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Postal Changes Take Shape
Eight ways to prepare for the rate case and reduce your costs
By Steve Elias, Target Marketing Magazine

When the Board of Governors of the U.S. Postal Service (USPS) approved most of the recommendations made by the Postal Regulatory Commission in March, it set into motion an often confusing set of regulations and cost increases that will have a wide-ranging impact on direct mail users of all sizes, budgets and markets. Since the initial rate changes for First Class and Standard mail are scheduled to be implemented on May 14—followed by scheduled changes in July for periodicals and catalogs, and in August for mandatory use of Delivery Point Verification (DPV)—hopefully you’ve already begun preparing for these adjustments and new requirements. If you wait too long, you may face postage increases that can throw off your direct mail budget projections and anticipated profits for the year.

The New Postal Deal
What are the changes? The USPS proposes rate increases for all classes of mail to go into effect on May 14. The following link, www.usps.com/ratecase/fcm_summary.htm, will give you access to the latest information on new rates. But understand that this postal rate case is more than a flat-out price increase, though the USPS certainly is faced with the need to address its own increased costs with higher revenues. The “postal reform” label involves a host of other complex adjustments, including realignment of mail classifications, greater incentive to comply with updated sorting and processing equipment, new recommendations on the use of NCOA (National Change of Address) and LACS (Local Address Correction System) processes, and uniformity in mailing dimensions.

In addition to the postage rate increases and the realignment of many class- and rate-qualification tiers, changes on the vendor side also will impact mailing costs. One that will be in place by August is the way the Coding Address Support System (CASS) software will code addresses. CASS, used to append ZIP+4 codes, translates into postage savings, and essentially is the USPS’ stamp of approval for ultimate deliverability, as those codes help to automate and streamline the processing and delivery of mail. Currently the software codes address ranges, meaning the USPS provides a number range for a street address, e.g., 100–500 Main St. If the address you have falls in that range, then the USPS supplies the ZIP+4 code. Come August, however, the USPS will tighten the match criteria, providing the ZIP+4 code only if the address you have is an exact match. So, if you have 507 Main St. and the USPS has 501 Main St., no ZIP+4 code will be returned. Miss enough matches and you could lose out on postal savings.

A change that will occur later, in 2008, will involve change-of-address requirements. The USPS asks that mailers update their files with NCOA data, since this cleansing tool helps produce less undeliverable-as-addressed mail and keeps down its processing costs. Currently the USPS merely recommends that mailers run their files past the NCOA database every six months. However, in 2008 the USPS will require that NCOA cleansing take place every three months for First Class mailers and recommend this hygiene schedule for all other mail classes.

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