Per documents filed on the Postal Regulatory Commision website on August 11, this offer will only be open to mailers with a volume of 500,000 pieces of First Class Mail in the same period in 2007 and 2008. This only effects non-parcel (letter, flat and card) mailings. Furthermore, it will only apply to volume in excess of a “threshold” target. This threshold is calculated by determining the amount of growth (or shrinkage) in a mailer’s volume between 2007 and 2008, and applying the same percentage to their 2008 volume. The discount will thus reward any pieces in excess of  projected, normal volume.

At the end of the program period, a rebate will be posted to the mailer’s permit trust account. In order to detect mail being held over from September or pulled forward from January, the 2007 and 2008 mail voluimes from those periods will also be examined and any drop in volume in those periods will be deducted from the mailer’s credited volume.

While this may result in modest revenue and volume gains for the USPS, the practice of targeting only the largest mailers may miss the mark. If the program were applied to all mailers, small businesses would have more incentive to use the mail. These small volume mail producers are most often overlooked by the big mailing firms. Besides the fact there are more small mailers than large ones, there is almost always more USPS revenue in 100 mailings of 1.000 pieces than in one mailing of 100,000 pieces.

What we do in these cases is switch to Standard Mail with drop shipping. The Standard Mail rates are lower, and by dropping the mail closer to its destination, we’re able to overcome the timing issues.

First, your piece has to qualify for Standard Mail. This means you can’t have any personal information inside, such as account balances. You also won’t get returns or forwarding services with Standard Mail without incurring additional charges.

Second, to gain a benefit, you must have a need for First Class style timing, and a piece that weighs more than one ounce. Alternately, a First Class flat or parcel would also gain by using this technique. If you’re not particularly interested in the timing benefits, you can just change to Standard Mail and realize a large savings anyway. By the use of pre-canceled stamps and other techniques, you can avoid the perception issues some associate with Standard Mail.

Once you’re past these hurdles, here’s how it works. We sort the mailing list for Standard Mail and identify geographic regions with large concentrations of mail. this can be an individual post office (DDU), a 3-digit zip Sectional Center Facility (SCF), or a regional Bulk Mail Center (BMC). Those destinations are then separated and forwarded to the appropriate center by truck or other carrier, or by Priority Mail sacks. This eliminates a lot of the sorting and travel time that would be incurred inside the USPS transportation system, and shortens the delivery window. The difference between the First Class and Standard Mail rates, plus discounts received by dropping into these centers results in charges that are about the same as the one ounce First Class rate. For a 2 or 3 ounce piece, this can be a substantial savings.

To illustrate the savings, one example customer had the habit of sending advertising letters in #10 envelopes weighing less than a pound by First Class. At current rates, their average postage per piece was 35 cents. When they shifted to a 6×9 envelope, with additional material weighing 2.5 ounces, the First Class rate would have been 60 cents! Their base postage for a Standard Mail letter weighing 3.3 ounces or less was 24 cents. This plus the shipping and processing charges, less the DBMC, DSCF and DDU discounts came to an average cost of 37 cents, a savings of 23 cents off the First Class rate. In all, they saved $6,325 off the postage they would have paid if they continued using First Class. Delivery times were equivalent and predictable as well.