Editor's Note: This is a multi-part series. You can read parts two and three here and here.
Numerous surveys and studies across the country overwhelmingly prove direct mail’s success as a marketing tool capable of driving positive results. As postage prices have climbed in past years and budgets have been trimmed, mailers are challenged to find cost-cutting options without sacrificing the number of mail pieces sent. Although there are valid reasons to continue traditional mail methods of preparing and presenting mail, some thought should be given to alternatives that are capable of cutting additional cost out of the process. Standard Mail rates are well known as one of the lower postage methods, but there are still opportunities for direct mailers to reduce costs even further through the Three Cs of Standard Mail: Commingling, Co-Palletization, and Co-Transportation.
The USPS recognizes the benefits of partnership by offering workshare discounts to those who will prepare and present the mail based upon the requirements outlined in the DMM (Domestic Mail Manual). The Three Cs of Standard Mail include two workshare discount programs tailored to maximize USPS operational efficiencies and offer additional postage savings.
Commingling
As a consumer co-op uses the purchasing power of the group to maximize pricing, Commingling uses the power of the group to maximize postage savings. Mail Service Providers who commingle mail take multiple mailstreams and combine them together to create a single mailstream. This can be done physically with multi-line optical character reader (MLOCR) equipment, more commonly referred to as a “sorter.” Files can also be sorted digitally with software that allows the file to be printed or inserted into zip order. When the data is combined, the ZIP Codes are sorted into the predetermined USPS postage rate categories. For example, a tray containing mail pieces entirely with matching five-digit ZIP Codes is a finer level sort than a three-digit and ultimately qualifies for a deeper discount. The USPS has mail preparation requirements with a minimum number of zips to a ZIP Code required to gain certain discount levels. As a result, the larger the quantity of mail combined, the greater the opportunity for achieving postage discounts because minimum quantity requirements are met. The Commingling strategy does not work for letters and flats alone. Periodical mailers can also benefit from Co-Mailing, which combines different periodicals into the same bundles to allow additional savings.
Co-Palletization
As Commingling combines letters and flats into the same tray or tub, Co-palletization is another USPS discount opportunity that allows mail trays or tubs to be combined on the same pallet. Trays from multiple clients are separated by ZIP Code and combined on pallets destined to the same Network Distribution Center (NDC) or Sectional Facility Center (SCF) entry points. Because this enables fuller pallets of mail to presented to the USPS at these destination entry points, additional discounts are applied.
Co-Transportation
Unlike the other two Cs, Co-Transportation is not a formal USPS program. Instead, it is a tactic that helps mailers reduce overall transportation costs through partnership with a Services Provider. Similar to a Logistics Consolidator who fills their trucks with pallets of different clients’ mail bound for the same destination, Co-Transportation is created when trucks are shared. The truck already has an associated cost as it travels to its destination. Often, a mailing fills a portion of the truck, but the cost to move the truck remains the same whether it is completely full or only partially. By working together with a provider to enable a fuller truck, the overall transportation costs are reduced for the mailer.
Our goal in upcoming articles is to dive deeper into each of these areas in order to explore the best ways to take full advantage of postage savings and remove additional cost out of the Standard Mail process. The USPS offers workshare discounts to drive efficiencies into their operation. And whether a company implements these programs on their own or with a partner, the opportunity to manage postage costs and drive transportation efficiencies allows clients to see improved postage discounts and overall operational efficiencies.
Alison Hall is Product Manager, Direct Mail Solutions, Pitney Bowes Presort Services. She has over 25 years of experience in the mailing industry, helping clients drive revenue and develop innovative direct mail solutions. She can be reached at alison.hall@pb.com and @p_AlisonHall. For more information, visit www.pitneybowes.com/us/directmail.
