Although mailers have several compelling reasons to migrate to permit mail, some still hesitate because they believe a meterless mailing operation is difficult to implement and complicated to maintain. What many fail to realize is that permit mail uses many of the same processes most mailers use today, with the addition of quality control checks to ensure that mail is produced as directed by USPS-certified software. In this second part of our two-part series, we outline what it takes to start using mailing permits.
There are currently two basic methods of permit mailing:
1. Manifest mailing allows a mailer to pay postage due on mixed weight mail by calculating postage due for each piece using known characteristics of the contents. Mail is prepared with a manifest "keyline" above the delivery address and submitted for delivery with a report detailing postage due for every piece.
2. Traditional permit or "bulk" mailing requires a mailer to produce identical-weight mail by maintaining separate processes for each weight class. The USPS weighs trays or permit mail and divides by the individual piece weight to determine the number of pieces and corresponding postage due.
Mailing operations that can conveniently process mail
by weight will want to investigate the traditional "bulk" permit mail alternative to meters. However, since most First-Class mailers produce mail that varies in weight from piece to piece, manifest mailing procedures are a more feasible option.
The USPS provides Business Mail Entry Analysts (BMEA) to help mailers design and implement a manifest mailing operation, including consulting on key decisions such as which USPS office is the most appropriate location to receive their mail. Once drop locations have been selected, mailers apply for a mailing permit from each location and pay both a one-time fee of $150 and an annual mailing fee of $150.
Mailers must also establish an account in the USPS Centralized Account Processing System (CAPS). This is used to pay postage and fees at multiple post offices. Unlike meters, this system deducts funds directly from an account that is owned by the mailer and does so only when the mail is submitted for delivery. This means that the mailer receives the benefit of the additional period of "float" when money would otherwise reside on its meters.
The permit application takes about one day to receive USPS approval. Mailers who want to manifest must then submit the Manifest Mailing System application (see www.usps.com) to the BMEA with samples of the mail and reports that will be created by their manifest operation. The mailer will also need envelopes that are preprinted with a permit number or otherwise have a way of applying the permit indicia to the envelope.
Once permits are approved, a USPS representative observes the mailing operation and performs quality control checks on the first few mailings that are produced. Mail is checked after it has been assembled into trays to be sure that mailpieces are in the proper tray (per the manifest), that the pieces meet quality standards and that the quality control form has been completed by the mailer. If the operation passes the test, a form is jointly executed by the USPS and the mailer to signify official approval of the manifest mailing system.
Upon receiving approval, mailers are responsible for performing ongoing quality checks and maintaining records of the frequency of checking and any attempts to correct detected errors. The USPS then performs random checks on 20% of the mailings that are deposited for delivery.
Pre-qualification vs. Physical Sorting: Which Is Best?
The reduction or elimination of postage meters can be an effective way to contain mailing costs, but the decision to migrate cannot be made without considering the process of qualifying mail for workshare discounts on postage. For many companies, a combination of sorting mail prior to print (pre-qualification) and physical sorting after finishing is the most effective way to earn discounts on postage. These processes can be used regardless of postage payment method, giving mailers ultimate control over their operations.
But how does a mailer decide what portion of its mail to pre-qualify and what mail to run on a sorter? There are four critical points to consider when answering this question, both in terms of individual mailings and the total mail volume that a company produces.
Density of mail to a ZIP Code: This measures a mailer's ability to achieve postal discounts. Generally, the higher the density of mail within a given region, the more likely it is that a mailer can consistently earn discounts on postage. Pre-qualification is easily justified when densities within individual mailings meet minimum volume requirements. Conversely, mail destined for a broad region is less likely to earn the deepest rate-class discounts. Mail that does not qualify for a three- or five-digit rate class will be sent at the next highest piece rate up to the full rate if not co-mingled with other similar mail. In this scenario, co-mingling on a sorter can earn significant discounts.
Availability of mailing-specific data: This measures a mailer's ability to access data delivery address, weight and thickness of mailpiece contents to determine postage for each mailpiece and create a manifest report. This information is obtained either during document generation or as a post process to extract data from a print stream. In either case, the information is provided to a USPS-certified product that will determine the optimal sort scheme, provide the content of a manifest keyline and generate a detailed manifest report. In general, this data is more readily available to in-plant operators as opposed to service bureaus. This makes in-plant operations better candidates for manifesting and service bureaus good candidates for physical sorting.
Control over timing and similarity of print jobs: This measures the degree of control over when mail enters the USPS process and the similarity of the various mailings produced. This attribute is important if a mailer is considering combining mail from multiple print streams together prior to printing to increase the volume or density of mail to a ZIP Code. Factors that affect a mailer's ability to co-mingle mail prior to print include:
Additional labor requirements: Manifesting or other mail preparation methods that require careful placement of mail into trays may necessitate additional labor at the end of the inserter to maintain the presort order of mail as it comes off the belt. Depending on the number of operators, and the speed and number of inserters in use, a mailer may prefer to use sorters to process mail after inserting. This allows a mailer to maximize throughput and minimize labor by off-loading mail prep operations to the sorter.
Evaluating a mailing operation using these guidelines gives a clearer picture of the advantages a mailer can hope to gain from each option. Some will clearly decide that their outbound mail is sufficiently similar and dense to justify manifesting. Others may send dissimilar mail at such varied times to such a broad distribution that physical sorting offers deeper discounts on postage. Most mailers, however, fall somewhere in the middle and would benefit from a combination of pre-qualification and sorting for optimal postage discounts and operational efficiency.
In general, the more similar mailings are to one another and the more frequently they are mailed, the easier it is to justify co-mingling mail prior to print to increase ZIP densities and earn discounts. In this scenario, a mailer will see greater benefits from manifesting. In contrast, low ZIP-density mailings are good candidates for sorting to earn additional discounts since they can be co-mingled with other mail to increase density to a region. Regardless of whether and how discounts on postage are achieved, every mailer has the potential to eliminate the need for postage meters.
Sarah Elliott is BÖWE Bell + Howell Software Business Solutions Business Manager of Postage and Data Manage-ment solutions. Contact her at 410-949-2630 or visit www.bellhowell.com.