Marketing Mail Saturation shoppers get higher increase
By Max Heath, NNA Postal Chair
Max Heath, NNA postal committee and KPA President in 1987, is a postal consultant for Landmark Community Newspapers, LLC, and NNA members. He is sponsored by Interlink Software. Email email@example.com.
A Postal Service rate case was filed October 10 for changes effective January 27, 2019. The inflationary cap allowed USPS was about 2.5%. Here are details, with nearby charts of prices and percentage increases, fleshing out the proposals:
Carrier-route sorted (6-124 pieces per route) newspapers entered at the DDU post office (office of delivery) will increase a modest 1% to 9.8 cents for a four-ounce newspaper, as shown in column 3 of the chart, and even less for heavier papers, falling to about a half percent. Piece price increases just one-tenth of a cent to 6.7 cents. Pound prices get no increase, keeping the impact low.
This is the sort most commonly used by NNA members. Those reaching High-Density levels for 125 pieces or more on a route and entered at DDU (column 5) will encounter similar increases, 1.25% to 8.1 cents at 4 oz.
The shock comes for Saturation prices (column 6) entered at DDUs. USPS wants more for Saturation mail in the Marketing Mail (formerly Standard Mail) class. Perhaps they wanted some reciprocity for Periodicals. But the 4-ounce paper gets slammed with 4.6% here, declining slightly with weight. The piece price of 3.4 cents goes to 3.7 cents, with no pound increase.
The DDU/Saturation hike is unfortunate for Requester titles, many of whose business models call for saturating their key ZIP codes. The 2006 postal law granted Requesters In-County pricing for the portion requested, a minimum 50% or more for qualification. With another 10% allowed for sampling, most Requesters pay DDU Saturation In-County prices for 60% or more of their distribution. The piece hike of 8.8% to 3.7 cents is also modified by the flat pound prices as weight increases. 4 oz. paper would pay 6.8 cents.
Requester Periodicals would also pay higher Regular, or Outside-County, prices on about 40% of their Saturation copies. That price increases similarly, 8.2% from 14.7 cents to 15.9 cents. Again, pound prices are flat meaning lesser percentages, especially with weight. A 50% advertising, 4-oz. Requester sent Saturation would pay about 21 cents per copy on the Outside-County portion vs. 19.9 cents now, for a 5.5% increase.
Good news for those palletizing their Requester titles: Pallets entered at the DDU would remain the same $3.
USPS announced a 2.54% increase for this mail but admitted smaller-circulation Periodicals will see above-average increases “due to smaller circulation, lighter-weight pieces, and a higher percentage of nonmachinable pieces.” That’s where community newspapers live.
Pound prices, zoned for advertising and nonadvertising, are kept the same just as for In-County. But sharply higher piece, bundle, and container prices spell continued bad news for copies outside the county. One good news item is that the carrier-route price, for those with carrier-route sorted mail in nearby counties or beyond, stays the same at 20.5 cents. And the Firm bundle piece price only increases 1.4% to 21 cents.
Piece prices on Part C, 3541, get uglier after that. While a 5-digit Machinable barcoded piece only increases 1%, the rest would be hiked by 6-7% in lines C1-C8. And Machinable nonbarcoded piece prices increase by 5-7%. Pieces that are Nonmachinable in lines C9-C16 would increase by from 2-12%, depending on sortation.
Bundle prices in Part D will also increase much above averages, from 6-22%. Firm bundles come in for rough treatment here, increased by 12-22%. Postal Service justified higher bundle and container prices by the need to raise more revenue for Periodicals, still “under water” by not covering costs as USPS estimates them.
Sack/tray prices are due to increase 9-11% for the destinations and entry points used by most community newspapers. NNA still hopes to earn a flats tray discount at some point.
Pallet prices for DDU entry carrier-route mail, as mentioned under Requesters, get stable pricing of $3. The same pallet entered at the destination SCF would pay $27.22, up $5.62. Most newspapers do not enter such pallets, but it shows the price signals to encourage more mail to be entered at delivery units.
After years of below-inflation increases in the former Standard Mail class, the DDU/Saturation price is targeted for a 3.85% increase to 16.2 cents up through 4 oz., 2.68% at 5 oz. and slightly declining percentages with more weight. Saturation prices apply to addressed, walk-sequenced copies going to 90% of active households, or 100% when using Simplified Address. Reference accompanying charts.
DDU-entered High-Density Plus (300 or more pieces per route, in W/S) will pay 3% more up to 4 oz., or 16.9 cents. Prices decline with weight, closer to inflation and below.
DDU High-Density (125-299 pieces per route, W/S) gets the most benevolent treatment of just 1% hike up through 4 oz. and less that 1% with weight.
Note that the Saturation price for entry at the Sectional Center Facility, rarely used by newspaper shoppers, is hit with an 8.5% increase, another price signal.
EDDM Retail price for Saturation pieces dropped over the front counter of post offices, goes to 18.7 cents, up 5% from 17.8 cents now. This is competitor to some newspapers, but a customer to others who print them.
First-class Mail Forever stamps would increase by 5 cents (2.5%) to 55 cents for one ounce. Additional ounce price would drop 28.6% from 21 to 15 cents. Meter price would increase from 47 to 50 cents (6.4%). Postcards stay the same, 35 cents.