IF MAILERS THOUGHT they had the ins and outs of postal rate categories and preparation nailed down, they may need to think again. The U.S. Postal Service plans to implement a reclassification by the summer of 2004.
Postal officials say the reclassification — which they’re calling a product redesign — will lead to increased volumes and revenue as the service faces back-to-back deficits of between $1 billion and $3 billion over the next two years.
“We have broad objectives to come out with a set of products that meet customer needs and reduce the costs for both the postal service and its customers,” says Don O’Hara, executive director of product redesign in the postal service’s pricing and product design department.
O’Hara is leading the redesign effort, which has three major areas under consideration, including a revamp of Standard (advertising mail including catalogs) and Periodical flats that would mean new rate categories and preparation requirements. Changes to how mailers prepare their mail would more closely match the way the USPS processes flats. This would aid a new generation of machines being installed by the postal service, providing major increases in internal automation flat-processing capabilities.
“To take full advantage of these machines’ capabilities, we need to change the way mailers prepare flats for us,” O’Hara says. “Now mailers spend time and money making up packages for as few as six or 10 pieces and we spend time and money undoing the packages to process the flats. We need to find a better way.”
Bulk mail rates for Standard and first class mail might include an additional option for simplified preparation that would be attractive to both small and some large mailers. Having this option in place would facilitate increased requirements for sophisticated mailers to qualify for the deepest discounts, O’Hara says.
And within Standard B (parcel post, bound print, media mail and library mail) the rate structures and classification rates would be harmonized to “some degree” and could include moving packages from Standard to Package Services, the new term for Standard B.
One option that appears unlikely is the merging of Standard A and Package Services mail into a newly named single category.
Officials hope the overhaul, now in the early stages of development, will help them meet and possibly overcome increased competition from private carriers and e-commerce as well as the changing needs of customers. The USPS expects to file the proposed redesign case with the Postal Rate Commission in midwinter 2003.
Work on the redesign began in May, just six years after the USPS merged third and fourth class mail into Standard A and B mail and changed the name of second class mail to Periodicals and Publications. That reclassification was the first since the postal service reorganized in 1971, O’Hara says.
Postal officials are asking direct marketers, catalogers and mass mailers to send their comments to Don O’Hara at the U.S. Postal Service, 1735 North Lynn St., Room 2043, Arlington, VA 22209, or by e-mail at [email protected].
Network
