First-Class Postage Rates Increase Hides the Real Story

Posted on | comment | CSG Direct Mail helps you get better results with our unique database marketing experience in personalized digital printing and direct mailing services

We just completed the update on our postage rates short sheet that we share with our clients and prospects alike. It’s a quick glance sheet of the most common rates achieved with all of our mailing services clients. You can find the new postage rates on our homepage.

During my last 20 years in direct mail I have studied the interesting dynamics of the varying rate adjustments made by the US Postal Service each year.  You can tell a lot about the troubles or changes needed at the Post Office by finding the nuances in the rate adjustments.

For years the US Postal Service had been spreading the rates out to create benefits for automation processing.  It was a huge trend for about a decade.  I am noticing that this is no longer the big push over the last few rate cases.

Looking at the First-Class Mail postage rates this year I see that the First-Class stamp went up 5% to 44 cents.  The First-Class non-automation rate went up as well – from .394 to .414, which is also a 5% increase. Compared to the automation rates for First-Class Mail which only went up 3% it would look like the same automation rate spread was continuing.

In standard postage rates (formerly 3rd class), on the other hand, we see a different trend. Standard non-automation rates practically stayed the same while the automation postage rates went up 4-5%.

This area of the postage rates system is the US Postal Service’s bread and butter. Standard postage is the most common rate paid on every piece of direct mail sent. We have spent years creating innovative ways to help clients elminate First-Class postage costs by moving them to standard postage rates with creative add-ons like NCOA and Track Direct Mail services.

To me, this says a lot about the US Postal Service trying to make money at the risk of scaring off automation investment. The biggest value of a mailing services provider is that they can get you automation rates. Many of us have invested millions of dollars in equipment to do so.  The Post Office continues to put more of the burden of equipment and requirements on the direct mailers. They appear to be seeking ways to prosper under the huge burdens in labor and government intervention they contend with.

In nonprofit postage rates we see this same trend continue. In this case though, non-automation postage rates go down while automation goes up. That is complete irony to me.  I can see though that they may be trying to keep the business of the local churches and nonprofit groups that handle their own mailings.

Recent new requirements by the US Postal Service has made it tougher on the little nonprofits and small realtor groups.  It is completely backwards in my opinion to punish those that follow the program and provide automated mail and then reduce the rates for those that don’t get with the program. Nonprofit postage rates went up 4-6% in the automation category as opposed to down 1-3% for non-automation. This sure has reversed the trend I have watched over the last few decades.

The biggest increases of all (18%) was in the surcharges the US Postal Service charges for non-machineable pieces. Keep this in mind and make sure you are working with a mailing services company like ourselves that is US Postal Service trained and certified.

We should talk about this more – feel free to comment.

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