On October 9, the United States Postal Service (USPS) announced rate changes for Marketing Mail and for Periodicals mail. Assuming that the Postal Regulatory Commission (PRC) will approve the new rates, they will go into effect on January 24, 2021.
In Marketing Mail, rates for High Density Plus and Saturation flats – used primarily by newspapers’ Target Market Coverage (TMC) packages – will not change at all. In the category of Marketing Mail, USPS devoted much of its available rate authority under the price cap structure to increase rates for catalogs and parcels. However, it should be noted, if your TMC package includes a Detached Address Label and Detached Marketing Labels, there will be a one cent increase per label.
In Periodicals Mail, the In-County pound rate and the carrier route piece rates will not change, but the rate for Non-barcoded 5-Digit flats will rise by 8.22 percent.
In Outside County mail, USPS is making changes to encourage mailers to enter their mail in ways that the agency can handle more efficiently. Most notably, the USPS is establishing a separate rate for trays (“tubs”), so for the first time they will be priced differently from sacks. The National Newspaper Association, representing primarily weekly newspapers, has been pushing for this change for some time. The new trays rate will rise by less than 0.4 percent, while the sacks rate will increase by more than 5.5 percent. Thus, for the first time, trays will be priced lower than sacks. As with In-County mail, the pound rate also will not change.
Workshare discount passthroughs in the proposed Periodicals rates are quite low. For example, for In-County, there is no workshare discount for entering at the Destination Delivery Unit or local post office, and the discount for sorting to the Carrier Route level passes through only 34.9 percent of the costs avoided. The Postal Service’s filing in this rate case devotes several pages to arguing that workshare passthroughs should not be required to be set at or near 100 percent in a class, such as Periodicals, that does not cover its costs.
Here is a list of examples of the rate changes for newspapers’ products that are mailed through the Postal Service.
While we expected USPS to keep rates relatively low given the impact of Covid-19 on the mailing industry, this could change in future years as the PRC has proposed a new rate setting system that would allow USPS to raise prices beyond the statutory rate cap outlined in the Postal Accountability and Enhancement Act of 2006. If this happens, rates for newspapers’ TMC and editorial products could skyrocket in the coming years. The Alliance will fight at the PRC and in Congress to maintain this rate cap that has ensured reasonable and predictable rate changes, and which has incentivized mailers to maintain mail volumes in the system.
If you have any questions, please contact Alliance Senior VP, Public Policy, Paul Boyle.