USPS Announces Proposed Rates for 2017

A few weeks ago, the USPS filed its proposed rate changes with the Postal Regulatory Commission (PRC). Assuming the PRC accepts the proposed changes, new rates would go into effect on January 22, 2017. While the proposed rate adjustment for individual mail pieces varies, overall rate increases for first-class, periodical and standard mail classes would amount to less than 1%. The full proposal can be found at http://www.prc.gov/docs/97/97431/NOTICE-FINAL.pdf; here are some key highlights:

The proposal includes increasing the price of the First-Class Mail Forever® stamp from 47 cents to 49 cents. You may recall that the Forever stamp was previously priced at 49 cents before the PRC forced the USPS to remove the exigent surcharge.

Also proposed is a single price for First-Class Mail commercial presort letters weighing up to 3.5 oz. and a reduction in the one oz. meter price from 46.5 cents to 46 cents. The Metered Letter rate, which was first introduced in 2014 was originally intended to encourage small to medium sized businesses to convert from stamps to meters. The USPS hopes this proposed reduction will encourage these same businesses to keep invoices and statements in the postal stream.

The USPS also plans to rebrand Standard Mail as USPS Marketing Mail to better reflect the type of material present in that mail class. The most significant change for the Marketing Mail class is the elimination of Flats Sequencing System (FSS) pricing. In 2015, much to the chagrin of large publishers and mailers, the USPS instituted separate Standard and Periodicals rates for zip codes serviced by the FSS. While FSS rates were lower than non-FSS rates, they were higher than the Carrier Route rates that many publishers previously used. As a result, the USPS noted that, “Many mailers who previously paid Carrier Route rates for their FSS volume experienced an above average price increase after the new rates were introduced.” This caused a disproportionate decrease in FSS volume over other flat-shaped mail categories, which is doubly harmful to the USPS since FSS equipment runs most efficiently when processing high volumes.  Even with Standard and Periodical rate increases, abolishing the FSS rates means that large publishers and mailers who take advantage of Carrier Route rates may actually see a decline in overall postage paid. The USPS also hopes that this move might encourage more publishers to take advantage of co-mailing opportunities, which have been successful in creating efficiencies for the Postal Service as well as savings for large mailers.

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