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Most Recent USPS/ SMC Chat on Products & Pricing

Written by: Donna Hanbery, Executive Director | Saturation Mailers Coalition

May 2016

Dear SMC Members:

Last week I was in Washington for several days of meetings that included opportunities to talk with Postal Service representatives about “their thoughts” on products and pricing changes that might occur with the 2017 rate adjustment.  Here is a brief recap of take aways from my conversations of last week and other postal happenings.

Changes in Standard Mail Rate Design

The USPS is still “noodling” over potential chances in the Standard Mail piece/pound rate design.  I have stressed to the USPS that any change in the rate design that could result in a higher than CPI adjusted rate in 2017 for pieces 3.3 ounces or less, any requirement for mailers weighing heavier pieces to pay for more weight than they are sending/using, or reductions in the drop ship discounts our members earn for bringing their mail to the DDU or SCF, could have a very negative impact on shared mail programs and free papers.  I believe the Postal Service is listening.

In my most recent communication with Postal Service representatives on product and pricing I was told the following:

•           The USPS heard us on our concern about “protecting” the piece price so that any effective increase in the Saturation/High Density mail rate for pieces 3.3 ounces or less is not significantly different from the CPI price adjustment.  It appears there is some appetite or potential for raising the breakpoint from 3.3 ounces to 3.5 or 4 ounces.  I have stressed that this would be “great” as long as they do not start charging everyone for extra weight but keep the piece rate the same, but for a CPI adjustment.

•           They are still looking at what might be done for heavier pieces.  They understand our concern about “incremental”/gradual rate changes rather than charging in “bands” for more weight than a shared mailer might sell or use.  I was assured they are looking at “smoothing out” any increases.

•           Finally, the USPS folks looking at this have recognized that it might be better to “take a little more time” to settle all this.  In other words, they are still thinking about things.  The USPS is working to finalize any and all product, pricing and “simplification” changes between now and the MTAC meetings in July.  It is possible the USPS will not do anything next year with the Standard Mail piece pound formula.


Officer Announcements

CLICK HERE for an Industry Alert on some new appointments with USPS officers.


Reform Discussions

Last week the Congressional Oversight Committee for the Postal Service conducted hearings and  took testimony from the Postmaster General, and other stakeholders, about the Postal Service’s financial problems and reform.  Given all of the acrimony and consternation with an election year, the prospects for postal reform passing the House and Senate do not seem bright.  But it appears the House Oversight Committee is trying to get some consensus on a reform proposal that would include changes in the prefunding requirements, changes in postal health care to require Medicare integration, potential changes in how the Postal Service is required to invest its funds with low interest treasury investments.  More controversial changes include the continuing request by the Postal Service, and unions, to “give back” or increase today’s base postal rates by all or some portion of the 4.3% exigency rate that ended in April.  Put another way, the Postal Service is saying that it cannot achieve financial stability unless it is given a permanent rate increase higher than the CPI.  Some industry associations, and all of the postal unions, have supported a reform bill that would “give back” the Postal Service the exigency increase in connection with a future rate adjustment.  The Postal Service also wants more product and pricing flexibility and these proposals have less support.

At the present time, it does not appear there is any action item on the table with all of this.  But if anything is put together or there is any movement on the development of a proposal, I will keep all members informed.


Association Updates - Thank You AFCP

SMC is now officially “over 20 years old.”  We were organized and had our initial formation meeting in early 1997.  This year was the 20th year I was invited to present at the annual meeting for the Association of Free Community Papers.  I want to thank AFCP, and the other free paper associations, for their reciprocal membership and support.  The mailers’ roundtable session I conducted at the early hour of 7:00 a.m. in San Diego was full of innovative ideas and examples of how mailed free papers have been using the Augmented Reality Technology, and an app known as Layar, to bring papers and advertising to life.  Last week in Washington meetings I had an opportunity to speak briefly Gary Reblin, the USPS Vice President of Innovation and the person responsible for Postal Service Promotions.  I thanked Gary for all the good work he has been doing in this area and let him know that many of our members were taking advantage of the promotions to both sell ads and to support good causes like the PaperChain charity Fisher House and the AFCP travel business.

For all of you who have paid dues and made pledges, my thanks.  There still are a few members that have not sent in a pledges or contribution for 2016.  I will do a second quarter report at the end of June.  I will hope to have a few more members step up and make a pledge, or send your dues check, by mid-year.  Thanks.



Questions? Contact: Donna E. Hanbery, Executive Director | Saturation Mailers Coalition

33 South Sixth Street, Suite 4160, Minneapolis, MN 55402

(612) 340-9350 Direct Line

(612) 340-9446 Fax

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Contact Details

Free Community Papers of New York
109 Twin Oaks Drive, Suite C2
Syracuse, NY 13206 
Phone: 315-472-6007 or 877-275-2726
Fax: 877-790-1976



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