We all know stamps went up 2 cents (or 4.76%). Overall, the increase is 3.5%. Almost all classes we checked got an increase this year (including the 01/18/09 partial increase). However, not all did.

Most of the the parcel rates already went up on January 18. Bound Printed Matter was not included. BPM Flats are the big winners in the classes we’ve looked at so far. For non destination entry, the per piece rate and almost all the per pound rates went down. Overall, shippers should expect a net decrease of about 2 percent.  For destination entry, the per piece rate went up, but the per pound rates went way down. I would expect a net decrease of 7% for these shippers. On the Parcel side, the non-destination rates went up about 7 percent, but this is offset by a decrease in the per pound rates for destination entry. Our analysis of typical customer files, which include substantial DBMC drop shipments, nets an increase of less than 1 percent.

Unlike last year, non-profits aren’t excempt this year. Average non-profit rates rose by about 4.25%. While this is modest, and in line with the general increase, it’s still not the good news they got last yeat (when they saw decreases).

If you’re tracking the unfolding story of the Intelligent Mail Barcode, there’s news for you here too. Effective 11/29/2009, Full Service IMB shippers will be able to deduct $0.003 per piece for First Class shipments, and $0.001 per piece for Standard Mail. Not a lot, but it adds up.

If you’re interested in a particular class of mail, please leave a comment and we’ll post the details.

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.