Getting the most out of your postage
A DIVCODATA White Paper
I occasionally shop online and anxiously await the arrival of the item ordered by mail. Like a little boy on Christmas, checking the mailbox is a lot like looking under the tree to anticipate the arrival of that moment when I would get to unwrap that present!
While most trips to the mailbox are not as much motivated by a child’s curiosity, but rather the obligation to stay informed. I check my mailbox almost every day. It’s one of the most common details of life. No matter who you are, where you live, or what you do, we all get mail.
According to US Postal Service statistics ranging over the past ten years, the United States Postal Service delivered an average of 650 million pieces of mail every day, delivering to as many as 150 million delivery points nationwide. That’s a lot of letters, bills, cards, and packages! While there are many options to ship things around the country, the US Postal Service still provides the most cost-effective delivery method for most anything we want to send. This is especially true of letters, and even more so for statements and invoices sent from
Utilities and other service providers.
To meet the growing concern about the decrease in mail volume, and in an effort to reduce costs, the Postal Service adopted a consolidation program in 2012. This program included an increase in postage over a 5-year period, closures of distribution centers, closure of smaller delivery units, acceleration of retirement of vested personnel, and other measures.
As a mail service professional, I can tell you first-hand that this consolidation has dramatically affected many aspects of this industry.
On one hand, cost of postage is on the rise. The delivery methods, routes, and sorting technologies are continuing to evolve. Delivery standards are improving as the Postal Service continues a fundamental transformation in how the Service works.
On the other hand, the Postal Service is streamlining mail like never before, automating as much as they can internally, working toward full automation in sorting, distribution, tracking, and other services. All automated mail must now carry the Intelligent Mail Barcode, or IMB.
With the introduction of the IMB, the Postal Service can improve many steps in transit and delivery as well as reduce costs. The IMB contains all the information of the delivery point/ delivery address, enabling postal machines to sort and route the mail and reduce manual sorting and distribution. This process saves delivery time, labor within the USPS, and postage costs to customers across the country, all by adding the IMB to the mail piece.
Simply put, the US Postal Service has increased resources and priorities focused on driving the industry toward Automated Mail, both in delivery standards and increased postage discounts when mail is presented as automated presorted mail.
In my experience, working with all types of mail customers and mailings, it is my observation that utilizing Automated mail is the most effective way to take advantage of the partnership with the US Postal Service. My colleagues and I believe that moving the industry toward Automated Mail is the centerpiece of the consolidation program. Working to understand our customers’ needs helps us tailor mailing programs to find the right balance between managing postage costs and effective delivery of mail pieces.
Even with the increase of web services, mail is still considered by most companies as the most cost effective way to deliver statement of services and billing. This presents an exciting opportunity for us to assist our customers who generate revenue in the form of billing and payments.
One significant change to First Class Mail is the way mail is handled. If I send my sister a birthday card, I’ll address the envelope by hand, place a First Class stamp on it, and drop it in my mailbox or one of the blue boxes. My card is considered ‘machinable mail’ and will be sent to an OCR reading machine where the address will be read and an Intelligent Mail Barcode generated and printed on the mail piece immediately so that the mail piece will be easier to move, track, and deliver once it enters the mail stream.
High-volume mailers sending large amounts of mail at one time will often use a service to add that barcode prior to sending it to the Post Office, and therefore ‘Automating’ that mail. All mail that already contains the Intelligent Mail Barcode is considered ‘Automated’ mail and will be sent straight to machines designed to read the barcode in sorting, transit, and delivery.
Prior to the consolidation program, both of these categories of First Class Mail were delivered on average in 1.8 days. Since the consolidation program started in 2012, machinable mail, mail pieces holding stamps or metered postage, hold a delivery average of 2.1 days, while Automated mail, mail pieces that already contain the Intelligent Mail Barcode have decreased in delivery time to 1.5 days on average.
The more automated the mail is when it’s accepted by the Postal Service, the more it saves in the cost of processing that mail in order to transport and deliver the mail, and for every step saved in that process, the cheaper the postage, passing those savings straight to the customer.
Postage for a 1 oz. stamped letter is currently 49 cents. Postage for a 1 oz. metered letter is currently 46 cents. By automating the mail prior to mailing, that same 1 oz. letter will mail at an automated rate as low as 37.5 cents. Do the math with your mail volume and see just how much you could be saving Many organizations, districts, and government offices are taking advantage of the postage savings while benefiting from improved address quality of other systems offered by Automated Mail.
Automated mail equals better address quality, higher confirmation of exact delivery points with the CASS Certification and use of the National Change of Address database (NCOA), faster delivery times, and higher confidence that your customers are receiving their statements, increasing revenue streams and decreasing postage costs.
Whether you’re mailing statements, invoices, or just a birthday card, it should build confidence knowing the new ways the Postal Service is improving the experience and perception of its customers.
Note on the Author: Thomas E Goddard serves as the Mail Services Manager for DivcoData, a Print, Process, & Mail company located in Chattanooga, Tennessee. Thomas holds several certifications with the US Postal Service, including Mail Design Professional and Executive Mail Center Manager, MailPro Advanced Certification with Idealliance Inc, and is currently working on his Certified Mail and Distribution Systems Manager (CMDSM) certification through Mail Systems Management Association. Thomas is the chairperson of the local Postal Customer Council (PCC), working with customers to better utilize the US Postal Service products.