On August 29, 2021, and again on July 10, 2022, the USPS had the largest rate increases in over 10 years, and the combined 12-month increase is daunting at 10-30%! It also impacts the largest mailers the most due to higher percentage increases for production mail categories.
We have been creating comparison charts for our clients that go over the changes in rates to show how it will affect budgets. The reason we do this is to provide a true comparison versus the overall average percentage increase that the USPS talks about. Based on the type of mail you send, the increase could be higher or lower than the announced average. Also, when you look at the new rate charts provided by the USPS, they typically will not show the level of detail needed (previous and new rates, side by side) to see these differences.
The largest volume mailers, who work with the USPS to have the highest level of automation, will see the biggest increases. This mail makes up 87% of the total and has fewer options for suppression.
· Automation First Class Mail: Going up 7% (Letters) and 13% (Flats)
· Marketing Mail: Going up 6% (Letters) and 8% (Flats)
Hopefully, this will help you budget by seeing the impact of the most common services that you use today. At the bottom of this article there is also a link to an excel tool where you can plug in your mail volumes to see the impact to your organization.
First-Class Mail Single Piece: 3.4% – 14.6% Increase
The price of a stamp will go up by $.02 and metered letters are seeing a $.04 increase to $.57. A single piece flat is increasing from $1.16 - $1.20. The biggest change is the additional ounce rate; increasing from $.20 to $.24, making heavier items significantly more expensive.
First-Class Mail Commercial: 7% - 20.7% Increase
Automation letters are going up six to seven percent, and Flats are seeing 13% average increases. Flats will have significantly higher impacts due to the additional ounce rate going up by $.04.
The biggest change in this category occurred a few years ago when they increased the weight limit for the Commercial Letter rates to 3.5 ounces. The goal was to increase the value of the mail piece allowing customers to add additional content at the same price.
When you look at the chart above and compare the rates of a three-ounce metered letter at $1.05 to a Commercial rate of $0.455 it is a 51% savings! This is a big win for presort services that are now more valuable because of the savings they can provide. Also, for flats, (9 x 12 or 10 x 13) consider folding those into 6 x 9 envelopes. The savings can be significant with these new rates and weight savings. A three-ounce flat at $1.68 now could cost as little as $0.455 at the letter rate, assuming it could be automated through in-house software or presort services.
Marketing Mail (Formerly called Standard Mail): 4% to 16.5% Increase
Marketing Mail Letter rates are increasing at approximately six to seven percent while Flats are going up seven to 10%. The destination entry level Letter discounts are increasing up to 10-11%, while Flats are holding at the DNDC level but increasing 15% when moved to the sectional center facility (DSCF), as you can see from the table below.
Additional Rate Change Items
This is the second largest increase we have seen in years with the biggest occurring in the last 12 months! Mailers are going to need to look for savings strategies to help offset these changes. Our recommended strategy is to create visibility to all mailings and look for automation methods where applicable to reduce the cost and streamline production.
To budget for this increase, you need to look at the type of items you are sending, and the weight and zones that are most common, to truly estimate the impact. We have developed a Microsoft Excel-based budget calculator that you can download for free that should help you better plan for this year. Some of the most popular USPS classes are going up at the highest rates but luckily there are ways to help mitigate this through automation and technology.
Adam Lewenberg, CMDSS, MDC, President/CEO of Postal Advocate Inc., runs the largest Mail Audit and Recovery firm in the United States and Canada. They manage the biggest shipping & mail equipment fleet in the world and their mission is to help organizations with multi-locations reduce mail and parcel related expenses, recover lost postage funds, and simplify visibility and oversight. Since 2011, they have helped their clients save an average of 56% and over $73 million on equipment, presort, avoidable fees, and lost postage. He can be reached at 617.372-6853 or firstname.lastname@example.org. Visit https://postaladvocate.com/rate-change-tools/ for more information.