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October 2020 USPS® Rate Change

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Postal Advocate shared all the information you need to know for this coming rates increase:
- What rates are changing
- How this impacts you
- What you need to do
- Savings tips

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October 2020 USPS® Rate Change

  1. 1. October 2020 USPS® Rate Change - What You Need To Know
  2. 2. Background and Experience Speaker: Adam Lewenberg • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of 160,000 pieces of mailing equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Former Industry Co Chair- Boston Postal Customer Council and Mail Systems Management Association. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 17 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nations top accounts. September 2, 2020 2
  3. 3. What We’ll Cover: • What rates are changing • How this impacts you • What you need to do • Savings tips • USPS Thoughts September 2, 2020 3 New rates take into effect Sunday October 18, 2020 and go through December 27, 2020 (Temporary Rate Increase) We will focus on the most common rate structures. For more detail on other mail classes and services go to USPS Postal Explorer at http://pe.usps.gov/PriceChange/Index
  4. 4. Market Dominant Rates are not changing! September 2, 2020 4 Weight Ounces Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase 1 $0.55 $0.55 0.0% $1.00 $1.00 0.0% 2 $0.70 $0.70 0.0% $1.20 $1.20 0.0% 3 $0.85 $0.85 0.0% $1.40 $1.40 0.0% 6 N/A N/A $2.00 $2.00 0.0% 13 N/A N/A $3.40 $3.40 0.0% Post Card $0.35 $0.35 0.0% Letters Flats First-Class Mail® Retail Weight Ounces Prior to 10/18/20 New Rates 10/18/20 % Increase 1 $0.500 $0.500 0.0% 2 $0.650 $0.650 0.0% 3 $0.800 $0.800 0.0% Letters Metered Letters Weight Ounces Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase Automation 5 Digit 1 $0.389 $0.389 0.0% $0.430 $0.430 0.0% $0.260 $0.260 0.0% Automation 3 Digit $0.577 $0.577 0.0% Automation AADC 1 $0.419 $0.419 0.0% $0.620 $0.620 0.0% $0.270 $0.270 0.0% Automation Mixed AADC 1 $0.439 $0.439 0.0% $0.716 $0.716 0.0% $0.276 $0.276 0.0% Presorted (Non Automation) 1 $0.460 $0.460 0.0% $0.810 $0.810 0.0% $0.285 $0.285 0.0% Commercial First-Class Mail® Letters Flats* Post Cards Weight Ounces Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase Automation 5 Digit ≤3.5 $0.259 $0.259 0.0% $0.418 $0.418 0.0% Automation 3 Digit ≤4 $0.543 $0.543 0.0% Automation AADC/ADC ≤3.5 $0.284 $0.284 0.0% $0.608 $0.608 0.0% Automation Mixed AADC/ADC-Origin ≤3.5 $0.299 $0.299 0.0% $0.666 $0.666 0.0% Marketing Mail® Letters Flats • First-Class Mail • Marketing Mail • International Mail • Special Services
  5. 5. Priority Mail Rate Categories • Retail – At USPS Counter or through a postage meter. • Commercial Base – Through a PC Postage Solution (USPS.com will no longer qualify for these rates and will default to retail) • Commercial Plus – Through a contracted agreement with the USPS. – Priority Mail® - 50,000 packages per year across facilities – Rates are the same as Base September 2, 2020 5
  6. 6. Priority Mail® September 2, 2020 6 Most popular USPS® package service 13 ounce to 70LB items 1-3 day delivery throughout the US 9 primary zones based on distance. Highlights • $.40 increase per Commercial Base parcel Weight LB's Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase 1 $7.50-14.05 $7.50-14.05 0.0% $7.02-11.40 $7.42-11.80 4-6% (5% Avg) 5 $10.20-40.00 $10.20-40.00 0.0% $8.44-33.57 $8.04-33.17 1-5% (3% Avg) 10 $13.60-68.90 $13.60-68.90 0.0% $9.76-57.94 $10.16-58.34 1-4% (2% Avg) 25 $25-131.05 $25-131.05 0.0% $19.30-104.82 $19.70-105.22 1-2% (1% Avg) 50 $36.05-207.60 $36.05-207.60 0.0% $29.16-165.97 $29.56-166.37 .5-1% (1% Avg) Flat Rate Envelope $7.75 $7.75 0.0% $7.15 $7.55 5.6% Legal Flat Rate Envelope $8.05 $8.05 0.0% $7.45 $7.85 5.4% Padded Flat Rate Envelope $8.40 $8.40 0.0% $7.75 $8.15 5.2% Small Flat Rate Box $8.30 $8.30 0.0% $7.65 $8.05 5.2% Medium Flat Rate Boxes $15.05 $15.05 0.0% $13.20 $13.60 3.0% Large Flat Rate Boxes $21.10 $21.10 0.0% $18.30 $18.70 2.2% Retail Commercial Base USPS Priority Mail® Average % Increase Retail Commercial Base Flat Rate 0% 4% 1-5LB 0% 4% 5-10LB 0% 3% 10-25LB 0% 1% Over 25LB 0% 1%
  7. 7. Priority Mail® Express September 2, 2020 7 Up to 70LB items 1 day Guaranteed Delivery 9 primary zones based on distance. Highlights • $1.50 increase per Commercial Base parcel Weight LB's Prior to 10/18/20 New Rates 10/18/20 % Increase Prior to 10/18/20 New Rates 10/18/20 % Increase 1 $25.60-56.10 $25.60-56.10 0.0% $22.74-49 $24.50-53 3-7% (5% Avg) 5 $27.05-91 $27.05-91 0.0% $23.91-77.47 $25.50-83.15 2-6% (3% Avg) 10 $40.75-134.20 $40.75-134.20 0.0% $35.99-114.20 $37.80-122.40 1-4% (2% Avg) 25 $73.85-227.60 $73.85-227.60 0.0% $64.69-195.84 $66.75-211.20 1-2% (1% Avg) 50 $130.85-420.90$130.85-420.90 0.0% $114.61-362.20 $117.15-385.25 .5-1% (1% Avg) Flat Rate Envelope $25.50 $25.50 0.0% $22.68 $24.25 6.9% Legal Flat Rate Envelope $25.70 $25.70 0.0% $22.80 $24.25 6.4% Padded Flat Rate Envelope $26.20 $26.20 0.0% $23.18 $24.75 6.8% USPS Priority Mail® Express Retail Commercial Base Average % Increase Retail Commercial Base Flat Rate 0% 7% 1-5LB 0% 4% 5-10LB 0% 3% 10-25LB 0% 2% Over 25LB 0% 1%
  8. 8. Savings Tips - Move to Commercial Rates • Huge discounts over retail rates. • Free tracking on usps.com. • Need to process through a PC Postage solution to get the discounts. (Click-N-Ship from the USPS does not allow for Commercial Rates – Only Retail) • Multiple vendor options to process packages • Requires the operator to enter the address and submit to the USPS electronically and create a shipping label vs. meter tape. September 2, 2020 8 Average % Increase Commercial Savings over Retail Flat Rate 5% 1-5LB 17% 6-10LB 22% 11-25LB 23% Over 25LB 20% Average % Increase Commercial Savings over Retail Flat Rate 14% 1-5LB 14% 6-10LB 20% 11-25LB 22% Over 25LB 19% USPS Priority Mail® USPS Priority Mail® Express
  9. 9. First-Class Mail® Package Service September 2, 2020 9 Best Savings Opportunity Less than 1 LB parcels where USPS holds a Monopoly (Private carriers start at 1LB) 1-3 day delivery Highlights • $.25 increase per First-Class Mail – Package Services Commercial parcel • Save by converting from Retail to Commercial with improved tracking! Weight Ounces First-Class Mail® - Parcels Retail First-Class Mail® - Package Services Commercial Savings Up to 4 $3.80-4.20 $2.99-3.43 18-21% 5 $4.60-5.00 $3.46-3.92 22-25% 6 $4.60-5.00 $3.46-3.92 22-25% 7 $4.60-5.00 $3.46-3.92 22-25% 8 $4.60-5.00 $3.46-3.92 22-25% 9 $5.30-5.75 $4.18-4.71 18-21% 10 $5.30-5.75 $4.18-4.71 18-21% 11 $5.30-5.75 $4.18-4.71 18-21% 12 $5.30-5.75 $4.18-4.71 18-21% 13 $5.90-6.50 $5.29-5.95 8-10% 14 $7.50-9.60 $5.29-5.95 29-38% 15 $7.35-9.30 $5.29-5.95 29-38% 15.999 $7.35-9.30 $5.29-5.95 29-38% Convert from Retail to Commercial • Retail rates go up to 13 ounces forcing heavier items to Priority Mail. Commercial service goes up to 15.999 ounces.
  10. 10. Commercial Savings Examples September 2, 2020 10 PC Postage starts at around $15 per month! Class Commercial Savings Estimated Current Spend Estimated New Spend Difference First Class Parcels 23% $250.00 $192.50 -$57.50 Priority Mail (Less than 10LB) 13% $500.00 $435.00 -$65.00 Priority Mail Express (Less than 10LB) 11% $250.00 $222.50 -$27.50 Total $1,000.00 $850.00 -$150.00 Medium Class Commercial Savings Estimated Current Spend Estimated New Spend Difference First Class Parcels 23% $2,500.00 $1,925.00 -$575.00 Priority Mail (Less than 10LB) 13% $5,000.00 $4,350.00 -$650.00 Priority Mail Express (Less than 10LB) 11% $2,500.00 $2,225.00 -$275.00 Total $10,000.00 $8,500.00 -$1,500.00 High Class Commercial Savings Estimated Current Spend Estimated New Spend Difference First Class Parcels 23% $25,000.00 $19,250.00 -$5,750.00 Priority Mail (Less than 10LB) 13% $50,000.00 $43,500.00 -$6,500.00 Priority Mail Express (Less than 10LB) 11% $25,000.00 $22,250.00 -$2,750.00 Total $100,000.00 $85,000.00 -$15,000.00
  11. 11. Additional Rate Change Items September 2, 2020 11 USPS Increases Product Planned Increase Parcel Select Ground $0.40 Parcel Select DSCF $0.40 Parcel Select DNDC $0.40 Parcel Select Destination $0.24 Delivery Unit (DDU) $0.24 Parcel Return Service $0.24 Parcel Select Lightweight $0.24
  12. 12. Thoughts on the USPS News • The USPS needs help due to drastic decreases in mail volumes. This will continue as we all mail less in the future. • Continual pressure about pre-funding pensions and health benefits. • Limited control to increase rates: – Consumer Price Index – Exigent Increases • Need the flexibility to increase rates or decrease service levels. • Decent oversight with Inspector General, Board of Governors, Rate commissions, Oversight industry groups, dedicated postal employees, Congress, media, general public. • USPS uses these levers to gain publicity to their plight and to fight for assistance or flexibility. • We have the lowest postal rates in the world with the largest postal service. • Our Postal Service is one of the most trusted federal institutions. • The media news will minimize over time and the USPS will maintain service levels. September 2, 2020 12
  13. 13. USPS – Raising rates due to lower mail volumes September 2, 2020 13 Service Category Current Compare to Previous Year Change Percent Change Current Compare to Previous Year Change Percent Change 4/1/20-6/30/20 Total First-Class Mail 5,516,615 6,104,544 -587,929 -9.60% 12,041,514 13,263,435 -1,221,921 -9.2 Total USPS Marketing Mail 2,437,751 3,874,281 -1,436,530 -37.10% 11,247,373 17,681,521 -6,434,148 -36.4 Total Periodicals Mail 244,710 301,791 -57,081 -18.90% 980,473 1,182,523 -202,050 -17.1 Total Package Services Mail 214,479 184,835 29,644 16% 140,962 135,784 5,178 3.8 Total 8,413,555 10,465,451 -2,051,896 -20% 24,410,322 32,263,263 -7,852,941 -24% 1/1/20-3/31/20 Total First-Class Mail 6,420,138 6,537,750 -117,612 -1.8 14,255,575 14,406,800 -151,225 -1 Total USPS Marketing Mail 3,751,525 3,844,747 -93,221 -2.4 17,049,120 17,652,326 -603,207 -3.4 Total Periodicals Mail 265,485 298,024 -32,539 -10.9 1,020,818 1,163,044 -142,226 -12.2 Total Package Services Mail 200,466 211,109 -10,643 -5 141,807 158,572 -16,766 -10.6 Total 10,637,614 10,891,630 -254,015 -2% 32,467,320 33,380,742 -913,424 -3% 10/1/19-12/31/19 Total First-Class Mail 6,771,913 6,933,099 -161,187 -2.3 14,515,399 15,101,517 -586,119 -3.9 Total USPS Marketing Mail 4,425,562 4,677,793 -252,231 -5.4 20,313,444 22,054,872 -1,741,428 -7.9 Total Periodicals Mail 286,754 310,657 -23,903 -7.7 1,109,478 1,198,058 -88,580 -7.4 Total Package Services Mail 206,134 219,059 -12,925 -6% 153,958 173,878 -19,920 -11% Total 11,690,363 12,140,608 -450,246 -4% 36,092,279 38,528,325 -2,436,047 -6% 7/1/19-9/30/19 Total First-Class Mail 5,883,314 6,030,992 -147,678 -2.4 12,855,264 13,323,131 -467,868 -3.5 Total USPS Marketing Mail 4,010,288 4,104,979 -94,691 -2.3 18,301,327 19,084,033 -782,705 -4.1 Total Periodicals Mail 283,604 296,202 -12,598 -4.3 1,090,993 1,139,106 -48,113 -4.2 Total Package Services Mail 206,009 206,238 -229 0% 153,333 159,106 -5,773 -4% Total 10,383,215 10,638,411 -255,196 -2% 32,400,917 33,705,376 -1,304,459 -4% 12 Month Totals 41,124,747 44,136,100 -3,011,353 -7% 125,370,838 137,877,706 -12,506,871 -9% Revenue Pieces https://about.usps.com/what/financials/
  14. 14. Ballot Mail is a Small % of USPS Totals September 2, 2020 14 First Class-Mail® Current Estimate Pieces per day Daily Change from Previous Quarter Reason for Spike 4/1/20-6/30/20 12,041,514,000 154,378,385 -28,385,397 1/1/20-3/31/20 14,255,575,000 182,763,782 -3,331,077 Tax and Financial Reporting 10/1/19-12/31/19 14,515,399,000 186,094,859 21,283,782 Holiday Mailings - December 7/1/19-9/30/19 12,855,264,000 164,811,077 Total Ballots (Estimate from 2016 Election) 130,000,000 Vote by Mail (Estimate) 50% Total Vote by Mail 65,000,000 People who vote 2 Weeks or more ahead (Absentee) 20% Remaining ballots mailed in the last 2 weeks 52,000,000 10 mailing days to make sure items are delivered - ballots per day 5,200,000 Average First-Class Mail® delivered per day in Oct-Dec 2019 186,093,833 Election Mail as a percentage of total 2.8% Election Ballot Estimates
  15. 15. What you need to do: If you have a mail machine, make sure you download the new rates before October 18, 2020 when the rates take into effect Here are links to the different meter vendors: • FP: http://www.fp-usa.com/ratechange/ • Neopost/Hasler: http://www.neopostusa.com/resources/rate-change- information • Pitney Bowes: http://www.pitneybowes.com/us/postal-information/rate- change-info.html • Stamps.com: https://stamps.custhelp.com/app/answers/detail/a_id/1685/ ~/january-2017-usps-rate-changes Go to the USPS Postal Explorer website for more information: http://pe.usps.gov/PriceChange/Index September 2, 2020 15 Download the Postal Advocate Rate Comparison Guide – www.postaladvocate.com
  16. 16. Helping multi-location organizations streamline their mailing costs Over 160,000 pieces of equipment, managed by Postal Advocate Recovered over $18,000,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $66,000,000 IN CLIENT SAVINGS $1.9M 57% Average Client Savings Average Equipment Savings HOW WE DO IT • 175+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit www.postaladvocate.com or call (888)977-MAIL(6245)
  17. 17. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit www.postaladvocate.com or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT
  18. 18. Upcoming Webinars The Future of Mailing – Virtual On Demand Mailing September 23, 2020 – 11:00AM EST Register through www.postaladvocate.com September 2, 2020 19
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