By Doug Price, VP Sales and Marketing, MidWest MailWorks

www.midwestmailworks.com, 2136 12th St, Rockford, 61104 - (815) 961-1556

   When the Post Office recently announced rate increases that will take effect May 14, the jump to 41 cents for a one-ounce First Class letter and the new Forever stamp got the headlines.

    But the big news for business mailers came later in the announcement. The new prices, according to the U.S. Postal Service announcement, "reflect differences in the costs of handling letters, large envelopes (flats) and packages."

    The bad news is the rates are going up for single-piece mailers, business mailers, bulk mailers and so on. But the good news is that, by making some changes to the design of the pieces they mail, many businesses can largely offset the postal rate increase. In some cases, if they make the right choices, they can actually decrease some of their postage costs.

    Here's an example of how one small change can make a big difference: A company will put two or three sheets of paper into a 9 x 12 envelope and pay flat rate postage. In May, the postage for a one-ounce flat is going from 42 cents to 80 cents. But if that company folds those sheets in half and mails them in a 6 x 9 envelope - which will now be considered letter-size - that one-ounce letter goes for 41 cents. So just folding a letter saves 39 cents off new postage rate. That's a huge savings.

    First Class postage rates will not escalate as much as in the past once the mail piece breaks over the one-ounce mark. The rates actually are reduced quite a bit for each extra ounce of mail.

    There are a lot of things like that in this rate change. A good direct-mail service can help its clients take full advantage of them. Because of presorting, I would expect a number of our clients to see the cost of some of the mail that they send through us actually go down.

    The new rate structures for two categories of mail that many businesses use are being reconsidered, at the request of Postal Service governors. Those categories are standard mail flats (catalogs) and what's called the "non-machinable surcharge" for first class letters.

    The governors feared the price hikes for flats that the Postal Rate Commission had recommended would cause "rate shock" on small businesses that mail catalogs - because they could rise as much as 40 percent.

    The reconsideration should take place before May 14. Probably sometime in April the governors will announce if there will be a revision of those presort standard flat rates. But until that happens we have to assume that the recommended rates will be in place.

    As for the "non-machinable surcharge," the Postal Service governors want to make sure the rates provide incentives for mailers to redesign letters so sorting equipment can process them.

    Many of these rate changes that affect business mailers are the result of a change in the Post Office's philosophy. Instead of being based on weights, the rates now will be driven more by the shape and the ability of the mail piece to be processed.

    An effective direct-mail service can advise people on how to qualify for 'machinable' rates by tweaking the design of a piece, often just a little bit.