Volume I, No. 4 December 1994 Newsletter
AVERAGE 4.8 Percent Rate Increase Recommended for Priority Mail
In the rate case filed on March 8, 1994, the Postal Service requested a 10.3 percent across-the board rate increase for Priority Mail. That request sought a markup over attributable cost of an astoundingly high 109 percent. For Priority Mailers, the Postal Rate Commission's recommendations to the Postal Service Board of Governors, released on November 30, contained both good news and bad news. For example:
New rates take effect on January 1, 1995 at 12:01 a.m. Priority Mail pieces that weigh up to 5 pounds continue to be unzoned (a proposal by the Postal Rate Commission's Office of the Consumer Advocate to rezone the rates for all lighter-weight Priority Mail was rejected). New rates also reflect an even increment of $1.00 per additional pound, up to 5 pounds. Old and new rates up to 5 pounds are as follows:
Weight (lbs) Old Rate New Rate Percent Change 2 $2.90 $3.00 3.4% 3 4.10 4.00 -3.1 4 4.65 5.00 7.5 5 5.45 6.00 10.1
The Postal Service Board of Governors has asked the Commission to clarify how it arrived at its Priority Mail rates (and its rates for Bound Printed Matter as well). How all of this will play out is unknown at this time.
APMU Joins MTAC
On October 19, 1994, APMU was officially admitted as a member of MTAC, the Mailers Technical Advisory Committee, to represent the interests of Priority Mail users. MTAC meets four times a year with the Postal Service to discuss various issues of concern to mailers, such as service, mailing requirements, mechanization, and automation plans, etc. Like all other mailer organizations represented on MTAC, APMU will have two delegates. For 1995 these representatives are: Jack Sigman of Nashua Photo Inc., Treasurer of APMU, and Lori Ware, of the Amway Corporation.
Priority Mail Volume Up Sharply in FY 1994
FY 1994 was a banner year for Priority Mail. Preliminary data indicate Priority Mail volume and revenue were up sharply in fiscal year 1994, which ended September 30, despite terrible delivery performance last winter and some very bad publicity during the year. The growth rate of Priority Mail outstripped all other major subclasses. With its high profit margins, Priority Mail has become the Postal Service's "goose that lays the golden eggs." Here are the numbers.
Percent FY 1993 FY 1994 Increase Volume 664 million 763 million 14.9% Revenue $2.300 billion $2.633 billion 14.5%
The two-pound rate, $2.90, accounts for the vast majority - 80 percent - of Priority Mail volume. In 1994, only 5 percent of Priority Mail used the zoned rates applicable to pieces that weigh in excess of five pounds.
Priority Mail Directory Now Available
Priority Mail is not a universal 2-day service, as regular Priority Mail users are aware. If you want to know in advance where to expect 3-day delivery, a new Priority Mail Directory is being distributed to window clerks. This lists all three-digit ZIP origin-destination combinations which cannot be reached within two delivery days. The information is provided in the form of a table of 3- digit ZIPs. It should be available shortly from your local post office.
New 7" x 10" Priority Mail Flat-Rate Envelope
APMU is working with the Postal Service to develop new Priority Mail products. The most recent product is a 7" x 10" red, white and blue envelope designed especially for mailing small products. The new envelope is designated as a 2-pound flat-rate product, which means that anything that fits within the envelope can be mailed at the minimum 2-pound rate, regardless of weight.
Clearly Identify All Your Priority Mail
All mailers should be aware that payment of the correct Priority Mail postage does not, by itself, guarantee that a piece will be handled as Priority Mail. In addition to the correct postage, the piece must be clearly and properly identified as Priority Mail. Otherwise, it could find its way into the regular First Class mail stream, and be handled as a First Class "flat" or "IPP" (irregular parcels and pieces). In theory, all First Class mail has a 3-day delivery standard. However, actual delivery performance of First Class flats and IPPs fare much worse, on average, than either First Class letter mail or Priority Mail.
Clear identification of every piece with Priority Mail postage should be standard operating procedure. The easiest way to begin is by ordering Priority Mail supplies from the Postal Service. The price is right! All the supplies you need are available FREE. Red, white and blue envelopes, boxes, stickers, address labels and other disposable Priority Mail supplies can be obtained by dialing 1-800- 222-1811; or, if you prefer, FAX your order to 1-800-270-6233. Regular Priority Mail users may file a standing order to receive supplies monthly or quarterly, which minimizes the time and effort required to reorder supplies.
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