USPS Releases Details of Rate Case

Oct 05, 2006 3:09 AM  By

Last week the U.S. Postal Service released its proposed mailing standards as part of the pending rate case, which if approved will be implemented in mid-2007.

The USPS hopes its proposed standards will result in more-efficient mail preparation and in aligning the rates with the actual costs of processing various types of mail. For that reason, a mail piece’s shape will be as critical as its weight in determining its postage; the current price structure is based primarily on weight. But the Postal Service has determined that certain large but lightweight pieces actually cost more to process than some smaller, heavier pieces.

Highlights of the proposed new mailing standards include:

Flats
* All flats must be rectangular, flexible, and uniformly thick. Nonrectangular, nonuniform, or rigid pieces will pay parcel or the new not-flat machinable (NFM) rates.

* Consistent size standards will be implemented for all flats. For example, Standard Mail Enhanced Carrier Route (ECR) flats will have the same maximum size as all other flats.

* Physical standards for automation flats will be adjusted to meet the current criteria for AFSM 100 pieces, with new standards for flexibility and deflection.

Not-flat machinable (NFM) pieces
* This new category covers Standard Mail pieces with parcellike characteristics, including rigid pieces. Currently these pieces qualify as automation flats under UFSM 1000 guidelines. These pieces are actually handled as parcels, especially at delivery. Under the new standards, these pieces will be presorted, entered, and processed as parcels.

* For the lowest NFM price, pieces must qualify for five-digit rates with minimum five-piece bundles on pallets for easier access.

Parcels
* Enhanced discounts to encourage drop-shipping of parcels to destination delivery units (DDUs)—local post offices–with no minimum volume requirement for parcels sorted to the five-digit level.

* Additional options to combine different classes of parcels in sacks and on pallets to achieve finer levels of presort as long as they are in the same processing category.

* Barcoding is required unless the parcels are prepared in five-digit/scheme containers.

Letters
* 3.5-oz. maximum weight for all First-Class letters.

* Fewer presort requirements for First-Class Mail and Standard Mail non-barcoded machinable letters.

* Requirement of full trays for most Enhanced Carrier Route (ECR) mail.

A cry for clarification
The new NFM category has more than a few mailers and printers confused. Rates for NFM pieces will fall between those for flats and those for parcels. Many mail pieces previously classified as a flat will be reclassified as an NFM or a parcel, adding considerable cost, but some say that the definition of an NFM isn’t clear.

“When does a flat not meet the specifications of a flat?” asks Don Landis, vice president of postal affairs for Menomonee Falls, WI-based printer Arandell Corp. “We’re uncertain about what’s going to drop in that category. It’s too vague and unclear. We want to know when does a flat become a not-flat machinable and when does it become a parcel? It’s a new category, and maybe that’s why we’re having an anxiety attack about it.”

Landis says he plans to submit comments to the USPS regarding the issue.

USPS spokesperson David Partenheimer says that NFM pieces are flat-size, except that they are

• over 0.75 inches and up to 1.25 inches thick, or
• rigid, or
* longer than 15 inches, up to 15.75 inches, or
* less than 6 inches in length, to a minimum of 4 inches, or
* shorter than 5 inches, to a minimum of 4 inches.

The definition of “rigid,” however, is another gray area, says Joe Schick, director of postal affairs for the Sussex, WI-based printer Quad/Graphics. “There are a lot of questions that go along with that and a lot of subjectiveness,” Schick says. “We need a more solid and definitive explanation of how that’s going to be managed by the acceptance group in the USPS. Otherwise, it will cause a lot of problems.”

What’s more, the proposed mailing standards require “a lot more legwork up front,” Schick says, to ensure “you’re not falling into the wrong category.” Catalogers may switch to lighter-weight paper hoping to cut costs, but “you could be creating a situation where a piece is more flimsy” and therefore less likely to qualify for automation discounts.

Schick says he understands that the USPS is trying to become more automated, but that “creates more stringent rules.” He believes the USPS needs to create a process that is “not quite so cumbersome.”

The Postal Service is accepting comments on the proposal through Nov. 13. Written comments should be sent to the Manager of Mailing Standards, U.S. Postal Service, 475 L’Enfant Plaza, SW, Room 3436, Washington, D.C. 20260-3436. The complete Federal Register notice on the proposal is available at: www.access.gpo.gov/su_docs/fedreg/a060927c.html.