Shape-Based Pricing has radically altered the way postage rates are being calculated, but there are ways that you can take advantage of the new policies and keep a lid on many of your postal expenses. Ever rising processing costs has the USPS encouraging customers to prepare their mail in ways that allow for more efficient processing through automation, and that's the impetus behind Shape-Based Pricing. Yet, what you may not know is that under SBP, although higher postage costs will be inevitable for most applications, the rate and structure change presents opportunities for others to save money. In all cases, non-action could dramatically increase your expenses.
As you know, the USPS has traditionally used a weight-based method to determine postage costs for letters, flats or parcels. Under Shape-Based Pricing, the criteria for postage determination has changed dramatically. Instead of using an item's weight as the primary factor to establish shipping costs, a combination of size, thickness and weight are now the standard. Essentially, mail items that are easier for the USPS to process are rated lower than items that are not. Because of their shape differences, all letters, flats and parcels are priced differently because each is handled and processed differently. The new Shape-Based Pricing structure significantly increases postage costs for various types of mailing applications.
The Impact On Your Mail
The effects of Shape-Based Pricing impacts all mailers, with the determining factors being the type and volume of mail pieces sent. Small volume mailers need to manually measure the size and thickness of their letters and flats to ensure proper postage. Mid- to high-volume mailers need to utilize some form of automation to help apply proper postage and keep the mail stream efficiently flowing. The bottom line is that all mailers now need to be conscious of the size, thickness and weight of their mail pieces if they expect to save money and maintain productivity under the new structure.
Using SBP to your advantage
Shape-Based Pricing may be creating frustration and increased costs in your mailroom. However, the
following "hot list" of Shape-Based strategies will surely help you be more productive while minimizing the effects of SBP on your mailroom's bottom line.
Audit your postage usage. Take a look at the volume of mail that leaves your mailroom weekly, monthly and annually. Evaluate how much these items weigh; their postage rates, and what type of packaging is used.
Calculate the impact of Shape-Based Pricing. Estimate the impact of the proposed postage increase by applying the new rates, and evaluating the potential increased mail preparation workload (i.e. the manual sorting mail by size, thickness or weight).
Pay attention to shape. The shape of mail is now a critical factor, so consider developing direct mail pieces that are more cost effective. The new SBP regulations regarding size, thickness and weight will motivate you into using more cost-effective shapes and sizes.
Look for ways to increase mailroom productivity. Manually sorting mail prior to metering and guessing about the correct amount of postage are both inefficient and costly. The
newest digital mailing systems have dynamic weighing platforms which can automatically measure the length, width, thickness and weight of a mail piece to accurately determine the correct postage.
Fold to save. Simply folding documents and mailing them as letters instead of flats can save you a lot of postage. Take advantage of reduced labor costs by utilizing an automated folder/inserter that not only speeds the process of folding and inserting paper into letter size envelopes, but also creates crisper folds to help keep letters under the ¼" letter thickness requirement.
Address for success. Utilizing USPS approved address validation tools, you will save money by eliminating incorrect and undeliverable addresses. Some tools have the additional benefit
of qualifying your mail for discounted postal rates through presort automation discounts.
Combine and save. With mail thickness as important as weight, group documents together and fold and insert them into one envelope if your customers receive multiple mail pieces from your company. Also, changing from single sided to double-sided (duplex) documents lets you put more
information into one envelope.
Shop around. With an automated, multi-carrier shipping solution, you can "rate shop" for carriers, eliminate unnecessary overnight charges and avoid bad address charges, which really add to your shipping costs.
Track and control postage. Most of today's mailing systems have integrated accounting tools which will help you track the number of mail pieces sent and postage spent per department. By taking advantage of even the simplest form of postage accounting, you can help better track and control your mailing costs.
Maximize each ounce. If you have room to spare in an envelope with its weight and thickness, why not add a tag-a-long marketing piece. With the new USPS rates in effect, it will actually cost less to mail a 2 oz. letter than it does today.
For more information on Shape-Based Pricing, how it may impact you, and how to take advantage of it, please visit www.shapebasedpricing.com. To read the USPS's SBP announcement, visit www.usps.com/ratecase.◊