Thanks for bearing with us this month with this two-part post! We thought it would be helpful to refresh everyone about how postage rates are charged. Now, we can get to the super important details: this month’s USPS rate increase.
Effective July 9, 2023, the USPS has put into place the following increases in their postal categories. Keep in mind that while these percentages are overall changes, specific sortation increases will be larger in some areas than others creating fluctuations from these announced increases.
– First Class mail has increased on average of 5.38%
– Flats (catalog) mail is increasing 7.38%
– High Density / Saturation Flats is increasing 3.07%
– Carrier-Route mail is increasing 7.39%
– Letters is increasing 5.20%
– High Density / Saturation Letters is increasing 5.06%
– Periodicals (Magazines) is increasing 8.12%
– EDDM (Every Door Direct Mail) is increasing 4.76%
Letter Mail
Most letters mail optimally at a 5-Digit/SCF entry mail. The 5D/SCF for-profit rate has increased 5.82% to $0.291/pc. With non-profit rates increasing 6.25% to $.136/pc. Saturation & high-density mail offers lower rate possibilities, but they are very difficult to achieve in national demographic programs. Commingling offers cooperative solutions to help minimize postage costs and should always be considered for pieces that do not qualify for 5-Digit/SCF entered rates.
Drop Ship SCF discounts for letters is increasing to $0.035/pc vs $0.030/pc & NDC discounts are now $0.027/pc vs $0.023/pc. Non-profit rates are increasing at a higher percentage than for-profit rates.
NEW: Effective with the July changes, the USPS is now offering a SCF entry Discount for 5-Digit & 3-Digit sorted mail. A similar discount was introduced for Flat Mail in July 2022, and it will offer some postage relieve for SCF pallets. Each qualified piece can earn $0.003/pc discount.
Flats – Four Ounces & Under
Basic Carrier Route mail will see average increases (6.82% at the SCF entry level), and High Density Plus and Saturation entry mail will see below average increases. High Density/SCF mail will see no increase after seeing much larger than average increases in the last several postal changes. Origin entered mail will see larger increases.
As with letter mail, drop ship discounts are growing, $0.091/pc for SCF entry and $0.071/pc, over all sortation levels.
Non-profit rates four ounces and under will also see larger increases that for-profit mail. We have seen this common occurrence with non-profit rates happen over the past several postal changes as they are trying to narrow the gap difference.
The USPS is also increasing their 5-Digit Scheme Pallet and SCF Pallet Discounts to help minimize increases. The discounts are the same regardless of for-profit or non-profit qualified mail.
Flats – Over Four Ounces
There are significant changes taking place with flats mail over four ounces. Previously, postage for pieces in this rate category received a piece postage charge PLUS a pound postage charge applied on each fraction of a pound mailed. The new rates continue to apply a piece rate, but the pound rate will only be applied for each fraction of a pound over 4 ounces (0.25#). Comparing rates from January 2023 to July 2023 will look odd (see chart below) because the new rate structure is pushing more postage in the piece portion and less in the pound portion, it is comparing apples to oranges. Drop ship discounts for pieces over 4 ounces used to be discounted from the pound portion of postage, but it will now be discounted from the piece portion of postage. You can see the differences in the chart below.
To better understand the comparison of before and after rates, here are a few for-profit sortation scenarios calculated at different piece weights:
There are three scenarios above, High Density, Basic Carrier Route & 5-Digit flat postage. As the piece weight grows, the impact of the increase also grows at a substantial rate. Heavier pieces are seeing much higher than average postal increases.
The same Pallet Discounts as outlined for Flats four ounces and under apply to pieces over four ounces giving some relief.
First Class Mail
– A stamped 1-ounce letter has increased to $0.66/pc from $0.63/pc (4.76% increase)
– First class flats have increased 7.15%
– First class postcards have increased to $0.355/pc from $0.352/pc (<1% increase)
USPS Promotions
As a general best practice, we advocate that all direct mail customers take advantage of the discount promotions that the USPS offers. The USPS has made the approval process much easier and more responsive with the addition of the Mailing Promotions Portal (MPP) on the USPS Gateway. The USPS is managing all inquiries and approvals through the portal, so it is imperative to sign up for the service.
2024 USPS Promotions
– Tactile, Sensory & Interactive – 5% USPS incentive for Marketing Mail & First-Class Mail – 2/1/2024 – 7/31/2024
– Personalized Color Transpromo – 3% or 4% USPS incentive for First Class Mail – February 1st – July 31st
– Emerging & Advanced Technology – 3% to 4% USPS incentive for Marketing Mail & First-Class Mail
*NEW – Direct Mailer can pick the 6-month window they would like to use this promotion
– Reply Mail IMbA – 3% USPS incentive for First Class Mail – July 1st – December 31st
– Informed Delivery – 4% USPS incentive for Marketing Mail & First-Class Mail – August 1st – December 31st. The mail preparer also receives a 0.5% incentive from the USPS
– Retargeting Mail – 5% USPS incentive for First-Class Mail – September 1st – November 30th
Not only can we help you take advantage of these USPS promotions, but together we can add strategy and innovation to your print marketing efforts. Additionally, with our network of printers & suppliers, we’re bound to solve challenges together that you may not have known you even had! We look forward to helping you navigate these updates and most importantly, use them strategically to ultimately grow your brand.
