¢

+0.6¢

+0.9¢

+1.0¢

Single-

MAADC

AADC

3-Digit

5-Digit

piece

align prices with operational capacity

3-Digit

AADC

201xx

Dulles Plant

226xx

227xx

First-Class Mail

Align Prices with Operational Capacity
  • Set stage for network optimization
    • “Plant” vs. “network”
    • Little operational value for 3-digit sortation
    • Final network design will define sortations
      • Short-term: set 3-digit = AADC
      • Both 3-digit and AADC sortation allowed
first class mail presort1
First-Class Mail Presort

New! Same price for AADC and 3 Digit sort options

  • (incoming operations)
  • USPS to evaluate these sortations against a reconfigured plant “scheme” sort to determine consistency with new network design
parcels
Parcels
  • Commercial parcels: now part of Shipping Services – Competitive Category
      • Prices announced November 23, 2011
standard mail1
Standard Mail

Three factors contributed to percentages:

  • Above-cap increases for Flats and Parcels
  • Price increase for DALs

Which pushed up average increase for ECRWSH and ECRWSS Flats and Parcels

  • One-time REDUCTION in nonprofit average revenue per piece for letters

Needed to achieve required 60% of commercial Standard Mail per piece revenue ratio

standard mail2
Standard Mail
  • Detached Address Labels (DALs)
    • Prices increase from $0.017 to 3 cents
      • With or without advertising
        • Likely to change in 2013
    • DALs not required for Saturation flats
      • If used, will pay the surcharge
    • No surcharge for DAL if used for parcels
    • Saturation flats on-piece addressing cost less to process and deliver
      • Mailers who do not want on-piece addressing may be able to use EDDM (simplified addressing)
standard mail parcels

Parcel restructuring:

  • Eliminated Not-Flat Machinable (NFM) category
    • USPS expects commercial mailers currently using NFMs to use options other than Standard Mail
    • While nonprofit mailers will use Standard Mail nonprofit irregular parcel category
  • Replaced with New Marketing Parcels category
    • Required to use “Or Current Resident”
  • New! Fulfillment parcels moved to Shipping Services
    • (Does NOT include Nonprofit Standard Mail)
    • Part of Shipping Services price change
    • < 1 lb: Parcel Select Lightweight
    • > 1 lb: Parcel Select
Standard Mail Parcels
nonprofit
Nonprofit
  • Auto 5-Digit Letters weighing between 3.3 ounces and 3.5 ounces
    • Negative - 0.2 cents per piece charge: combination of piece and pound price
  • Mixed AADC and AADC Machinable letters decreased between 1.1% and 1.7%
  • Other letter categories increased within CPI cap for the class
  • Highest percent increase is for Carrier Route DDU entered Flats at 3.2%
periodicals
Periodicals
  • 2.133 % overall increase
  • New! Mixed Origin ADC pallet prices
  • Encourage efficiency (pallets vs. sacks)
    • Above average increase for Origin Pallets
  • Maintain 9.8-cent differential between 5D – CR
package services
Package Services

2.133% overall increase

  • New! 3-cent barcode discount discontinued
    • BC discount unnecessary with mandatory requirement of Intelligent Mail Package barcode for commercial mailers in 2013
extra services
Extra Services

0.7 % overall decrease

New Innovation

  • New! 3-month rental option for PO Boxes
    • Could be a good option for limited BRM receipt programs
  • Permit Price and Fees remain at $190.00
percent increase
Percent Increase
  • Express Mail 3.3%
  • Retail Express Mail:  4.4%
  • Priority Mail:  3.1%
  • Priority Mail Commercial Base:  3%
  • Priority Mail Commercial Plus: 2.8%
  • Priority Mail Retail: 3.1%
  • Parcel Select:  8.5% (USPS’ bulk ground shipping service)
  • Commercial FCM Package Service: 3.7%
competitive shipping services
Competitive – Shipping Services
  • New for 2012 Package Intercept for commercial mailers
  • Available through a customer interface on Business Customer Gateway.
    • For $10.95 plus Priority Mail postage, customers can request mail be intercepted before final delivery is attempted to the initial delivery address.
    • The shipment can be returned to sender, held for pick up at a Post Office, or redirected to an alternate address.
    • Intercepted packages are shipped using Priority Mail.
competitive shipping services1
Competitive – Shipping Services
  • First-Class Package Service (formerly known as First-Class Mail commercial parcels)
    • Overall price increase of 3.7 percent.
    • The Intelligent Mail package barcode will provide free visibility to these parcels.
  • Prices will also be adjusted for other Shipping Services products and services:
    • Parcel Select
    • Parcel Return Service
    • International Mail
    • Premium Forwarding Service
    • Post Office Box Service
resources1
Resources
  • Online
    • Postal Explorer ─ pe.usps.com
      • Current and new prices
        • Including downloadable price files
      • Federal Register notices
      • Domestic Mail Manual & International Mail Manual
  • DMM Advisory ─ e-mail updates for customers
    • Subscribe: dmmadvisory@usps.com
  • MailPro ─ magazine
    • Subscribe and view online: https://about.usps.com/mailpro/welcome.htm

Sources: U.S. Postal Service, Product Classification; PostCom; USPS Notice of Market-Dominant Price Adjustment Before the Postal Regulatory Commission, Docket No. R2012-3, October 18, 2011; Federal Register Volume 76, Number 205 (Monday, October 24, 2011)