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2017 Postage Rates Released

2017 USPS Price Changes

What you need to know:

  • Prices increasing across most classes of mail
  • Approval still required from PRC
  • Anticipated effective date in January 2017
  • BCC Software customers will receive software updates well in advance

As anticipated, the USPS filed their proposed 2017 price changes late afternoon on October 12, 2016. Fortunately for BCC Software customers, we’ve been keeping a close pulse on these changes since earlier this summer when the new USPS VP Costing Sharon Owens shared the anticipated structure changes. We are already working on these changes, and once approved by the Postal Regulatory Commission (PRC) will release updates for our software well in advance of the final implementation date.

As we continue to work through the 200 page filing, we’ve already identified a few items worth noting.

  • First-Class Mail – Overall Price Increase is 0.78%
    • Single piece postage increasing to $0.49 per piece – restoring the rate prior to the exigency price rollback.
      • Note that we are still closely monitoring House Resolution 5714, which would also restore a portion of the exigency price.
    • Equalized AADC and 3-digit pricing.
    • Increased maximum weight for First-Class Mail Nonautomation Presorted Machinable Letters and Standard Mail Machinable Letters from 3.3 ounces to 3.5 ounces.
    • “Second Ounce Free” increased up to 3.5 ounces.
  • Standard Mail (soon to be called Marketing Mail) – Overall Price Increase is 0.895%
    • FSS Price categories to be removed, resolving some of the undesired effects of the May 2015 FSS price changes.
    • The Basic CR Rate for FSS Zones is being restored. This will have a large impact on catalog mailers and other advertising mailers using Flats sized pieces.
    • Maximum weight of Standard Mail flats that pay piece rates only will increase from 3.3 ounces to 4.0 ounces. This will allow flats mailers to mail more pages and advertising for the same postage dollar.
    • Change the name from Standard Mail to Marketing Mail in order to more appropriately reflect its primary usage.
      • Note that this name change has already raised concerns among industry associations. We will be closely monitoring this proposed change as it is discussed in the upcoming MTAC meetings.
    • Parcels receiving an above average increase of 1.583% to begin correcting cost coverage.
  • Periodicals – Overall Price Increase is 0.832%
    • FSS Price categories to be removed, resolving some of the undesired effects of the May 2015 FSS price changes.
    • Increases to bundle and pallet pricing to move rates closer to a cost coverage.
  • Package Services – Overall Price Increase is 1.007%
    • FSS Price categories for Bound Printed Matter to be removed, resolving some of the undesired effects of the May 2015 FSS price changes.
  • Special Services – Overall Price Increase is 2.536%

For market dominant products, the prices the Postal Service is asking for is a combination of new Consumer Price Index calculation and leftover pricing authority not used last year.

Workshare discounts are also being closely scrutinized in the wake of the recent Annual Compliance Report, which revealed pass through discounts exceeding 100% of the attributable costs. This included destination entry discounts, which for Standard Mail would have meant increasing letter prices by 7.6%. Thankfully, that did not occur in this filing and maintains the value of Drop Ship entry. However, it will be something the USPS intends to continue to carefully increase in order to comply with Title 39.

The filing also revealed a new promotion focused on smaller value mailers called the “Direct Mail Starter” incentive, applying only to mailings totaling under 10,000 pieces.

We will have more to follow regarding this important proposed price change including notification if and when the Postal Regulatory Commission approves the docket.