March, 2008 report: Postal rates go down -- and up

by Bob Terry

Two significant events for nonprofit mailers occurred recently. The United States Postal Service has announced new postal rates which will take effect May 12.

Nonprofit magazine mailers using Standard Mail will enjoy a 1.2% decrease in postage rates. Magazines using Periodical Mail will experience a 2.7% increase in postage.

The reduction in Standard Mail is highly unusual. Some observers see it as an attempt by the Postal Service to stop the downward trend in mail volume in the Standard Flats category.

Envelope size mail entered at Standard Mail rates will experience a 0.7% increase.

Periodical mail experienced small variations in different rate cell categories. Basically, Within County and Outside County periodical rates both suffered a 2.7% increase.

Under current law, the Postal Service is authorized to raise rates annually but no more than the rate of inflation. The rate of inflation for the past year was set at 2.9%.

On February 28, Postmaster General John E. Potter announced the Postal Service will propose May 2009 as the implementation of what the Postal Service calls the Intelligent Bar Code. The implementation date will coincide with the next set of price increases for postal services.

The IBC will replace the current Postnet Barcode by May, 2010. Discounts for automation compatibility for all mail will depend on how extensively a mailing uses the new IBC. The greatest discounts will go to mailings which place the IBC on each mailing piece as well as on all mail containers. Lesser discounts will be afforded mailings that place the IBC on just the mailing pieces.

No discounts will be available to mail that does not use the new IBC.

The Postal Service believes the new IBC will help transform postal service by allowing officials and mailers to track their mailing through every step of the mailing process.

The IBC is a larger, more complicated barcode than the current Postnet Barcode and requires more computer space. Publishers should immediately talk with their mail service providers about changes that may be necessary to accommodate the requirements of the new IBC.

Information about the new prices effective May 12, 2008 www.usps.com/prices and about the new Intelligent Bard Code can by found at http://www.usps.com/intelligentmail/welcome.htm