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January 4, 2012
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Postage prices to increase about 2.1% Jan. 22
By Max Heath
NNA postal chair
Postage prices to increase about 2.1% on Jan. 22
The U.S. Postal Service filed Oct. 18 for an inflationary increase to be effective Jan. 22, 2012. Because the prior increase of 1.74 percent came April 17, 2010, inflation during a 9-month period as of the date of filing was just above 2.1 percent.
Price increases are limited to the rise in the Consumer Price Index as posted on the website of the Postal Regulatory Commission (www.prc.gov). USPS is also allowed to “bank” unused pricing authority from prior cases filed since the 2006 postal reform last was passed. USPS chose not to use any of the banked percentages in this case, preferring to mitigate the effect on mailers during the continuing recession.
HIGHER EXIGENT INCREASE STILL POSSIBLE
As always, USPS speaks out of both sides of its mouth. Under Postmaster General Jack Potter, it filed for an “exigent” price increase of 5.6 percent above inflation as the law allows for undefined special circumstances, which may negatively affect USPS revenues.
The PRC ruled against that request, and after an appeal by USPS to federal district court, it was remanded to the PRC for reconsideration as to how much of the increase request was “due to” extraordinary circumstances and how much was just regular decline, like that of First-Class Mail in the Internet age. In the later process, new Postmaster General Pat Donahoe withdrew the request for money, asking for just a ruling on the merits, saying mailers were “too fragile” in this recession to pay higher prices.
I bring this up primarily because, at deadline for this column, USPS reinstated its request because USPS wouldn’t grant a stay to Dec. 15 in the exigent case to allow time to see if Congress will provide any needed financial relief to USPS. So depending on bills in Congress, USPS could ask for some additional price increase later this year or early next year.
DETAILS OF JANUARY 2012 Increases
Periodicals prices for paid newspapers will have an overall increase of 2.133 percent, with outside-county prices going up about that amount and in-county prices come in closer to 2 percent. While those percentages are an average of all price cells, no newspaper uses them all. The real results are better seen by referring to a chart accompanying this article, which shows the actual increase by level of sortation, point of entry and weight.
Standard Mail prices for ad mail, like free newspapers and shoppers entered at the office of delivery (DDU) at the Saturation level, would increase 2.11 percent—from 14.2 to 14.5 cents at minimum price up to 3.3 oz., and declining percentages for pieces above that weight. Saturation prices are available to addressed mail to 90 percent of residential or 75 percent of total active addresses. Simplified Address mail to “Residential Customer” or “Postal Customer” would have to supply 100 percent of the copies for each active address.
DDU-entry High-Density price for 125-pieces per route and up in walk-sequence increase 2.38 percent from 16.8 to 17.2 cents at minimum price up to 3.3 oz., and declining percentages beyond that weight.
Basic carrier-route price for 10-125 pieces per route would increase 2.82 percent from 21.3 to 21.9 cents up to 3.3 oz., and declining percentages beyond that weight.
(One cost-saving tip: Newspaper shoppers sent to non-subscribers could be paying either High-Density or Saturation or both, depending on penetration of the paid newspaper. However, because of the sharp difference from High-Density to Basic price of 4.7 cents, circulators are advised to avoid mailing at Basic price if at all possible. And copies sent outside the carrier-route price category are much higher, and lists should be reviewed to see whether those copies are really necessary, or going to advertisers or agencies still active with the shopper.)
OTHER PRICE CHANGES
Here are some other price changes of interest to newspapers and all mailers:
First-Class stamp increases 1 cent to 45 cents, while the postcard price increases 3 cents to 32 cents.
However, for commercial presorted letters, the second ounce is now free, making the minimum price available for the first two ounces.
Permit applications for Standard Mail, and the annual bulk mailing fee, will increase to $190, from $185 now.
Periodicals application fee goes to $550, with Additional Entry application fees to $90.
Manual address correction price is still 50 cents, with electronic corrections at 28 cents for newspapers able to use Address Change Service electronically.
Detached Address Labels for Standard Mail will increase sharply from 1.7 cents to 5.0 cents. But most users are Saturation mailers. Because the Postal Service changed the rules Jan. 2, 2011, to allow simplified address mail on city routes, as was previously allowed on rural routes, there is no valid reason for mailers to use DALs.
If CIS readers have specific questions about these prices (which should be approved as proposed), or other postal issues, please feel free to contact me at the e-mail address below. © Max Heath 2011
Max Heath, NNA postal chair, is a postal consultant for Publishing Group of America (American Profile, Relish, Spry) and Landmark Community Newspapers LLC. E-mail firstname.lastname@example.org.
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