The weird part about April's upcoming rate change is that for the first time in almost a century, the prices are going down. Customers will actually save an average of 4.1%! Yes, you read that right. For the past 18 years, I have been creating comparison charts for my clients that go over the changes in postage rates to show how it will affect their budgets. The reason that I do this is that when the USPS talks about a percentage increase, this is overall. Based on the type of mail you do, the increase could be higher or lower. And this time, the prices are going down!
It may sound too good to be true, but absent of Congressional, presidential or court actions, the rates are slotted to go down on April 10, 2016. It has been difficult to get congress to agree on the changing the name of a Post Office, let alone a major rate decrease that can only benefit their constituents and with it being an election year, we do not expect any setbacks to this change. The other issue is timing. As I am writing this article there is only one month until the rate change. Things would need to move very quickly to stop this change especially since the mailing vendors have already started to implement the rates to make sure their systems are compliant.
The next thing you may be asking is why is this happening? Postal rates are supposed to be tied to the Consumer Price Index which today is running in the 0-2% range. The USPS needs their rates to be in line with this index except in the following circumstances:
1. Unused Rate Adjustment – They did not adjust past rates to the full levels allowed.
2. Exigent Circumstances - They have drastic conditions that require them to raise rates to higher levels.
In January 2014, the USPS approved a 4.3% exigent surcharge increase because of their dire financial situation, mainly due to the recession and declining First-Class mail volumes. An order from the Postal Regulatory Commission (PRC) requires this 4.3 percent exigent surcharge to be reversed after the Postal Service has collected additional funds totaling $4.6 billion. They are expected to hit this threshold by April 10, 2016.
The remainder of this article will look at the main classes of mail and will break down the specific savings. Hopefully this will help you budget for these changes by seeing how it will impact your mail. It is impossible to compare every rate but these are the most common classes used by business mailers throughout the United States. I hope this type of comparison is helpful and we will continue to post upcoming rate changes on our website at www.postaladvocate.com.
Download the PDF (below) to get the full story and analysis!
Adam Lewenberg, CMDSS, MDC, President of Postal Advocate Inc., runs the largest Mail Audit and Recovery firm in the United States and Canada. Their mission is to help organizations with multi-locations reduce mail related expenses, recover lost postage funds, and simplify visibility and oversight. Since 2013, they have helped their clients save an average of 57% and over $21 million on equipment, fees and lost postage. He can be reached at (617)372-6853 or email@example.com.
View April 10 2016 USPS Postage Rate Decrease.pdf