WEBINAR: Navigating the USPS Postal Rate Increases: April 27th, 2022

Key Takeaways

The USPS filed with the Postal Regulatory Commission (PRC) for price increases to First-Class Mail, Periodicals Mail, Marketing Mail, Package Services Bound Printed Matter, and other special services and fees.

The PRC must approve the proposed prices, which we anticipate will happen around May 27, 2022, with price increases being implemented on July 10, 2022.

Overall, prices are proposed to increase from 6.5% to 8.5%, but individual rate cells within each mail class may see higher or lower than these averages.

Marketing Mail Flats: the largest volume of this mail falls into the Carrier route presort category, which will see an increase of 8.75% (Regular rates) or 16.6% (Nonprofit rates). Increases for finer sortation levels, such as High Density, High-Density Plus, and Saturation are lower, so participating in a cooperative mailing service, such as co-mailing, commingling, or co-binding, is more beneficial than ever.

Marketing Mail Letters: the largest volume of this mail falls into the 5-Digit presort category, which will see an increase of 6.4% (Regular rates) or 4.2% (Nonprofit rates). Carrier route sortation, including High Density and Saturation, is not of value to the USPS for letter mail. For this category, the use of commingling is beneficial if your mailings are not of sufficient size or density to reach the 5-Digit pre-sort level. Dropship incentives for this category increased, so there are opportunities for savings by drop shipping.

Periodicals Mail: prices for lower sortation levels increase by 11.3% to 14.4%, while increases for higher sortation levels (Carrier Route, High Density, and Saturation) increase by only 1.8% to 3.8%. Cooperative mailing services will help reach these higher sortation levels. For the pound rate portion of Periodicals postage, the advertising pound rate increases by only 0.7%, while the editorial pound rate increases by
17.8% for Zones 1-9. The USPS has also flattened the Zoned pound advertising prices to have a diminished (but not eliminated) benefit for dropshipping. Periodical mailers are advised to analyze the impact of their ad/edit ratios on their postage increases.

Bound Printed Matter Flats: For presorted mail, increases from 6.32% to 7.14% on the piece rates, with no increase on the pound rates. There was no increase for DDU drop shipments and a 4% to 4.98% increase for DSCF drop shipments. For non-presorted mail average increase of around 4.5%.

Bound Printed Matter Parcels: Significant changes in this category! For presorted mail, increases of 10.03% to 11.1% on the piece rates, while pound rates see everything from increases of 58.95% for Zones 1&2 to a price decrease of up to 51.76% for Zones 8 and 9. For non-presorted mail, increases of around 25% for lower zones and weights, while higher zones and weights actually see decreases in the pricing of up to 38.99%. The bottom line for these mailers: analyze your mailings to determine the impact of the increase – look at using different packaging, different sizes, paperweights, page counts, etc., to see what the optimal configuration is for your mailings.

First-Class Mail: Retail stamp increases from 58 cents to 60 cents. For commercial letters, increases are around 6.2% to 6.9%. For commercial flats, increases range from 0% to 16.5%, with lower increases for weights less than 3 ounces and progressively higher increases as the weight increases up to the limit of 13 ounces.

Intelligent Mail Full-Service discounts and Seamless Acceptance discounts remain in place with no increase.

USPS Promotions for 2022 remain unchanged as these are offered on a calendar year basis. Last August, the incentive amount increased for some promotions, up from a 2% postage discount to 3% or 4% discounts. Definitely take advantage of these promotions for First-Class and Marketing Mail to help mitigate some of the postage increases.

The key takeaway is that these increases are substantial, especially on top of similar increases implemented in August 2021. The best way to mitigate the increases is to optimize your mailings. The best way to do that is to participate in a cooperative mailing program, such as co-mailing, commingling, co-binding, or co-palletizing. By mixing your mail with mail from other mail owners, finer presort and dropship penetration levels may be reached, resulting in the most cost-effective mailings. Take a look at your schedules and your configurations (paperweight, trim size, page counts, etc.) to see if making modifications will make participation in cooperative mailings easier.

LSC Communications is happy to work with individual clients and prospects to discuss how your mailings can best be optimized.

Reach out to us at: PostalOperations@lsccom.com

Presentation slides from the webinar: 

July 2022 USPS Proposed Price Impact External Client Webinar Slides_Final.pdf (2.39 mb)

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