Postal News Feature Article

 

Shaped Based Pricing is Here!

Shaped Based Pricing has been approved effective May 14, 2007...........

Will you be ready?

 

The USPS Board of Governors announced approval of the Shaped Based Pricing initiative effective May 14, 2007.  All of the changes recommended by the Postal Rate Commission were accepted except for 3 items that were sent back for review or delay. (See - SD Postal News Flash) There is a lot of information and some confusion regarding this massive change in how and what the USPS charges for mailing services. To help you get through the maze of information, we thought that it would be useful to go through the details.

Why the change?

The USPS needs to capture the extra labor costs of handling mail that cannot be fully automated. Letter mail is about 95% automated, however, flat mail and to a greater degree parcels, cannot be automated to that extent.  Hence the need to make the change:

What does this do to costs?

 

What are the rules, how do I know what a flat is?

The chart above has led many people to express a variety of emotions; our advice to you is;

DON’T PANIC!

Steps to Take                                                    

 

 

Here are some steps that you should take to find what the real impact on your business will be.Calculate the impact of Shape Based Pricing, get to the facts:
        1. Audit your mailings to determine what you’re currently mailing (weight, size, thickness and postage costs).
        2. Calculate the impact by applying the new SBP rates and rules.
        3. Evaluate the potential increase in mail processing labor and cost (i.e. sorting mail by size, thickness and weight).
This will provide you with the real cost impact of the rate increase. If you can find a solution that will cost less than the increase brought about because of the change, you will be money ahead. Waiting to see what happens is not a good response, as waiting can cost your business money.

 

What are the solutions?

 

While there are some simple broad based strategies that can be employed, each situation is different and can require the application of more than one strategy. We suggest contacting your Account Representative at San Diego Postal and Shipping Equipment for a complete review of your situation. By allowing us to come on to your site, speak with operators as well as administrators, we can respond with a solution that is both efficient and cost justified. These fact finding meetings are just that, they are not sales calls. We won’t know if you even need something from us until after we gather the data. Some times businesses are surprised that our solutions are very inexpensive and do not involve acquisition of large equipment. When we do recommend application of equipment to solve a problem, we can cost justify it.

 

You can also sign up for our Shaped Based Pricing Open House on May 3, 2007 from 9:00 AM to 4:00 PM and talk to the industry experts that we will have on hand, or attend one of the seminars on this subject.

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