USPS Seeks Reclassification of Standard Parcels

The U.S. Postal Service has asked the Postal Regulatory Commission (PRC) to reclassify some Standard Mail parcels to complement its current shipping product line.

USPS officials said the strategy for the Standard Mail small parcels redesign “eliminates confusion for customers” by breaking the category of mail into two distinct customer segments: marketing parcels and fulfillment parcels.

The USPS request is to transfer commercial Standard Mail fulfillment parcels from the market-dominant product list to the competitive product list. If approved, fulfillment parcels would become a lightweight subcategory of Parcel Select. According to the USPS, the “only real difference” between the two products is the weight. Standard Mail fulfillment parcels weigh less than 1 pound; prices for Parcel Select start at 1 pound.

Marketing parcels is replacing the not-flat machinable category that will be eliminated upon approval by the PRC. Pieces up to 2 inches thick can then be mailed as marketing parcels. An addressing qualifier, such as “Or Current Resident,” also must be included on the parcel.

Fulfillment parcels must be addressed to a specific resident or business owner and be used for mailing products ordered or purchased that weigh up to 1 pound: DVDs, CDs, checks and lightweight sweaters or shirts.

If the PRC approves the USPS request, Standard Mail fulfillment parcel prices will increase about 23%, effective Jan. 2, 2011.

Gerard Hempstead, president of Hempstead Consulting and a former vice president for DHL, says if the PRC approves the USPS request then “rules on rate increases will change dramatically.”

What’s more, he says, the USPS could negotiate the price a customer pays for parcels less than 1 pound. “It allows the USPS to take even more price increase on this category than it’s doing now. And it inserts a real sense of uncertainty on discounting. Plus, the discounting could bias a rate in the favor of a few.”