Since 2009, the industry has seen some huge changes that impact every organization, so let's take a look at the mailing equipment available to manage these transitions. In some cases, there are savings available or technology that can improve processes. Regardless, it is important to stay on top of these shifts to know what will work best for your organization.
I am writing this article with no vendor affiliation or biases. My firm is the leading authority in this area because we are the only mail audit and recovery firm (that we are aware of) and manage over 50,000 pieces of mailing equipment for some of the largest entities in the US. This gives us a unique perspective that we hope you will find helpful in the description below.
Mailing Systems Postage meters unit placements have had their largest period of decline in the history of the market. Between the years 2008-2013, 20% of all meters were returned, netting a loss of over 300,000 units. The biggest change was at the high end of this space in the commercial segment, where almost half of the units moved to smaller systems. This is being driven by lower mail volumes where the value proposition of the meter comes into question.
We believe there is still a significant overcapacity of mailing systems in the US based on our research of the population we are managing. We find that in multi-location companies, 5-15% of a meter population will have little to no use and should be returned. Mailers can also net a 30-70% savings by rightsizing to the proper equipment levels.
There has been minimal technological innovation around the mailing system with the exception of enhancements in color printing and graphics capabilities. New models appear to be sped up versions of previous systems.
There is a move towards PC Postage in two main areas, and we are seeing growth in the number of placements.
1. Using PC Postage with a Postage Meter to be able to maintain discounts for Priority Mail Commercial rates, which is becoming a requirement in 2015.
2. To replace low end meters at sites with minimal usage levels.
Folding and Inserting Systems
We do not have quantifiable numbers in units because the USPS does not publish these, but we are finding a reduction in the number of systems in use at customers' locations because of the following reasons:
1. Clients are mailing less in their offices.
2. Email marketing is replacing many small batch mailings (newsletters, announcements, invitations, promotions, etc.) that used to require an inserter.
3. Entities are centralizing mailing activity to in-house production facilities or outsourcing to professional mail service providers.
Here are the biggest changes we are seeing from the mailing equipment vendors, which we will break down into Table Top units (smaller flexible systems that can be in an office environment) and Production Systems, which are for professional mailers.
· Tabletop Systems
o Production features moving to tabletop levels.
§ Barcode scanning (vs. OMR) for variable page inserting.
§ Envelope matching for closed faced envelopes.
§ Exit verification systems to validate the content inside the envelope.
o Tabletop models increase in volume capacity where some units can handle up to 200,000 envelopes per month.
o Limited change at low end of the market.
· Production Systems
o Faster speeds up to 25,000 per hour lets mail service providers consolidate multiple older units into single faster work-streams.
o Integrated envelope printing lets you scan a barcode on the document and print the entire face of the envelope in color for a completed matched set.
o In-line Envelope creators make the envelope on the fly and wrap the contents securely.
Addressing Systems We are finding that this area has seen the greatest drop in users. Having been in this space for over 20 years, you used to see many small end mailers using these systems to get automation discounts to get their mailings out the door. Over the last five years, the complexities of the USPS with IMB Barcodes, seamless acceptance combined with fewer trained mail center staff have forced this volume to move to professionals.
There have been some notable changes in the technology that will improve capabilities for those still using these systems.
· Move to laser and full color printing - It used to be that these systems primarily printed the destination address and occasionally a custom message or logo. Now that print quality has improved, we are seeing full color printers that can print the entire envelope or postcard (Destination Address, Return Address, Permit Imprint, Custom Message and Graphics) in one pass.
· Move to cloud-based address corrections - Previously, addressing systems were installed on a pc and required you to get a DVD every couple of months with address updates. New systems are finally becoming cloud based, accessed through the internet and making it more convenient and flexible for operators.
Incoming Tracking Systems These systems track packages as they enter your building and give proof that the item reached its final recipient. We would suspect that there is a change in the mix of the type of entity acquiring new tracking systems. We are seeing fewer overnight letters going business to business as people become more comfortable with email. On the other side, more entities order packages online for delivery. Colleges and universities will see large upticks in volume where a law firm might be seeing decreases.
As for what is available in the marketplace, this is what we are finding:
· More providers - There are smaller players getting into this space, trying to undercut the established companies.
· Cloud-based systems are taking over - Instead of needing to install at the PC or server, systems are becoming more flexible in how they are deployed and data is accessed.
· More hardware options help reduce costs - One of the biggest costs in these systems is the portable handheld scanners, and we are seeing cost reductions based on more options being available. Many systems can work with multiple hardware providers.
· Core functionality remains relatively unchanged but entities are finding different tracking uses for systems.
Multi Carrier Shipping Systems I left this for last because this appears to be the biggest growth spot for the industry. As the private package carriers move to dimensional rating of every item and the USPS mandates using the Intelligent Mail Package Barcode to maintain discounts, entities are looking for ways to reduce costs. The most successful strategy is to shop between carriers on a package by package basis through third party systems. Here is what we are finding as the biggest changes in this space:
· More providers at all levels of the marketplace - There is a lot of focus at all levels of this space from the desktop shipper to the production floor. Also, systems can start at a fraction of what they once costs for basic configurations or move to more feature rich systems that work across the enterprise.
· Cloud based solutions are taking over - This is the biggest growth driver in this space because it lets different vendors compete more rigorously, adding more value to the customer.
· EDI rates vs. downloaded tables - You used to need to get a DVD with rates each year and try to match discount levels to what you were actually getting billed. Now you only need to hit the carriers' servers to calculate the correct price.
· Same question over free - There is still the question of if it makes sense to pay for a system over what the carriers offer at no charge. The carrier-provided systems have improved and can do many items you used to need a third party system to accomplish.
Future Outlook I don't see any major changes in this space happening quickly. It will be slow declines of mail volume that will make all of these forces described above evolve over time. I expect that we will see 3-7% reductions in mail volumes and postage meter placements, with the other types of ancillary equipment reducing at similar rates. We will see reductions in expertise around mail, forcing volumes to production facilities inside or outside of our entities.
Package volumes will continue to grow as will the choices that you will have to optimize your operation. This will mean lower system pricing in the end. We will see more services move to the cloud, which will give us the best opportunities for integration and visibility.
Change is inevitable in any industry and it is always uncomfortable. If we look at the big picture, we now are able to communicate faster, at lower costs and with more options.
Adam Lewenberg, CMDSS, MDC is President of Postal Advocate Inc. and runs the largest Mail Audit and Recover firm in the United States. Their mission is to help entities with large numbers of locations reduce mail related expenses, recover lost postage funds, and simplify visibility and oversight. Over the last year, they have helped their clients save an average of 63% and over $4 million on equipment, fees and lost postage. He can be reached at 617.372.6853 or adam.lewenberg@postaladvocate.com.
I am writing this article with no vendor affiliation or biases. My firm is the leading authority in this area because we are the only mail audit and recovery firm (that we are aware of) and manage over 50,000 pieces of mailing equipment for some of the largest entities in the US. This gives us a unique perspective that we hope you will find helpful in the description below.
Mailing Systems Postage meters unit placements have had their largest period of decline in the history of the market. Between the years 2008-2013, 20% of all meters were returned, netting a loss of over 300,000 units. The biggest change was at the high end of this space in the commercial segment, where almost half of the units moved to smaller systems. This is being driven by lower mail volumes where the value proposition of the meter comes into question.
We believe there is still a significant overcapacity of mailing systems in the US based on our research of the population we are managing. We find that in multi-location companies, 5-15% of a meter population will have little to no use and should be returned. Mailers can also net a 30-70% savings by rightsizing to the proper equipment levels.
There has been minimal technological innovation around the mailing system with the exception of enhancements in color printing and graphics capabilities. New models appear to be sped up versions of previous systems.
There is a move towards PC Postage in two main areas, and we are seeing growth in the number of placements.
1. Using PC Postage with a Postage Meter to be able to maintain discounts for Priority Mail Commercial rates, which is becoming a requirement in 2015.
2. To replace low end meters at sites with minimal usage levels.
Folding and Inserting Systems
We do not have quantifiable numbers in units because the USPS does not publish these, but we are finding a reduction in the number of systems in use at customers' locations because of the following reasons:
1. Clients are mailing less in their offices.
2. Email marketing is replacing many small batch mailings (newsletters, announcements, invitations, promotions, etc.) that used to require an inserter.
3. Entities are centralizing mailing activity to in-house production facilities or outsourcing to professional mail service providers.
Here are the biggest changes we are seeing from the mailing equipment vendors, which we will break down into Table Top units (smaller flexible systems that can be in an office environment) and Production Systems, which are for professional mailers.
· Tabletop Systems
o Production features moving to tabletop levels.
§ Barcode scanning (vs. OMR) for variable page inserting.
§ Envelope matching for closed faced envelopes.
§ Exit verification systems to validate the content inside the envelope.
o Tabletop models increase in volume capacity where some units can handle up to 200,000 envelopes per month.
o Limited change at low end of the market.
· Production Systems
o Faster speeds up to 25,000 per hour lets mail service providers consolidate multiple older units into single faster work-streams.
o Integrated envelope printing lets you scan a barcode on the document and print the entire face of the envelope in color for a completed matched set.
o In-line Envelope creators make the envelope on the fly and wrap the contents securely.
Addressing Systems We are finding that this area has seen the greatest drop in users. Having been in this space for over 20 years, you used to see many small end mailers using these systems to get automation discounts to get their mailings out the door. Over the last five years, the complexities of the USPS with IMB Barcodes, seamless acceptance combined with fewer trained mail center staff have forced this volume to move to professionals.
There have been some notable changes in the technology that will improve capabilities for those still using these systems.
· Move to laser and full color printing - It used to be that these systems primarily printed the destination address and occasionally a custom message or logo. Now that print quality has improved, we are seeing full color printers that can print the entire envelope or postcard (Destination Address, Return Address, Permit Imprint, Custom Message and Graphics) in one pass.
· Move to cloud-based address corrections - Previously, addressing systems were installed on a pc and required you to get a DVD every couple of months with address updates. New systems are finally becoming cloud based, accessed through the internet and making it more convenient and flexible for operators.
Incoming Tracking Systems These systems track packages as they enter your building and give proof that the item reached its final recipient. We would suspect that there is a change in the mix of the type of entity acquiring new tracking systems. We are seeing fewer overnight letters going business to business as people become more comfortable with email. On the other side, more entities order packages online for delivery. Colleges and universities will see large upticks in volume where a law firm might be seeing decreases.
As for what is available in the marketplace, this is what we are finding:
· More providers - There are smaller players getting into this space, trying to undercut the established companies.
· Cloud-based systems are taking over - Instead of needing to install at the PC or server, systems are becoming more flexible in how they are deployed and data is accessed.
· More hardware options help reduce costs - One of the biggest costs in these systems is the portable handheld scanners, and we are seeing cost reductions based on more options being available. Many systems can work with multiple hardware providers.
· Core functionality remains relatively unchanged but entities are finding different tracking uses for systems.
Multi Carrier Shipping Systems I left this for last because this appears to be the biggest growth spot for the industry. As the private package carriers move to dimensional rating of every item and the USPS mandates using the Intelligent Mail Package Barcode to maintain discounts, entities are looking for ways to reduce costs. The most successful strategy is to shop between carriers on a package by package basis through third party systems. Here is what we are finding as the biggest changes in this space:
· More providers at all levels of the marketplace - There is a lot of focus at all levels of this space from the desktop shipper to the production floor. Also, systems can start at a fraction of what they once costs for basic configurations or move to more feature rich systems that work across the enterprise.
· Cloud based solutions are taking over - This is the biggest growth driver in this space because it lets different vendors compete more rigorously, adding more value to the customer.
· EDI rates vs. downloaded tables - You used to need to get a DVD with rates each year and try to match discount levels to what you were actually getting billed. Now you only need to hit the carriers' servers to calculate the correct price.
· Same question over free - There is still the question of if it makes sense to pay for a system over what the carriers offer at no charge. The carrier-provided systems have improved and can do many items you used to need a third party system to accomplish.
Future Outlook I don't see any major changes in this space happening quickly. It will be slow declines of mail volume that will make all of these forces described above evolve over time. I expect that we will see 3-7% reductions in mail volumes and postage meter placements, with the other types of ancillary equipment reducing at similar rates. We will see reductions in expertise around mail, forcing volumes to production facilities inside or outside of our entities.
Package volumes will continue to grow as will the choices that you will have to optimize your operation. This will mean lower system pricing in the end. We will see more services move to the cloud, which will give us the best opportunities for integration and visibility.
Change is inevitable in any industry and it is always uncomfortable. If we look at the big picture, we now are able to communicate faster, at lower costs and with more options.
Adam Lewenberg, CMDSS, MDC is President of Postal Advocate Inc. and runs the largest Mail Audit and Recover firm in the United States. Their mission is to help entities with large numbers of locations reduce mail related expenses, recover lost postage funds, and simplify visibility and oversight. Over the last year, they have helped their clients save an average of 63% and over $4 million on equipment, fees and lost postage. He can be reached at 617.372.6853 or adam.lewenberg@postaladvocate.com.
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