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May 2007- New Postage Rates Effective May 14, 2007

As you’ve likely heard, the U.S. Postal Service has unveiled comprehensive changes in the latest rate case, effective May 14, 2007.  Depending on the class and format of your mail, the new rates and surcharges can have a significant impact on your postage costs. While the myriad changes and rates are too numerous to detail here, Data Solutions would like to make you aware of the following trends:

Shape-Based Pricing
Traditionally, postage has been calculated based on the weight of the piece within each postal class. For example, under the current rate case, a 2-ounce letter, 2-ounce flat and 2-ounce parcel sent first-class carry the same postage, $0.63, despite the range of shapes and sizes for these pieces.

The new postage guidelines price mail pieces based on their shape. Postage for a 2-ounce first-class letter has dropped from $0.63 to $0.58; however, a 2-ounce flat now costs $0.97, while the rate for a first-class 2-ounce parcel has more than doubled to $1.30. This is due to a reduction in the charge for each additional ounce of $0.17, down from the previous $0.24.

Pieces qualifying for automation discounts receive similar consideration; each ounce for compatible pieces increases postage by $0.125, down from $0.237. Below are the new automation rates for letters based on the four levels of compatibility.

First Class – Single-Piece Rate

Weight Letters Flats Parcels
1 oz. $0.41 $0.80 $1.13
2 oz. $0.58 $0.97 $1.30
Postcards - $0.26      

First Class Letters - Automation

Weight 5-Digit 3-Digit AADC Mixed AADC
1 oz. $0.312 $0.334 $0.341 $0.360
2 oz. $0.437 $0.459 $0.466 $0.485

Standard Mail Regular Letters - Automation

Weight 5-Digit 3-Digit& AADC Mixed AADC
3.3 oz. or less $0.218 $0.233 $0.238 $0.252

Standard Mail Nonprofit Letters - Automation

Weight 5-Digit 3-Digit AADC Mixed AADC
3.3 oz. or less $0.127 $0.142 $0.147 $0.161

Stiffer Non-Machinable Penalty
The new postage rates make it clear the Postal Service is rewarding automation-compatible mail. First-class letters and cards that weigh one ounce or less and meet one or more nonmachinable characteristics are subject to a $0.17 surcharge, a hefty increase over the previous $0.04 nonmachinable penalty.

Stringent Address Verification
As of August 1st, all databases used for automation-compatible mailings will need to undergo additional verification prior to mailing. The Delivery Point Validation (DPV) system compares each record in a database against a USPS database of deliverable addresses. As an extension of CASS-certified ZIP +4 software, DPV will be required in order to retain ZIP +4 automation discounts.

These are just a few of the many changes introduced by the new postal rate case. For a comprehensive look at the new rate case, visit www.usps.com/ratecase.

The Data Solutions Advantage
With the knowledgeable data processing and mailing professionals at Data Solutions at your side, we can help you minimize the impact of rate changes on current and future campaigns. For example, our refolding capabilities can help you take advantage of lower rates for saddle stitched products. We can even perform inkjetting and tabbing inline, giving you an efficient production solution. Call the experts at Data Solutions today to discuss how we can optimize current and upcoming campaigns for today’s direct mail landscape.

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