provided by: 
During National Postal Customer Council (PCC) Day in September 2006, postmaster general Jack Potter announced that the USPS intends to implement Rate Case 2006-1 in early May 2007—about one year after its filing. The proposed rules changes to the Domestic Mail Manual (DMM) have been published and mail list management software providers are gearing up to modify and distribute conforming software.
Unlike the last rate case, which only raised postage rates, R2006-1 also makes a fundamental change in how the postage rate is determined. And this change may have a greater impact on mailers than the postage rate increase.
Currently, weight alone is the basis for determining the first class postage rate. A three-ounce single piece letter, flat, and parcel all cost 87-cents to mail, despite quite different costs to process the three shapes. R2006-1 recognizes the higher cost to process a flat or a parcel and aligns the postage accordingly: 82-cents for a three-ounce letter, $1.02 for a three-ounce flat, and $1.40 for a three-ounce parcel.
This logic currently applies to standard mail, which has a full schedule of rates based on a combination of shape and weight. Now the concept is being implemented for first class mail.
Defining a Shape
R2006-1 does not change the current definition of a letter, flat, and parcel.
- Letter: maximum dimensions are 6 1/8" high, 11.5" long, and 0.25" thick; maximum weight is 3.5 ounces.
- Flat: maximum dimensions are 12" high, 15" long, and 0.75" thick; maximum weight is 13 ounces.
- Parcel: maximum dimensions are 17" high, 34" long, and 17" thick; maximum weight is 35 pounds.
It does, however, introduce a new requirement for flat mail—that it be rectangular, flexible, and uniformly thick to qualify for automation-based rates. Flat mail that fails to meet these requirements will be re-classified as a parcel or put into a new classification, Not Flat-Machinable (NFM). Some examples of NFM mail are rigid items are CDs and DVDs.
The move to shape-based postage rates is a function of improved USPS processing capabilities. Particularly for letter-sized mail, the USPS has consistently upgraded the equipment used for processing mail by increasing speed and optical character recognition barcode read area.
Overall, the changes are consistent with the USPS emphasis on cost alignment and processing efficiency, and provide incentives for mailers to create mail pieces compatible with USPS processing systems.
R2006-1 also provides incentives for entering flats and parcels closer to their delivery points, eliminates the carrier route and enhanced carrier route sortation levels for automation rate mail, eliminates the non-machinable surcharge for letter mail (instead, it reclassifies non-machinable letter mail as flat mail), and sets the maximum weight for all letter mail—whether first class or standard—at 3.5 ounces. Anything heavier is reclassified as flat mail.
R2006-1 also introduces the "forever" stamp, whose value is equal to the first class mail, single-piece, one-ounce rate at all times, regardless of the rate when the stamp was purchased.
R2006-1 & Mail Piece Design
Because letter mail is the most efficient classification to process, R2006-1 provides real incentives to redesign flats to mail as letters, particularly for first class mail. A flat that can be converted to a letter potentially represents savings of almost 20 percent. Not only will the mail piece not have to pay the higher flat rate, it will actually have a rate decrease. Some ways that flat mail can be converted to letter mail include:
- Folding 8.5x11" sheets and mailing in a 6x9" envelope instead of 9x12"
- Redesigning mail pieces from square to rectangular to meet the aspect ratio of letter mail
- Changing the outer wrap of a mail piece from packaging material (such as a padded mailer) to an envelope.
For this last suggestion, a company called Conformer Expansion Products offers a line of envelope products designed to fit more contents into a smaller envelope. As the name implies, the envelopes are constructed so they expand as the contents increase while still maintaining a rectangular shape and uniform thickness. For more information, visit www.conformerinc.com or call 866/695-4726.
The USPS provides assistance in determining whether a mail piece meets the specifications for letter mail and whether the address location is compatible with automation requirements. By contacting a Mailpiece Design Analyst (MDA) and submitting a PDF of the proposed mail piece design, you can be assured that you will qualify for the lowest possible postage rates. To locate the MDA that serves your area, visit pe.usps.gov/mpdesign/mpdfr_mda_lookup.asp.
R2006-1 & Address Quality
R2006-1 also promotes address standardization and hygiene as a requirement for automation-compatible worksharing postage discounts. Having standardized addresses—which means using the USPS-designated format, standard abbreviations, and +4 in the ZIP code as well as printing a delivery point barcode on the mail piece and locating the address in a machine-readable area—has other benefits besides lower postage costs. The mail moves faster through the mail stream and has greater delivery accuracy.
Currently a POSTNET barcode with delivery point and check digit is enough to qualify for automation-based postage discounts. However, R2006-1 imposes a new requirement—delivery point verification (DPV). DPV checks the validity of any individual address and also can detect if the address is a commercial mail receiving agent and will indicate whether secondary address information is missing.
Even though the USPS has filed the proposed rules, R2006-1 has not yet been accepted by the USPS Board of Governors and therefore is not yet settled. Even so, the emphasis on mail piece characteristics—particularly shape—as well as address quality and hygiene will remain the hallmarks of this rate case.
Nancy DeDiemar is the president of Printing Resources of Southern California, a quick print shop in Upland, CA, offering printing, copying, electronic prepress, and mailing services. Nancy is the co-publisher of Printips (www.printips.com), a newsletter subscription service for printers. Contact her at Nancy@printingresources.com.
author: by Nancy DeDiemar