Ross-Simons Slams Proposed USPS Rule Change For ‘Slim-Jim’ Processing

Apr 17, 2008 3:16 AM  By

Officials for jewelry and gifts merchant Ross-Simons say a proposed rule adjustment by the U.S. Postal Service, if implemented, would lead to the elimination of its entire circulation of 20 million letter-size catalogs in 2008.

Due to the price increases associated with mailing flat-size catalogs implemented last year, letter-size catalogs (also referred to as “slim-jims”) have become more popular. However, the USPS says in its proposal that “many slim-jims will jam letter automation equipment or become significantly damaged during processing. To avoid these problems, slim-jims often are run on flat-sorting equipment, where they process without significant problems, but at significantly greater cost. To rectify this situation, the Postal Service is developing new automation mail preparation standards for letter-size booklets and folded self-mailers that more accurately characterize which pieces can be run on its primary letter-sorting equipment.”

What’s more, the proposal says there has been an increase in untabbed booklets that are entered at machinable (nonautomation) prices.

“Many of these booklets cannot run on our primary letter-sorting equipment, even if tabbed,” the proposal says. “Our new mail preparation standards will better align the machinable and automation requirements and outline new tabbing requirements for efficient letter mail processing.”

The USPS tested two mailpiece thicknesses — 1/16 inch and 1/8 inch — and found that as long as the tabs remained in place and did not break, the 1/16-inch-thick pieces ran with jam and damage rates somewhat higher than the rates anticipated for similar enveloped letters. The 1/8-inch-thick pieces sustained unacceptable rates of jams and damage throughout the range of all characteristics tested.

After the USPS finishes drafting the new standards for booklets and folded self-mailers, it plans to extend those standards to all machinable letters. Any rule modifications would likely not take effect before 2009. Booklets are mailable at automation prices when barcoded and tabbed or sealed.

Booklets with the spine on the bottom edge, but without tabs, are currently allowed as machinable letters when they are not barcoded.

In the future, the USPS plans to allow nonbarcoded booklets and folded self-mailers to be mailed as machinable letters only if they meet all of the mail preparation requirements for automation letters. This change will ensure efficient mail processing for all letter-size booklets and folded self-mailers.

In an April 7 letter to the manager of Mailing Standards for USPS, Ross-Simons President/CEO Darrell Ross and Lawrence Davis, vice president of marketing, outlined their concerns regarding proposal #39 CFR Part 111, targeting letter-size booklets and folded self-mailers. Based in Cranston, RI, Ross-Simons was founded in 1952 and has circulated more than 1 billion catalogs since the first one mailed in 1981. The company’s current annual mail volume exceeds 40 million catalogs.

According to the letter, in May 2007 when Ross-Simons faced a 34% increase in postage costs for flat mail, it had two choices: “Pull 20 million catalogs from circulation, thereby crippling our business,” or “adopt what the Postal Service extolled as a great compromise: the letter-size catalog or ‘Slim-Jim.’”

After a lengthy examination of rates and sizes, and a “costly redesign” on three of four catalog titles, Ross-Simons officials contacted the USPS Pricing & Classification Service Center and told them they planned to shift their flats to letter-size mail. “We did this – fully aware that the Postal Service was examining the efficiencies of this ‘new’ breed of letter mail,” the letter says. “In October of 2007, we published our first letter-size catalog, a Slim-Jim (6” x 10.5”), followed by a digest (5.375” x 8.375”) and a modified Slim-Jim (6.125” x 9.375”).”

Ross and Davis agree that, due to price increases associated with mailing flat-size catalogs last year, letter-size catalogs have become more popular.

“Indeed, Ross-Simons would not be mailing letter-size catalogs if we didn’t have to,” the letter says. “However, our decision was not simply a ‘popularity’ contest; it was a business necessity. Ross-Simons was priced out of mailing 20 million flat-size catalogs and the Postal Service extolled the virtues of letter-size catalogs. We were under the assumption that we could run our business with this new paradigm.”

The two physical characteristics described as critical to jamming the letter-sorting machines are catalog thickness and tabbing.

“These same two issues are critical to catalogers, but our goals and your machines are diametrically opposed,” the letter says. “The goal of any cataloger is to optimize his selling space at the lowest possible cost. In other words, more products for sale on more pages (and hence a thicker book) is optimal. Given that the postage rate for letter mail is fixed per piece, we can optimize our postal efficiencies by printing the maximum number of pages up to 3.0 oz (or 3.3 oz for machinable, non-automated).”

If the new rules require that the maximum book size be cut in half from 1/8” to 1/16”, “then we will have to cut our pages in half,” the letter says. “The Postal Service will have effectively doubled the postage cost on our pages circulated.”

Regarding the tabbing, the letter points out that “the first goal of any cataloger is to get his book opened.”

“If a book doesn’t get opened, there are no orders and therefore no business,” the letter says. “Tabs that seal a book closed are a detriment to the open rate. Ross-Simons has specific test results across 1 million mailing pieces that demonstrate that tabbing a letter-size catalog results in a 20% decrease in response. These tests were performed with perforated plastic tabs (2.5/3/3) in an effort to make the sealed book as easy as possible for the consumer to open. Logic holds that if an easy-to-open tab was a negative with consumers, then a heavy-duty, leak-proof, non-perforated, USPS-certified tab would be a negative for the consumer and the mailer.”

Tabbing negatively impacts catalog response, according to Ross-Simons officials and industry-wide tests.

“Catalogers can expect to lose 20% of their business,” the letter says. “Tabs that are more difficult to open will intensify the issue.”

Ross-Simons officials predict that last year’s precipitous decline in flat volume due to the May 2007 postage increases “will be compounded by effectively doubling the cost of a letter-size catalog.”

“The proposed rule adjustments discussed in #39 CFR Part 111 will force Ross-Simons to eliminate our entire circulation of 20 million letter-size catalogs in 2008,” the letter says. “We simply cannot afford the same postage when it is amortized across a lower page count and fewer products. Nor can we afford this circulation knowing we will see a 20% decline in response due to tabbing. We believe that every other cataloger who has adopted the letter-size catalog will be faced with the same reductions of up to 50%.”

In its effort to convince the USPS that it is going down the wrong path, Ross-Simons officials have offered a suggestion.

“We would like to propose one simple change to the rules that apply to flats, which would allow many of us to return to this class of mail,” the letter says. “The level of enhanced carrier route penetration (ECR) on a flat mailing represents the most potential for a catalog mailer. We propose a reduction in the ECR minimum from 10 pieces to six pieces. This rule change would allow Ross-Simons to redirect millions of catalogs out of the letter class and back into flats. We predict that the millions of letter-size catalogs that are currently jamming the Delivery Barcode Sorter (DBCS) will be redirected back to the proper class of mail by other smart catalogers. We would embrace the opportunity to move our catalogs out of letter mail and into flats, as would many of our business partners. The Postal Service will get more revenue per piece at the ECR flat rate than it currently receives for letter-size catalogs.”

According to the Domestic Mail Manual (DMM Periodicals (707) Section 12.3) the ECR minimum for periodicals is six pieces.

“We hope the catalog industry will not be forced out of business in an effort to drive letter efficiencies that were never meant to be,” the letter says. “We remain optimistic that the Postal Service will maintain all of the current classes and preparation standards until every possible test and efficiency analysis is complete. We will not be able to afford to stay in business if we don’t mail catalogs while we wait for new standards. The nature of these changes is so critical that this is our highest priority for 2008.”

USPS spokesman David Partenheimer says a proposed rule would likely be published in June, including time for mailers’ comments, and after that a final rule.

“We always consider comments we get from mailers before we develop the final rule,” he says.