The USPS is facing financial pressures that can be quite costly for mailers. On January 26, 2014, the USPS will implement the largest price increase in more than a decade. Exigency and the CPI rate case will represent a sizeable six percent average increase in postage. This increase could have been much greater if the USPS had not delayed its decision to require Full Service Intelligent Mail, as some mailers would have lost automation rates. Fortunately, software can be used to leverage both traditional and new forms of workshare discounts to help mailers stay profitable.

Historically, mailers have substantially reduced postage costs by sharing the work in mail preparation and delivery. The traditional workshare discount takes three forms:
--Presort - The mailer can sort the mail in an order that is easier for the USPS to process. The savings are given to mailers in the form of reduced rates based on the refinement of the sort (i.e. Carrier Route, 5-Digit, 3-Digit, ADC, AADC, MADC, and MAADC).
--Drop Ship - The mailer can induct their mail closer to the final destination, and by doing so receive a destination entry discount (i.e. DDU, DSCF, and DNDC). On January 26, 2014, the DFSS discount (comparable to the DSCF discount) for dropping mail at an FSS location becomes available.
--Address Quality - The mailer can indirectly increase the overall return on investment of their mail by ensuring the mailpiece address is complete, correct, and current by passing it through CASS and NCOALink processing prior to mailing.

A new form of workshare discount is developing around the USPS strategy to improve operational efficiencies by increasing the visibility of mail throughout the supply chain. This fourth workshare discount is earned when the mailer uses Full-Service Intelligent Mail to help the USPS tie physical mail to the digital world.
Most CASS and PAVE certified software can provide the basic level of features to achieve the Full-Service discount of $1 per thousand for Standard Mail and $3 per thousand for First-Class Mail. Your software should allow you to easily print barcodes that remain unique for 45 days on all pieces, trays, and pallets, and submit postage documentation electronically to the USPS using Mail.dat or Mail.xml. Compared to the traditional workshare discounts, the Full-Service discount appears at first glance to be insignificant. However, Full-Service Intelligent Mail opens the door to other savings that can be achieved by helping the USPS increase mail visibility.

Mailers receive free Full-Service ACS. This savings could range from 11 to 55 cents per notification, for mailers switching from Manual address correction, electronic ACS, or One Code ACS. Your software should be able to help by assigning the correct service type codes for each piece, providing a mechanism to bring the address changes back into your list, and filtering out the undeliverable records.

When 90% of mail is Full-Service compliant, the mailer gets two more opportunities to save. First, you can waive the permit fee, a $200 savings per permit. Second, you can opt-in to the "Mail Anywhere" program that allows the use of a single nationwide permit, simplifying permit management. Software should help the mailer ensure that the mailing remains 90% compliant.

Receiving free data is not a savings until you have software that can use that data to help decipher the mail flow. For example, reports can be created around the data, helping mailers to more effectively respond to customer inquiries on the status of where the mailpiece or package is located in the mail stream. This information can be used in improving mailing and call center operations, timeliness of communications, predicting cash flow, mail delivery, and bill collection. Software that can quickly provide the reports your company needs is essential for gaining the true value from this free data.

Participation in future incentive programs seems to be the most promising opportunity for mailers to benefit from this new workshare. Even though the promotions are just a few months in duration, they contain significant savings for those First-Class and Standard Mail mailers who can meet the requirements. Incentive programs for 2014 include:
--Two percent per piece discount for the Direct Mail Mobile Coupon & Click-to-Call, Emerging Technologies, and Mobile Buy-It-Now promotions
--Two- to three cents per scanned piece for the Earned Value Reply Mail promotion
--One- to two cents per piece savings for the Picture Permit Imprint Indicia
--Five percent per piece discount for Product Samples promotion

During this challenging period when the USPS and Congress are looking to make mail more efficient, less costly, and more attractive than other forms of message and package delivery, there is tremendous pressure on the mailer to stay profitable. Choosing the right software and software provider can make adoption of Full-Service Intelligent Mail and other Postal initiatives relatively painless. Software should help mailers take full advantage of all savings now and in the future, as we continue to help the Postal Service via workshare.

Bill Jamieson is Director, Product Strategy, Bell and Howell.