To Survive, USPS Must Change Strategy

Burrus Testifies on Capitol Hill:
To Survive, USPS Must Change Strategy

APWU Web News Article #060-09, May 20, 2009

In testimony before a House panel May 20, APWU President William Burrus told lawmakers that if the Postal Service is to survive, it must re-examine its overall strategy.

He emphasized that there is an urgent need to pass H.R. 22, which would allow the USPS to pay its share of contributions for annuitants’ health benefits out of a retirees fund rather than from its operating budget. “But adjusting the payment method of retiree healthcare benefits is just one option the Postal Service is pursuing, and it is only a short-term fix to stave off imminent collapse; it will not address the long-term challenges,” he said.

The union president also condemned many of the USPS’ cost-cutting efforts. “Actions such as plant consolidations, employee reassignments in large numbers, [and] reduced retail hours are having a detrimental effect on service, and in many cases generate little or no savings,” he said during a hearing held by the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia.

The cost-cutting initiatives are undermined by the Postal Service’s flawed rate strategy, Burrus testified, which slashes revenue from major mailers without reducing USPS expenses.

Underscoring the severity of the USPS’ financial crisis, several lawmakers at the hearing, including subcommittee Chairman Stephen Lynch (D-MA), indicated that Congress may have to consider allowing the Postal Service to reduce the number of delivery days from six per week to five.

Burrus rejected the suggestion, calling it “an act of desperation” that would “hasten the demise of the Postal Service.” Private companies would step in to provide service on the sixth day, he said, accelerating the diversion of mail from the Postal Service.

Congress is unlikely to approve such a proposal, Burrus said, but because it is so dramatic, entertaining it “sucks all the oxygen out of the discussion.”

Strenuous Opposition

Speaking specifically about the postal network, Burrus noted that “since the release of its original Transformation Plan in April 2002, the Postal Service has ignored demands by legislators and workers for details about where, when, and how consolidation would take place.”

Many of the consolidation announcements “generated strenuous opposition from workers and affected communities,” he testified, noting that “in 2006 and 2007, 37 of the 50 consolidations were terminated, placed on hold, or reversed.”

The Postal Service also “was the subject of severe criticism by the Government Accountability Office (GAO) for the lack of transparency in its planning efforts, and for failing to allow for sufficient input from workers, citizens, and public officials,” Burrus said.

A GAO report [PDF] concluded that “Inconsistency in data calculations also impacts the ability of USPS to accurately determine the expected cost savings,” and noted that “the USPS Inspector General found discrepancies in the projected cost savings… resulting in savings that may have been significantly overstated,” Burrus pointed out.

Concerns Persist

“Despite USPS assurances to the contrary, citizens, community leaders, small-business owners, and postal workers are concerned that a ‘realigned’ mail processing network will reduce service and delay delivery of the mail,” the union president said.

“The danger is clear: If service to small businesses and individual citizens is permitted to decline, it could lead to the demise of the institution. Regrettably, the Postal Service has consistently failed to share an overview of its network realignment plans.”

A basic flaw in the Postal Service network realignment strategy is that it considers only the facilities under its direct control, Burrus said, and ignores the broader mail-processing and delivery universe that includes private facilities. In doing so, the Postal Service ignores savings that could be achieved by reducing outsourcing and worksharing-discount.

The Postal Service asserts that it is attempting to cut costs, Burrus observed. “Despite the shortcomings I have outlined, I want to emphasize that the APWU does not oppose cost reductions or improved efficiency,” he said. The record shows, for example, that the union has supported the USPS automation program, he noted, “even though it had a profound effect on the number of APWU jobs — because we believed it was necessary for the long-term survival of the Postal Service.”

Rate Strategy Subverts Efforts

The APWU president told lawmakers that the USPS cost-cutting efforts are “subverted by its postage rate strategy, which dramatically reduces revenue from major mailers without a corresponding reduction in service.”

“The USPS business model is based on the erroneous premise that discounts for large mailers increase volume. However, a review of the effects of three decades of rate manipulation reveals that discounts have failed to boost first-class volume.”

During the Capitol Hill hearing, Burrus presented data that demonstrate that “despite disproportionate increases in postage discounts, volume has been unaffected.”

“The misguided rate strategy has undermined the principle of universal service at uniform rates,” Burrus testified, “and tests the limits of the law. Under the guise of transferring postal work to the large mailers and rewarding them with discounts derived from ‘costs avoided,’ the uniform-rate standard has been eroded.”

The only mailers who pay the “published” first-class rates are individual citizens and small businesses, Burrus said. “Passing H.R. 22 will provide the Postal Service immediate relief; but the long-term solution to the crisis is to end the policy of subsidizing large mailers at the expense of American citizens and the USPS.”

Tags: Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster

Postal Service has survived past challenges — and it will again

By DAVID BECKER II
Special to the Herald-Journal

Published: Wednesday, May 27, 2009 at 3:15 a.m.
Last Modified: Tuesday, May 26, 2009 at 6:50 p.m.
The Herald-Journal’s recent editorial, “Postal progress,” begged for balance in both logic and facts about the U.S. Postal Service, our employees and customers. Here’s some food for thought for your readers.

While it’s true that the recession and the Internet are contributing to difficult financial circumstances for the Postal Service, the major cause of loss of mail volume and revenue is the economy. Let’s not all throw in the towel and turn to the Internet without considering some important facts:

* The U.S. Postal Service is our nation’s third largest employer; its employees and customers represent a functioning, viable $900 billion economic cornerstone of our economy in a time when jobs are scarce.

* Eight-two percent of Americans still pay their bills by mail.

* Like other American businesses, the Internet has revolutionized customer service for the Postal Service with usps.com providing 80 percent of the services you get at a post office. In 2008, stamp and retail sales at the Postal Store totaled more than $442 million.

* The Postal Service has the largest fleet of alternative fuel vehicles in the nation: 43,000 in all.

* According to the Environmental Protection Agency, advertising mail accounts for less than 2.4 percent of municipal waste in landfills.

* Postal Service Priority and Express packaging is free, eco-friendly and recyclable.

* Thanks to the Postal Inspection Service and the Office of the Inspector General, delivery of your mail is secure.

* Less than 4 percent of identity theft happens through the mail; the remainder comes from illegal computer access of personal information.

* Without the Postal Service providing affordable, universal, surcharge-free prices, private shipping rates would likely skyrocket.

* Is e-mail cheaper than a 44-cent stamp? Consider the cost of the computer, the Internet service provider fee, the power bill and the ongoing equipment upgrades.

* About one-third of our population does not have Internet access.

* Ideas to charge per e-mail already have been considered by Internet service providers. Without a postal alternative, service providers could charge and raise the cost for each e-mail at will.

* Other forms of communication (TV and the Internet) have a considerable negative environmental impact, sending outmoded models to landfills by the millions. According to the National Safety Council, only 11 percent of computers get recycled, and small-time consumers alone add 10 million computers to landfills each year.

From the telegraph to the Internet, new technology has historically caused many predictions of the end of the Postal Service. But because the Postal Service is able to adapt and change to ensure secure, affordable, universal delivery, it has withstood similar threats to serve our country for almost 250 years.

David Becker II is the Spartanburg postmaster.

Tags: coutesy reply mail, delivery times, Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, move update, Move Update Requirements, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster, Savings, USPS, usps regulations for flats

Lands’ End becomes first catalogue client of Royal Mail’s Sustainable Mail service

by Noelle McElhatton, Marketing Direct 27-May-09, 09:00

LONDON – Upmarket clothes catalogue Lands’ End has been signed up as the first mail order client of Royal Mail’s green DM postal service, Sustainable Mail.

The service, launched in April, offers a lower price tariff for mail that meets environmental criteria in line with the new DM green standard, PAS 20:20. Black Horse Personal Finance and Standard Life are already using Sustainable Mail.

Lands’ End, which sells high quality casual clothing and footwear by mail order and online, has just posted its first catalogues using the Sustainable Mail service.
Direct mail posted through Sustainable Mail is priced up to 4.7 per cent lower than standard Mailsort prices and is available to mail users that meet criteria based on three environmental criteria: improved sustainability, minimised waste and increased recyclability.

Tim Curtis, Lands’ End managing director, said Sustainable Mail would help the mail order firm “ensure every aspect of our catalogue distribution programme is sustainable”.

“We were already doing what we thought was right for the environment, such as delivering our catalogues without polywrap, but Sustainable Mail highlighted other ways we could be more environmentally friendly, and rewards us for doing them. It’s a great service and we’re delighted to give it our seal of approval.”

Tags: coutesy reply mail, delivery times, Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, non profits direct mail, Post Office, postage increase, postmaster, Savings

Madison Avenue Flirts With 3-D

According to the Wall Street Journal, “Papa John’s International, the U.S. Postal Service and General Electric have begun to incorporate “augmented reality,” or AR — a technology that lets consumers interact with hologram-like images — into their marketing. One well-known example of AR: the yellow first-down lines in TV broadcasts of football games. This week, the Postal Service will start running an ad campaign that touts a flat-rate shipping fee for its Priority Mail service. The online portion of the ad effort includes a “virtual box simulator” on the prioritymail.com site. The simulator allows consumers to hold an object, such as a cup or a book, in front of a Webcam and use the resulting 3-D image to determine the right size box for shipping the object. The push into AR comes as companies have grown dissatisfied with relying solely on static advertising or passive media like TV commercials, which have washed over coach potatoes for years. In pursuit of alternatives, they have pumped money into approaches that encourage consumers to “engage” with their message or product, something ad executives believe helps increase sales.”

Tags: Cost, Direct Mail, Direct Marketing, junk mail, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster, Savings, USPS, usps regulations for flats

Postal carrier gets probation for hiding mail

By ED WHITE – 20 hours ago

DETROIT (AP) — A Michigan postal worker who hid thousands of pieces of mail in a storage unit has been placed on probation for two years.

Jill Hull appeared in federal court in Detroit Thursday, three months after pleading guilty to deserting the mail, a misdemeanor.

In September, managers of a self-storage business opened Hull’s unit and discovered thousands of pieces of unopened mail, including first-class letters. Some had postmarks from 2005.

The 35-year-old Hull has said she couldn’t keep up with her route in Livingston County, 50 miles northwest of Detroit.

U.S. Magistrate Judge R. Steven Whalen declined to order a fine, saying Hull can’t afford it.

Tags: Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster

Live From the ACMA Forum: Catalog Industry Broken

From: MULTICHANNEL MERCHANT May 21, 2009 11:36 AM, By Jim Tierney

Washington – The catalog industry is broken, according to Robert Bernstock, president of shipping and mailing services for the U.S. Postal Service. Huge postage rate increases have crippled many catalogers, he told attendees at the second annual National Catalog Advocacy & Strategy Forum, put on by American Catalog Mailers Association, and as such, “the business model is broken.”

The good news is that the USPS wants to help the catalog industry anyway it can. “We can reconstruct the entire supply chain to lower costs,” he said.

What’s more, Bernstock totally engaged the packed room when he suggested taking a “relook at the whole structure”— from pricing, service, and operational efficiencies. “We want the lowest cost delivery system,” he said. “We need to take a major relook at the whole structure.”

It’s no secret that catalog volumes is down sharply: Hamilton Davison, executive director, of the ACMA, reminded attendees that catalog volumes have sank 35% in the past two years.

But Bernstock stressed that “We’re not in this for anything other than the catalog industry to be healthy. The USPS is a willing partner in this. We have to increase the value of the catalog to the consumer.”

“Finding a solution to the ailing catalog industry is a priority,” said Tom Foti, manager of marketing mail for the USPS. “With cost and response there has to be a balance.”

Right now, there is not a balance there, he said. “We’re going to have to look at the whole supply chain. We have to increase the value of a catalog to the consumer.”

Customized pricing is another possibility, Foti added. Creating a new catalog product would bring “a spotlight on catalogs” and potentially fix an infrastructure with better organization and better business decisions.

“We have to turn the tide on catalogs,” Foti noted. “The value of catalogs often gets lost on the public.”

Tags: Advertising, Direct Mail, Direct Marketing, direct marketing association, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, USPS, usps regulations for flats

The Postman Will Ring More Than Twice, but Maybe Not Six Times

By Joe Davidson
Thursday, May 21, 2009

If we still used the Pony Express to deliver mail, someone would shoot the horse to put it out of its misery.

The U.S. Postal Service is like a once-proud thoroughbred now crippled with a broken leg — or two. It remains a venerable institution, but it has been so severely handicapped by the recession that lawmakers are beginning to seriously consider cutting a day of delivery.

That gradual — and reluctant — shift in attitudes was evident at a congressional hearing yesterday at which the Postal Service again made a plea for legislation that would allow it to cut mail delivery from six days a week to five.

“The only way we’ll embrace it is if we have no other choice, and we’re getting to that point,” said Rep. Stephen F. Lynch (D-Mass.), chairman of the House Oversight and Government Reform subcommittee on federal workforce, Postal Service and the District of Columbia.

Compare that with the words of one subcommittee member, Rep. Elijah E. Cummings, a Baltimore Democrat, at a hearing just two months ago: “I would bet everything I’ve got that’s not going to happen.”

Rep. Jason Chaffetz (R-Utah) said yesterday that while his “immediate reaction is ‘No way,’ ” he might be willing to consider some combination of delivery-day cuts and a taxpayer subsidy — another term for a bailout. Currently, the Postal Service gets zero tax dollars.

“I don’t think we can get rid of any possibilities at this point,” Chaffetz added.

The difference between March and now is the devastating and escalating decline in Postal Service finances.

William P. Galligan, a USPS senior vice president, told the panel that the agency posted its second-quarter financial results after the last hearing. Compared with the same period last year, total mail volume fell almost 15 percent. Revenue is down 10.5 percent. Almost $2 billion was lost in the second quarter.

“We are projecting a loss of more than $6 billion for this fiscal year,” Galligan said.

This year the service expects to move 180 billion pieces of mail. That sounds like a lot, but it’s 32 billion less than in fiscal 2007. The collapse in volume is the largest since the Great Depression.

Postal officials have implemented several cost-cutting measures, including a hiring freeze, closing a few district administrative offices and reducing work hours. Unfortunately, that’s not enough to keep the agency from going broke.

“Even if the Postal Service is successful with all of its cost-control and transformation efforts, it appears likely that without legislative relief the Postal Service will run out of cash this year and face serious financial difficulty in 2010 and beyond,” said John D. Waller, director of accountability and compliance at the Postal Regulatory Commission.

The legislative relief the Postal Service wants is permission to change the way it funds retiree health-care benefits and to cut the sixth delivery day, most likely Saturday. Legislation the subcommittee is considering would allow the agency to pay for the health benefits of current retirees out of its Retiree Health Benefit Fund instead of its operating budget, saving about $2 billion this year.

“Unfortunately, as mail volume continues to plummet, even [the legislation] will be insufficient to close the gap between costs and revenue,” Galligan said. “That is why we must make fundamental changes to our service network — including reduced delivery frequency.”

But just how much reducing delivery will save is the big question, and an important factor in determining congressional support. Last year, the Postal Service projected $3.5 billion in savings annually, if the cutback did not lead to a reduction in volume. The Postal Regulatory Commission assumed mail volume would decline with a cut in delivery days and projected a savings of $1.9 billion.

Del. Eleanor Holmes Norton (D-D.C.) said Congress will want an independent assessment of the savings a five-day schedule would bring. “I would seriously consider it if we had an independent study showing that it would make a structural difference” in postal operations, she said.

Galligan is prepared for strong congressional opposition to the five-day proposal, but he thinks it must be done.

“In the simplest words I can find, we can no longer afford the costs of six-day mail delivery,” he said. “In my mind, it is no longer a question of if, but rather when, will economics require this change,” he said.

“The time, I believe, is now.”

Written statements from the hearing can be found here: http://federalworkforce.oversight.house.gov/story.asp?ID=2444.

Tags: Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster, USPS

The United States Postal Service & Power Company?

Switching to electric delivery vehicles would enable the U.S. Postal Service to make millions by selling electricity and to reduce delivery costs by millions as well, a postal expert says.

Batteries for the electric vehicles could be charged during off-peak hours and kept connected to the grid, writes Michael Ravnitzky, Special Assistant to Commissioner Ruth Goldway of the Postal Regulatory Commission, in a paper published today on the PRC’s Web site. When not being used in delivery vehicles, stored power in the batteries could be sold back into the grid at times of peak or unexpected surges in demand.

(A presentation Ravnitzky did recently on the concept can be found here. The paper grew out of an op-ed piece Ms. Goldway wrote for The New York Times.)

USPS’s fleet of 142,000 right-hand drive delivery trucks is nearing the end of its useful life. The vast majority could be replaced by electric vehicles using today’s battery technology, Ravnitzky writes.

“Most daily mail delivery routes are short, repetitive and well-defined, and include many stops, making the postal delivery fleet a prime application for electric drive vehicles. The electrification of the postal fleet could significantly reduce gasoline and maintenance expenses while reducing the fleet’s carbon footprint,” he says.

“Historical experience with electric drive vehicles suggests maintenance cost reductions of at least 30 percent to 50 percent,” he writes. That, and an electricity cost that is equivalent to 80-cents-per-gallon gasoline, suggests annual savings for the Postal Service could be in the hundreds of millions of dollars.

On the revenue side, Ravnitzky sees more opportunity from storing electricity and having it available to the grid on a contingency reserve basis than from actually selling electricity. As such unreliable sources as wind and solar power became more of a factor in the grid, he notes, the needs to store electricity and have it available on a rapid-response basis will grow, he says. He estimates $2000 to $2500 annually in revenue per vehicle from various “V2G” (vehicle to grid) services – which would mean several hundred million dollars if most of the fleet went electric.

“The operators of the electrical grid are essentially running a massive just-in-time delivery system and it can be tricky to keep this system balanced.”

Electric vehicles cost more upfront than gasoline-powered ones, and some investment in battery-charging operations would also be needed, according to Ravnitzky. Mass production of the expensive batteries would reduce the cost and presumably give a leg up to manufacturers developing similar products for the consumer market. Further study is needed to provide detailed information on capital costs, operational savings, revenue potential, and environmental impact, Ravnitzky says.

Perhaps his vision could be employed to provide a simultaneous bailout for three needy recipients – American car companies, the U.S. Postal Service, and the environment.

Tags: Direct Mail, Direct Marketing, direct marketing association, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia, Philadelphia Post Office, Postage, postage increase, postmaster, Savings, USPS, usps regulations for flats

Postal Service Expects Steeper Declines

The U.S. Postal Service has cut 25,000 jobs this year and mail volume will continue to drop into 2010 as it struggles to break even and return to profitability, Postmaster General John E. Potter warned today. The bleak outlook comes as the agency expects a $6.5 billion loss this year that — with cutbacks and increased borrowing — can be trimmed to $1.5 billion.

“Unfortunately, I wish I could say we’ve hit bottom, but we haven’t yet,” Potter told reporters at the start of this week’s National Postal Forum, a mailing industry convention.

USPS anticipates delivering 180 billion pieces of mail this year, far below the record 213 billion delivered in 2006. Worse, Potter says mail volume will likely bottom out at closer to 170 billion pieces per year.

“Folks are looking at alternatives and there are some that simply will not return,” he said. The agency has commissioned a survey of its largest customers in hopes of anticipating future workloads.

As if the migration to e-mail and e-commerce wasn’t bad enough, the collapse of the housing and financial sectors have made the Postal Service fall faster and farther. Fewer housing starts mean fewer new addresses created each year. Potter said new addresses will drop from an average of 1.9 million per year to 1.1 million. The financial sector, which has long relied on the mail to transact and communicate with its customers, has also cut back on mail significantly. Last week’s 2-cent increase for the price of first-class postage might also make it difficult for some customers, and Potter said the bump will not be enough to offset losses.

“What we really need to be talking about is how to do we find a path back to break even and then beyond break event to profitability,” Potter said. He’s seeking permission from Congress and the Obama administration to delay billions of dollars in payments to an employee retirement fund, money that could help offset current losses. The service has also cut more than 10,000 city carrier routes in the last several years, saving about $100,000 per route and the eliminating the need for some vehicles.

Then there’s the possibility of trimming a day of service, a suggestion Potter threatened earlier this year might be necessary someday soon. Lawmakers have all-but killed the cutback for now, but Potter discussed it as a realistic solution during today’s conversation with reporters.

“With some minor exceptions, people have told me that if they have to adjust their operations, they can,” he said.

Still, “Until people hear from us…they should count on getting the same great service that they’ve always got.”

The Associated Press contributed to this report.

Tags: Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, new postal regs, non profits direct mail, Philadelphia Post Office, postage increase, USPS, usps regulations for flats

Summer Postage Sale – well, sort of a sale, no, more like a small rebate

To those that are excited about the impending summer postage sale, there are a few details you need to know, first, did you receive a letter from the USPS recently?
Here is what it looks like: summer-sale-electronic-letter

Here are the details:
The USPS has made it official (almost) that they are going forward with the proposed ‘Summer Sale’ event. The PRC must still weigh in with their decision, which is expected in late May, to make this program official. This program would provide a 30% postage credit on mailings submitted between July 1, 2009 and September 30, 2009. This incentive program is designed to increase mailing activity during the usually dormant summer months, when the USPS has their most excess capacity available.

Unlike most sales however, there are a multitude of qualifiers that apply to the Summer Sale.

Who and what qualifies?
For the most part, the USPS has already determined what mailers qualify. Letters were sent out on 5/7/09 to approximately 3,200 mailers whom they determined will be eligible for this program by utilizing the mail volume data that exists within their internal system.

1. This program only applies to Presorted Standard letters and flats.
2. The next qualifier is that you must have mailed a minimum of 1,000,000 pieces during the time period of October 1, 2007 and March 31, 2008. Total volume is calculated by mailer, so even if you utilize multiple permits, your total volume will be calculated across all permits that are associated to your organization. This also applies to “Ghost Numbers”, which are created if your mail is sent through a Mail Service Provider. If you feel you are eligible, but have not received a letter, then you can request a contact by emailing your information to summersale@usps.gov.

If you have met the criteria above, you are ready to begin to calculate the ‘Sale’ portion of the program. The 30% postage credit will be given only on the number of mail pieces that exceed your mailing threshold for the time period of July 1, 2009 to September 30, 2009. The caveat to this all is that your mail volume in October must not fall below your mailing threshold for that month. If this occurs; the total credit accrued from mailings between 7/1/09 to 9/30/09 will be deducted by the amount of pieces that fell below the threshold in October and that will be the final credit. The credit will be issued at some point in December of 2009 once the USPS has completed the above calculations.

How to calculate your potential savings:
Below is an example of how to calculate the savings that you as a mailer may receive through this program. Listed in this example is the all important Threshold, which will be the key to planning your mailings to take advantage of this program.

1. Base volume (7/1/08 – 9/30/08): 500,000 pieces

2. Trend:

a. Volume 10/1/08 – 3/31/09 = 1,800,000 pieces

b. Volume 10/1/07 – 3/31/08 = 2,000,000 pieces

c. a/b = (1,800,000 / 2,000,000) = .90 or 90%

3. Base x trend = Threshold:
500,000 x .90 = 450,000

4. Rebate = (Actual volume – threshold) x (actual postage cost / actual volume) x 30%

a. Actual volume for 7/1/09 – 9/30/09 – threshold =
475,000 – 450,000 = 25,000 pieces

b. Actual postage cost / actual volume =
$103,075 / 475,000 = $0.217

c. Rebate =
25,000 x $0.217 x .3 = $1627.50

The October Effect:
It is important to keep your mailing volume for October in mind when factoring the potential savings. If your volume falls below the calculated threshold, then your overall credit will be impacted. Below is an example of how to calculate this effect.

a. October 2008 volume x trend (in #2 above) = October threshold:
300,000 x .90 = 270,000 pieces

b. If October 2009 (260,000 pieces) < October threshold:
Threshold – actual = adjustment
270,000 – 260,000 = 10,000

Rebate adjustment

a. Actual volume – summer sale threshold – rebate adjustment:
475,000 – 450,000 – 10,000 = 15,000

b. New rebate:
15,000 x $.217 x .3 = $976.50

For those of you that have received a letter; be sure to certify the volume that the USPS has provided to you since this will be a binding once you have agreed to enroll in the program. Also be sure to have your response in by August 1st, 2009.
This program is a great way to potentially reach more customers at a lower cost and therefore enhance your business’ ROI. The system is not perfect, but it is a step in the right direction for the USPS to utilize their new found pricing freedom to help mailers.

From the Federal Register today:
Federal Register Notices

DATE: Pending publication in the Federal Register.

Standard Mail Volume Incentive Program (aka Summer Sale)

AGENCY: Postal Serviceâ„¢.

ACTION: Final rule.

SUMMARY:
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®), to add section 709.2 which introduces new standards for a special volume incentive program for mailers of Standard Mail® letters and flats with mail volume exceeding their individual USPS™-determined threshold levels. The program period will be from July 1, 2009 through September 30, 2009.

EFFECTIVE DATE: July 1, 2009.

FOR FURTHER INFORMATION CONTACT: Kevin Gunther at 202-268-7208.

SUPPLEMENTARY INFORMATION:
The Postal Service is implementing a volume incentive program for qualified high-volume mailers of commercial or Nonprofit Standard Mail letters and flats, for volume mailed between July 1, 2009 and September 30, 2009, above their USPS-determined threshold level. This program encourages mailers to provide new volume and to take advantage of our current excess capacity to process and deliver additional volume.

Tags: Add new tag, Advertising, Booklets, Cost, coutesy reply mail, Direct Marketing, intelligent mail barcode, Jack Potter, Jack Potter congressional testimony, junk mail, Letters, Mail, Mailing, mailing services, Money, move update, Move Update Requirements, National Change of Address, non profits direct mail, one code, PCC, Philadelphia, Philadelphia Post Office, Post Office, Postage, postage increase, postmaster, Savings, summer postage sale, USPS, usps regulations for flats, USPS summer sale