Softening the Blow

Apr 01, 2007 9:30 PM  By

No matter how much you read about the expected postal rate changes, if you’re like most other mailers you’re still seeking the answer to one question: “What can I do to reduce my postage costs?” Here are some suggestions.

Put your catalog on a diet

Reducing paper weight and trim size can help mitigate higher costs for catalogs that currently weigh more than 3.3 oz., as flats over that threshold will be charged by weight. “Some catalogers today might be printing on 32-lb. paper, and we might suggest going to 30 lb.,” says Chris Pierce, president of Lisbon, ME-based commercial printer Dingley Press. “That’s [a] 6% [decrease] on the weight. If your book is heavy, that’s going to make a difference on the postage, yet the difference between 32-lb. and 30-lb. paper is pretty indistinguishable to the ultimate customer.”

Likewise, “a lot of customers are talking about possibly reducing the trim size of the catalog by maybe a half-inch in each direction,” Pierce says. “We’re saying to customers, Why don’t you trim a little bit off the left side and trim a little bit off the top or bottom, and we’ll give you a catalog that your customers won’t know is any different, but we’re going to save you money in paper — and in postage — if it’s heavy enough.”

How much could you save with these kinds of changes? Let’s say it costs $0.50 to put a catalog in the mail, and $0.15 of that expense is paper. If you can save 10% of the paper cost through smaller trim size and lighter or less expensive paper, Pierce says, “you would save, in effect, $0.015 per catalog. If you mail a million catalogs, that’s a savings of $15,000.”

Pierce’s suggestions could help catalogs that weigh more than 3.3 oz. “chip away at the edges” to bring the book’s weight down in order to avoid the extra postage. But keep in mind there is a small risk that mailers could go too low and make their catalogs too flimsy to be machinable.

If a piece is too flexible, or too “droopy” in USPS parlance, it will not qualify for automation rates. Anita Pursley, Augusta, GA-based vice president of postal affairs for commercial printer Quebecor World, says Quebecor tested two versions of a square, 24-page mail piece; one version had two stitches in the backbone, the other had three stitches. “The three stitches passed the ‘perceived droop’ test, but the two stitches didn’t,” she says.

Convert flats to letters

Rate Case 2006-1 proposes financial incentives for redesigning flats as letters. “The flat-size mail has a higher percentage increase than the letter-size mail,” says Jerry Eiler, finishing technical engineer at Ripon, WI-based Ripon Printers. And so, adds Ripon mailing supervisor Diana Olm, the commercial printer is encouraging customers who have the opportunity to try to adjust their pieces to fit the smaller, letter-size category.

The letter category is restrictive, notes Eiler. “It’s a 3-oz. limit, and so the page count is lower, and the size is limited to a 6″ × 11″ piece. It also requires tabbing to qualify for automation rates.” But if you can work with the restrictions, he says, you’ll find that “the letter is becoming more economical than the flat rate.”

Aim for automation

If your mail piece currently qualifies as an automation flat but cannot be run on the Postal Service’s automated flat-sorting machine (AFSM) 100, it will be reclassified as either a parcel or a not flat-machinable (NFM). NFM is a new classification for items that have parcellike characteristics, including overly rigid pieces. Pieces that had been automation flats but will now be NFMs could suffer triple-digit postage hikes.

“If you can, you’ll want to try to reconfigure your mail piece to meet the dimensions of an automatable letter or automatable flat,” says Gene Del Polito, president of the Arlington, VA-based Association for Postal Commerce (PostCom). To fit an AFSM 100, a flat must be rectangular; between 5″ and 12″ high; between 6″ and 15″ long; and between 0.009″ and 0.75″ thick, among other criteria.

Pack it in

The Postal Service’s proposed dimensional-weight rates for Priority Mail items larger than one cubic foot are based on how much space the item occupies in a truck. This means that you might want to consider using smaller boxes instead of overloading larger boxes with excess dunnage to prevent items from rattling around. If you currently keep just three sizes of cartons in your packing area, then you may be better off adding another box size or two.

Marketers considering changing carton sizes might investigate variable depth, or multiscored, shipping cartons. Multiscored cartons provide you with additional carton sizes without the need for additional storage space. Each carton has multiple scores in the depth direction; you cut each side down to the desired depth with a standard box-cutting knife, and fold in the resulting flap. The final carton more closely conforms to the product in depth, which reduces the need for void fill when shipping as well as lowers postage under a dimensional-weight-based rate structure.

Join forces via comailing

Comailing, say printers, is an excellent solution for offsetting postage increases on catalogs. As Dingley Press’s Pierce explains it, a printer combines multiple mailing lists into one larger list to create enough density and volume to qualify for maximum postal discounts. Titles can be from the same catalog company or from multiple companies. The printer can bind the books on the same run or combine them after they’re finished. All the catalogs must have the same trim size and the same mailing dates, however, and the entire pool should consist of at least 1 million copies.

With comailing, Pierce says, catalogers can typically save $15 per 1,000 catalogs. “If someone’s mailing 500,000 catalogs and they save $15/M, that’s $7,500,” he says. “They’re probably going to mail five times in a year, so all of a sudden it’s $37,500. That’s real money.”

“Not only does [comailing] help you in your pallet density so that you have more mail that’s eligible for drop-ship discounts,” adds Quebecor’s Pursley, “but it also increases your presort discounts. You have more mail in the enhanced carrier route category and more mail in the five-digit category, which would offset [the proposed] three/five-digit deaveraging.”

Currently catalogers that presort their mailings by five-digit and three-digit zip codes pay a single rate for that two-level sort. The pending rate case seeks to end the two-level sort and is asking for a 9% increase for the five-digit sortation level and a 19% hike for the three-digit sort.

Share the burden

If you’re comailing, you should be able to benefit from drop-shipping discounts as well — though you can also gain the benefits by working with a consolidator even if you don’t comail.

The proposed rate case offers higher discounts for dropping mail at bulk mail centers (BMCs), sectional center facilities (SCFs), and destination delivery units (DDUs). The deeper into the mail stream you deliver your catalogs and parcels, the steeper your discounts.

“The best thing that [catalogers] can do is choose a print vendor or transportation company that can provide the most comprehensive distribution options,” Pursley says.

Clean up your lists

Mailing nonresponsive names is always a waste of money, but once the rate changes are implemented, poor-quality lists will further increase your postage bill. It won’t be enough for addresses to be certified by the Coding Accuracy Support System (CASS). They’ll also have to be checked against the Delivery Point Validation (DPV) system. CASS verifies that an address falls within a zip+4 range, while DPV verifies that an address exists. Each piece of mail with an address that can’t be validated will lose its automation discount.

“Cleaning up lists is an enormous issue,” says Del Polito. So investing in list address hygiene services from third-party suppliers is money well spent — not only to earn postal discounts but also to ensure that your catalogs are reaching the right customers and prospects.