Jan. 29 2007 11:11 AM

To ensure that the stream of revenue-producing mail flows without interruption and is produced and mailed at the lowest possible cost production mailers must gain a full understanding of their business needs and how today's solutions can meet them.


That's especially relevant right now with the USPS in the third phase of its four-step Digital Meter Migration mandate. This two-part series examines the most frequently used and cost-effective postage evidencing options for business mailers permit imprints and digital metering and discusses the optimal applications for each.


The Digital Migration

Over a decade ago, USPS formally identified the need to increase the security of postage revenue while increasing the overall value of the mail. In 2001, it began working with postage meter vendors on a multi-phase plan to provide new meter technologies that enable more efficient mail processing and ensure the security of postal funds.


As a result of this effort, the Postal Service mandated a new type of postal imprint Information Based Indicia (IBI) to provide the most secure means of postage evidencing. The IBI postage imprint contains both a machine-readable barcode and information that's readily visible to the naked eye. It includes "metadata," such as postage and mail processing information for security and automated processing functions and identifying information about the postage meter and the postage payment for the mail service.


In the future, these meters will also serve as an interface between the Postal Service and the mailer and, therefore, deliver even more value to meter users. For example, the two-dimensional indicia printed by these meters can be used to provide additional information about the timing of delivery clearly increasing the value and effectiveness of the mail.


Development of the IBI imprint is just one aspect of

the USPS Digital Meter Migration, however. Phase I of the program saw the retirement of mechanical meters, while the second phase witnessed the replacement of all meters that needed to be manually reset by a USPS employee. We're now in Phase III of that plan, which requires that letterpress (that is, non-IBI compliant) meters be retired by December 31 of this year. Phase IV, which will affect meters without a "time out" feature (disabling meters that are not reset within a given period of time), will be completed by December 31, 2008.


Time to Look at the "Big Picture"

As this phased Digital Meter Migration continues, many high-volume mailers have seized the opportunity to review their options for postage evidencing in an effort to drive down costs, at least in part by qualifying for postage discounts.


These savvy mailers are looking at the "big picture" as they confront two distinct issues how to obtain discounts and how to best perform their postage payment and evidencing. They're taking a hard look at key criteria such as postage and production costs, capital investment, ability to increase (or decrease) the effectiveness of the communication, the limits and costs of information technology and other resources and alignment of the mail production process with the organization's overall customer communication goals. ·


There are three steps to earning postage discounts address standardization, address cleansing and mail sortation and mailers can either perform the steps themselves or outsource one or all of them. The number of daily mailings, their size and ZIP Code density, workflow, labor costs and equipment costs are important factors to consider in designing a postage discount strategy.


The advantages of handling address standardization and cleansing processes in-house include minimizing the cost of cleansing, controlling potentially sensitive data and having the ability to easily update corrected address information back to the company's databases. Some leading-edge organizations have discovered an additional benefit to keeping mailing efficiency and data quality activities

in-house: they use standardized and cleansed customer data for processes that enable them to better personalize their customer communication and offer cross-sell and

up-sell opportunities.


Mail sorting options include using presort software to sort the mail and document how it should be placed in containers, doing machine mail sorting with an in-house multiple line optical character reader that can read the address printed on the mailpiece or outsourcing to a presort services company, which can commingle mail from many different companies to improve postage discounts.


Pre-canceled stamps, by permit imprint or meter imprint, pay for postage on presorted mailings. For the rest of this series, let's examine those two methods, which are the most cost-effective and most frequently used evidencing options for business mailers.


Permit Imprint and In-line Indicia Printing

Production mailers are authorized to mail pieces without affixing postage if they have a Permit Imprint Advance Deposit Account. A permit imprint indicia must appear on each mailpiece to indicate that postage has been paid. The funds covering postage must be deposited into the mailer's Permit Imprint Advance Deposit Account either prior to or at the time of a mailing.


Larger volume mailers can also link their permits to bank accounts, using the USPS CAPS program. This program allows funds to be transferred automatically from the mailer's bank account into their permit to cover postage expense at the time of mailing. Permit imprint indicia can be used for First-Class Mail, Priority Mail, Standard mail and Package Services. Mailings must be deposited at a Bulk Mail Acceptance Unit or the mailer must establish an in-house Detached Mail Unit to verify and accept the mail.


Using permit imprint allows the mailer to pre-print the permit imprint indicia on their envelopes and eliminates the need for postage meters and supplies. When the mailer uses envelopes with pre-printed permit imprint indicia "in-line," the production workflow can be simplified, since the mailer doesn't have to worry about metering mail at different rates for different presort discounts.


However, under some circumstances, it's best to print the permit imprint indicia at the time of production rather than using envelopes with pre-printed permit imprint indicia. In-line indicia printing eliminates the need for managing inventories of pre-printed envelopes and allows mailing dates to be printed as part of the indicia, which is an important feature for a number of industries. The technology is now available to do this reliably and quickly enough to meet the needs of high-volume production lines without complicating the production workflow.


Permit Mail Management Issues

It's important to remember that permit imprint indicia mail is usually limited to identical piece weight mail. Permit payment of non-identical piece weight mail is possible only under the USPS Optional Procedure, Alternate Mailing Procedure or Manifest Mailing System programs. Optional Procedure and Alternate Mailing Procedure programs are very highly specialized, but the Manifest Mailing System has broader applications and will be discussed in part two of this series.


The greatest weakness of permit mail is that it's often difficult for mailers to manage. If mailers aren't printing the permit imprint indicia in-line as the mail is produced or if they use multiple permits, maintaining and managing envelopes with pre-printed indicia can be cost-prohibitive. Another management issue is that the USPS requires mailers to maintain separate permits at each post office where they deposit mail.


But a more significant problem is that the permit imprint option doesn't incorporate the security features and benefits associated with the IBI technology being advocated by the USPS. Unless the postage is being paid for via the CAPS program, mailers must fully fund the correct permit in advance of the mailing. If they underestimate their postage needs, the mailing might be held up until the balance is deposited into the permit account. In some cases, the USPS returns the entire run to the mailer, thereby interrupting both the mailstream and cash flow.


Next month, in part two, we will examine the optimal uses of the manifest option for permit imprint and digital metering.


Lloyd M. Moss is Director of Postal Affairs and presort solutions for Group 1 Software, a Pitney Bowes company. For more information, please call 301-731-2300 or visit www.g1.com.