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May 1, 2009 12:00 AM
Aside from the May 11, 2009 price increase, the two most significant events this year will be the United States Postal Service's (USPS) rollout of the Intelligent Mail barcode and extending the Move Update requirement to Standard Mail. Both of these initiatives provide opportunities for astute mailers, and increased liabilities if not fully understood.
Mailers that are claiming discounts on their Standard or First Class mail pieces must have updated the names and addresses at least 95 days prior to submitting the mailing. This rule is in effect today and is directly tied to reducing the nearly 10 billion pieces of Undeliverable As Addressed (UAA) mail handled annually by the USPS. According to a UAA study conducted in 2006, the cost related to UAA mail is $2 billion with non-current addresses constituting well over 75 percent of the additional handling costs to forward, return, or dispose of the UAA mail.
Because the USPS considers Move Update a requirement for any postage discounts, the penalties for noncompliance can be significant. First Class mail that is deemed noncompliant will be charged the full single-piece rate across the entire mailing. For Standard mail, the proposed penalty is seven cents per piece across the entire mailing since there is no single-piece rate. This equates to roughly $70 per thousand pieces; a significant penalty when one considers that the typical cost for updating addresses with NCOALink (an approved Move Update method) is $2 per thousand pieces.
MERLIN, the Mail Evaluation Readability Lookup Instrument, is a tool the USPS uses to assist with the acceptance of business mail, including Move Update compliance. The USPS had initially targeted May 11, 2009, as the official date to leverage MERLIN as the primary adjudication device for Move Update compliance. However, that date has now been moved to January 2010 in order to determine tolerance levels for acceptance.
The Intelligent Mail barcode is another major initiative that has had some changing dates. Originally planned for implementation in January 2009, the rollout of the Full Service Intelligent Mail barcode (IMBC) is now set to begin May 18, 2009. At least that is the date those mailers who wish to take advantage of the benefits of Full Service IMBC will begin testing the electronic postage payment requirement with the USPS.
There are also postage discounts that will go into effect in November of 2009 for mail pieces that use the Full Service version of the Intelligent Mail barcode. First Class Mail pieces that are compliant may receive 3 tenths of a cent ($.003) and Standard mail pieces may receive one tenth of a cent ($0.001). Compared with the cost of implementing new hardware and software for supporting IMBC, these discounts seem paltry in comparison. However, the USPS is quick to point out that there are many additional benefits to IMBC.
Effective May 2011, the Intelligent Mail barcode will replace Postnet as the only barcode eligible for postage discounts. Since there is no specific discount for use of the Basic Intelligent Mail barcode, it is likely that many mailers will continue to use Postnet until then.
Regardless of the type of barcode used, or the Move Update method applied to names and addresses, the next several years will see numerous changes to the mailing industry. Keeping abreast of these changes will be essential for mailers who wish to continue to reap the greatest opportunities in postage discounts as well as timely and predictable mail delivery.
An excellent resource for more information on Move Update and Intelligent mail is the newly designed USPS RIBBS web page (http://ribbs.usps.gov). Mailers should also continue to work closely with their software and hardware providers and work collaboratively with their local USPS business mail acceptance office and mail piece design analysts.
Christopher Lien is executive vice president for BCC Software, Inc., a Böwe Bell + Howell Co. Contact him at email@example.com.
The USPS will likely implement temporary postage discounts for high-volume mailers who schedule drops between June 15 and Sept. 15. While the details of the program are still being worked out, discounts are expected to be between 20 percent and 30 percent.
If the program is implemented, discount levels will be based on mailers' meeting individually calculated levels based on the volume of mail they sent out between June 15 and Sept. 15, 2008. Because of the manpower needed to calculate each level and discount, the sale may apply to only the 4,000 largest Standard Mail class users, according to a Direct Marketing Association (DMA) statement speculating on the discount program.