NAA convinces USPS to create rate category that could benefit TMCs
It has been a long time since we received good news from the U.S. Postal Service. That came on Thursday, when the USPS filed its annual rate changes with the Postal Regulatory Commission. The filing contains a new rate category, high density plus, for standard mail flats such as newspapers’ total market coverage products.
For the last three years, NAA has met with USPS management to discuss the rate disparity between standard high density enhanced carrier route mail (used for newspapers’ TMC products) and standard saturation enhanced carrier route mail (used by our direct-mail competitors and some newspapers in areas where circulation is low). NAA recommended a new rate category to the Postal Service between high density and saturation, recognizing that newspapers mail TMC pieces at volumes well above the high-density threshold (150 pieces per carrier route) but below the saturation threshold (90 percent of residential households). Under current rules, newspapers are mailing more pieces but can’t qualify for deeper discounts.
The Postal Service listened to NAA and developed the new high density plus category for mailings of at least 300 pieces per carrier route. Newspapers’ TMC mail qualifying for the new category will receive no rate increase in 2013, compared to today’s high-density rates. We believe many newspapers will benefit from this development, although it may not be enough to keep a newspaper TMC product in the mail, in light of the Valassis negotiated services agreement and other rate advantages given to saturation mail since 2009.
High-density mailings not meeting the new “plus” threshold will be subject to rate increases that vary based on packaged weight. High-density flats under 3.3 ounces will be increased by 2.3 percent. The per-piece increase for items weighing more than 3.3 ounces will range from 2.2 percent to 4 percent. However, after factoring in the pound rate, net increases will be 2.33 percent or less. Saturation mailers will see increases slightly higher than those for high-density rates.
The overall increase for periodical rates is the maximum permissible – 2.56 percent. The within-county rate will rise 2.91 percent; for outside-county, it will go to 2.546 percent. Periodical rates do not cover costs, so the Postal Service will impose the maximum increase for the overall class under the statutory price cap established by the 2006 postal reform law.
Finally, the Postal Service will eliminate the surcharge for repositionable notes, which often are found on mailed newspapers and TMC packages.
New rates will take effect Jan. 27. View a chart outlining standard mail and periodical rates.
First Published: October 16, 2012