The United States Postal Service announced proposed rate increases for postage, to go into effect on January 26, 2020. There are no real surprises for those who regularly do business with the USPS. The service took full advantage of its authority to increase revenue, by postal class.
Of these increases, first-class stamp and package prices will affect the general public. Those who send catalogs, periodicals and direct mail should understand available options to control the total cost of mail.
How it affects budgets
The proposed rate hikes are now available to the public. They don’t necessarily apply to all commercial customers, though.
Quad analyzed data from all campaigns that we’ve optimized for clients in the past year, across several formats. Then we looked on a granular level at how businesses could save more with greater efficiency.
The big takeaway — co-mail continues to provide the most savings across the board. Periodicals and catalogs are seeing up to a 75% reduction in the price increase with co-mail. It also lowers direct mail by up to 10%.
Customers can also reduce costs through automation, carrier-route and destination delivery unit sortation, saturation, and commingling for direct mail.
With these considerations, Quad anticipates that real-world increases will be on average:
- Periodicals – 2.0%
- Direct Mail – 2.1%
- Catalogs – 1.8% to 2.1%
Options to lower costs
With the rates now public, USPS customers can better plan programs for 2020. It’s not just about adding a percentage to a budgetary line-item, though — marketers can proactively reduce the impact of increases.
Physical dimensions and page-counts affect how the USPS classifies mail. A different design or paper stock can lower costs.
Consider co-mailing and commingling
The new numbers make co-mail more advantageous to marketers, with a wider gap in rates. Production networks are more efficient with automation, volume and fewer touchpoints.
Plan around promotions
The Postal Service highlights services and formats throughout the year, with promotional discounts for customers. Plan campaigns with timelines for this calendar in mind.
Now, the Postal Regulatory Commission has to vote on price recommendations in mid-November. They likely won’t have any objections. Approval will set the process in motion for January implementation.
There’s no single best course of action for marketers. Everyone’s postal goals and needs are different. Each situation has unique ways to reduce costs and make rate increases easier to manage.
Quad will continue to monitor the pricing proposal and add additional details through this blog in the weeks to come.