Our clients are preparing budgets for 2019 and the question of what’s going to happen with postage rates is always a huge consideration.
The U.S. Postal Service (USPS) has filed its annual price adjustment request with the Postal Regulatory Commission (PRC). The rate increases need to be approved by the PRC before the implementation date, which this year is January 27, 2019.
Rate increase requests cannot exceed the Consumer Price Index (CPI). The USPS has requested increases which overall meet the guidelines however several segments, if approved will realize greater changes such as:
- First Class postage will go from 50 cents to 55 cents – a ten percent increase! This increase is mitigated by a reduction in the rates for additional ounces, but even so, for direct marketers this increase is a double-whammy, as inbound mail is affected as well.
- If the rate requests are approved, nonprofit rates will see a 4.8 to 5.5 percent increase at the Destination Sectional Center Facility (DSCF), according to initial calculations from Steve Kearney of the Association of Nonprofit Mailers. Since high-volume mailers and comminglers strive to qualify their mail down to the DSCF level for maximum savings, this increase has a big impact on the direct response community.
Nonprofits are also concerned about the limitations potentially being placed on marketing mail which would limit the mailing to only paper therefore excluding any upfront premium offering such as labels, ornaments, stickers, calendars, etc. We are monitoring this situation as well. As of late, the USPS seems to be backing off this proposed change.
We understand the importance of postage in our clients’ budgets and what a large portion of a project’s cost it impacts. We will continue to monitor and update you as changes and/or approvals happen. In the meantime, your postal experts at MailSmart Logistics are here, ready to help you attain the absolute best postage rates possible. Put our volume discounts to work for you. Please let us know if we can answer any questions or help in anyway.