2018 USPS Rate Increase Recap - Midwest Direct

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November 27, 2017

2018 USPS Rate Increase Recap

2018 USPS Rate Increase

Recently, the Postal Regulatory Commission (PRC) approved the rate case filed by the USPS Postal Service for rate changes to take effect on Sunday, January 21, 2018. While the average increase is 1.9% (capped by the current CPI -  Consumer Price Index) in each market-dominant class of mail (First-Class, Marketing Mail, Periodicals, Package Services and Special Services), there are again variations by type of mail and the depth of presort. The “average” rate increases quoted by the USPS and shown below combine the rates for automated and non-automated mail. We broke down some of these individual rates to help explain the impact to our customers:

FIRST-CLASS MAIL

As you’ve already heard, both retail cards and letters will increase by a penny, with the price of a First Class stamp increasing to $.50. Retail flats will increase from $.98 to $1.00 (using two First Class letter stamps).   

While rates for single-piece letters and cards will increase 2.1%, presorted letters and cards will increase an average of 1.6%. AADC and 5-digit automation letter rates will increase about 1.3%. 

Flats mailers benefit with a minor average increase of .4%. Mixed and 3-digit automation flat rates decrease by about 6%, while the 5-digit automation flat rate will increase a hefty 6.3%.

First Class Package Service will increase 3.9% (about $.05). However, packages weighing 7-8 oz. and over 13 oz. experience the greatest increases (ranging from $.15 to $.50, almost 15%). 

The IMb discount remains at $.003.

USPS MARKETING MAIL

Letters and flats increase an average of 2% each, while parcel mailers will see a larger increase of 2.8%.

Letters presorted at the 5-digit auto level will not change ($.251), while the AADC and Mixed AADC rates experience minor increase and decrease adjustments under 1%. 

The USPS determined it had been overestimating the cost savings that destination entry provides for letter mail. For this reason, it continues to realign the relationship between SCF, NDC and origin-entered mail. Destination entry discounts for letters were therefore decreased; the NDC entry discount for letters will decrease from $.026 to $.024, and SCF entry discount rates will decrease by $.003.      

Carrier Route sorted letters will increase an average of 2.0%. However, high-density/saturation auto letters entered at origin will not change ($.196 and $.186). The basic CR Letter rate will increase .8%. The NDC discount rates will all decrease slightly (i.e. overall rates for direct NDC and SCF entry will increase by 1-2%).

Auto flats mailers will realize a larger increase of 6% to 8.7% at the ADC and Mixed ADC levels, while the 5-digit rate will increase 1.6%. The NDC entry rate for auto flats will have a slight increase from $.04 to $.041. 

The auto flat carrier route rate will increase by 1.7% at the basic level with minimal adjustments at the high-density/sauration levels. The NDC and SCF entry discounts remain unchanged.       

The IMb discount also remains at $.001.

NONPROFIT MAIL

While the overall average increase is 1.9%, auto letters will increase from .6% to 1.5% at the basic to 5-digit sort levels. The NDC entry discount for letters will decrease from $.026 to $.024. 

Basic carrier route letters will increase .5%, while high-density/saturation rates remain unchanged.  

While mixed ADC Auto flats increase 6%, 5-digit Auto flats decrease 7%.  

Basic carrier route flats will increase 2%, while high-density flats will decrease slightly and saturation rates will remain unchanged.

PERIODICALS

Because of the complexity of rates for periodical mailers, it’s difficult to delve into specific rates. Overall, the Outside County rates will increase by 1.9% and Inside County rates will increase 1.8%.

Larger circulation mailers will pay 1% to 1.9% more; smaller circulation mailers will see above-average increases (over 2%). 

Nonprofit periodical mailers will see a range of increases up to 1.3% as well as decreases to 1.4%. 

Ride-along prices increased by $.001, or .6%

PACKAGE SERVICES

The USPS delivered 62% of all residential packages in 2016, and is on track to exceed that in 2017. Most of these are via Parcel Select (the service used by Amazon).

Media Mail, Library Mail and Bound Printed Matter (BPM) flats will all increase an average 2%.

Parcel Select Lightweight increases 7% while Non-Lightweight Parcel Select will increase 4.9%

OTHER SERVICES

  • • Priority Mail will increase an average of 6.2% and Priority Mail Express will increase 3.9%. Flat Rate products increase 10% and Regional Flat Rates decrease an average of 11%
  • • P.O. Boxes increase 1.9%
  • • Certified Mail increases 3.0%
  • • Address Correction Services increase 2.5%

The highest package and parcel increases are in the lower weights and inner zones.

Meanwhile, UPS and FedEx have both announced holiday surcharges and upcoming rate increases (4.9%) that make the USPS even more competitive in 2018. 

MOVE UPDATE COMPLIANCE RULE CHANGES

While not a part of this specific Rate Case filing, the USPS is also increasing the Move Update Assessment charge from $.07 to $.08 per piece, also effective on January 21st. This price change relates to the introduction of a new method of Move Update Verification.

The new method, called the Address Quality Census Measurement and Assessment Process, applies to letters and flats for First Class and Standard Mail that meet the requirements for basic or full-service mailings, and will replace the current MERLIN method of measurement.

The new process will result in several benefits, including enhanced mailing visibility and improved mail quality metrics over all mailings within a calendar month, rather than sampled mailings.

Any mailer that has Full-Service volume will have their mailpieces scanned in the mail stream by mail processing equipment. Results of these verifications are displayed in their Mailer Scorecard. The results are aggregated  across the calendar months and measured against the established USPS Move Update thresholds. Any mailpieces exceeding the threshold will be charged the Move Update assessment fee for each piece over the threshold.  

Mailers who claim presorted or automation prices for First Class or Marketing mail services must update their mailing list for customers who have moved within 95 days of the mailing date. Addresses that are not updated for customers who have moved more than 95 days prior to the mailing date may impact the mailer’s eligibility to claim these rates, and be subject to further fees.

Need help ensuring you are in compliance? 

Midwest Direct is a Move Update Compliance expert. We will meet with you, and show you how to become and stay compliant with your addresses and avoid any penalties from USPS. Contact us to get started.

 

Written by: Gary Seitz, Vice President of C.TRAC Direct

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