Be in the Know: The USPS Rate Increase & How to Solve for It

While there is a lot of ambiguity regarding the USPS rate increase expected to go into effect on August 29th, we welcome the opportunity to share our insights and solutions. Specifically, we will answer commonly asked questions in today’s post, tapping into our 30+ years of relevant experience.

Why Is the USPS Increasing Rates?

The USPS receives no direct tax-payer funding; it is funded purely by postage revenue. With declines in First-Class Mail letters over the past several decades, consistent increases in volume of small parcel deliveries and increased demands for eCommerce during COVID-19, the USPS has had to focus on its fee structure. The USPS is anticipating $160B in additional net loses over the next decade without these changes.

What Are the Increases?

There were several rate increases announced for personal mail, i.e., First-Class Mail parcels and B2B materials, which amount to approximately 6.82%. When focusing on B2B USPS rates, here are the proposed rate increases*:
  • First Class: 6.82%
    • Postcards: +13.75%
  • Catalogs (Marketing Mail Flats): 8.82%
  • Letters: 6.58%
  • Periodicals: 8.81%
  • Parcels: 9.37%
  • Carrier Route: 8.89%
*These are the proposed rate changes and could technically change, but changes are not anticipated.

What Does The USPS Rate Increase Mean for Your Business?

Your mailing costs will be going up. The question is: by how much? The actual rate increases you will be paying can vary significantly based on what, how much or often, and to whom or where you mail. Our team of industry experts can help determine the exact increase your business will be facing with a Postal Rate Audit. We can also help you identify and implement cost-savings opportunities such as:
  • Lowering your catalogs’ cost per square inch.
  • Determining how the percentage increase actually decreases based on catalog / per piece weight.
  • Leveraging the USPS incentive for marketing mail; a 2% savings.
  • Evaluating and testing alternate print marketing vehicles. For example, insert media will not be affected by this rate change. Learn more about different direct mail formats
  • The opportunity to re-evaluate your media mix. Digital channels such as Connected TV and Affiliate Marketing continue to soar as popular ways to reach accurate and tuned-in audiences.

Looking Ahead at USPS Rate Incentives

The USPS plans to offer larger postal promotions and incentives as we look ahead to 2022. To name a few:
  • Emerging and Advanced Technology with a 2-3% discount.
  • Informed Delivery with a 4% discount.
  • Mobile Shopping with a 2% discount.
  • Personalized Color Transpromo with a 3% discount.
  • Tactile Sensory and Interactive Engagement with a 4% discount.
We understand that this can be a confusing topic. We are here to help break it down and determine relevant solutions for you. Our success is your success, and we will work through this change together. Research provided by Ask Wonder. Specific sources include the American Catalog Mailers Association (ACMA), Direct Mail Association (DMA), ChannelAdvisor.com, and USPS.

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