USPS Sneaking in the Rate Hikes?

USPSeagleCrazy confusion from the USPS on new flats regulations; D. Edward Tree helps sort it out all. 

It looked like the USPS was sneaking in a tiny rate hike for flat mail senders, “a small fraction of 1% for most mailers,” writes D. Edward Tree in his blog. It might not even have been worth talking about, except for one important fact.

Tree explains that the new hike, because it was implemented under the radar with no regulatory approval or hearings, appeared ominous because “the U.S. Postal Service has given mailers good reason to believe this is just the proverbial nose of the camel in the tent.”

Tree explains that it wasn’t so much a rate hike but a change in the scope of its less-than-impressive Flats Sequencing System (FSS), adding a couple dozen new zip codes to labeling list. This would cause higher costs for flat mailers because, as Tree notes, “the postage on Standard, Periodicals, and Package Services flats are typically several cents per piece higher than what is paid for traditionally packaged mail.”

As it turns out, the USPS was just kidding, with an official statement saying that the new zip codes were “inadvertently added” to their July 1 list and would be removed by August.

So, it won’t be happening quite yet. But Tree predicts this is just the shot over the bow from the USPS, as they need to justify their $1.4 billion investment in the FSS—even though it’s less efficient to run and more costly for mailers…and destroys a lot of mail in the process.

Tree says it’s all about saving face: “When it comes to the FSS, postal officials are more concerned with CYA than ROI.”

Others agree. Joe Schick of Quad/Graphics made his opinion of the FSS program crystal clear: “Despite all the discussions around FSS between the mailing industry and the USPS, we have never seen anything that would give us a warm fuzzy feeling about the ability of FSS to be the low-cost process it was intended to be,” Schick wrote.

Meanwhile, if you are mailing in July, you can get a 30-day grace period on the new zip codes, which will soon be eliminated. Confused? Talk to your mailing provider to help get it sorted.