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2% USPS Rate Hike Approved

May 11, 2015 By Heather Fletcher
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Postage prices are increasing on May 31, USPS confirms on Friday. A 2 percent, almost-across-the-board rise will happen on that day now that the Postal Regulatory Commission approves of hikes on all mail types.

"Rate changes among the five major service classes are to include an average 1.949 percent increase for First Class mail, 1.926 percent increase for Standard Mail, 1.966 percent increase for Periodicals and a 1.787 percent increase for Package Services," USPS tells Target Marketing on Firday. "Single-piece, one-ounce, stamped First Class mail letters are set to remain at 49 cents, with Forever Stamps also frozen at 49 cents. Additional ounce rates for letters will rise by one cent to 22 [cents], with letters to all international destinations rising by 5 [cents] (4.3% percent) to $1.20, and postcard rates rising by a cent to 35 [cents]. Metered single-piece letters will see prices rise by half a cent (1.1 percent) to 46.5 [cents]."

Originally, USPS wanted to raise rates on April 26, but the PRC told USPS to fix its requests for three mail types: Standard Mail, Periodicals and Package Services. On Thursday, PRC approved the USPS changes and its request (opens as a PDF).

"The new pricing and classification changes for all market-dominant mail classes and competitive products take effect on May 31, 2015," USPS tells Target Marketing on Friday. "Additionally, the postal service is able to move forward with the remaining calendar year 2015 promotions: Color Transpromo, Emerging and Advanced Technology and Mail Drives Mobile Engagement."

Also on Friday, DMA SVP of Government Affairs Peggy Hudson tells Target Marketing about the organization's reaction.

"While businesses in the direct mail industry are never thrilled to face a rate increase," she says, "as customers of the USPS, we look to the USPS and PRC for continued future predictability and stability regarding rate-setting practices."

GrayHair Software sent out a "Special Bulletin" to its newsletter subscribers on Thursday afternoon detailing the problems this may present for direct mailers. Angelo Anagnostopoulos, VP of postal affairs for the company, provides this list:

  • Mailers have been preparing mailings that will drop after May 31 using existing pre-sort software and preparation rules.
  • Vendors are aggressively working on releasing software that complies with the new preparation rules and pricing. This does not give much time to implement, test and use the new software for mailings dropping after May 31. In the past, mailers have had more than 30 days to implement.
  • Issues still exist with the publishing of the USPS Mail Direction File to fully support Flats Sequencing System (FSS) preparation that will need to be addressed so that there is no loss of discounts. [Editor's note: Please see additional information about this below.]
  • The USPS will need to communicate the grace period for entering mail into the system that has been verified and paid for on or before May 31 and is being delivered to the USPS after May 31. In the past, this has typically been two weeks.

In an email to catalogers on Thursday evening, Hamilton Davison, president and executive director of the American Catalog Mailers Association, doesn't sound happy.

 

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