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MANAGING COSTS

Postal-Rate Increase Could Actually Save Businesses Money

While the cost of mailing a letter will go up by two cents, rates for other categories will drop.
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While many businesses are bracing for the postal-rate increase  scheduled to take effect May 14, those that make smart use of the new pricing system could actually see their costs reduced.
 
The new postal rates contain hidden surprises  -- and therein lies the opportunity for business owners. While the cost of mailing a first-class letter weighing one ounce will increase by two cents, to 41 cents total, rates for other categories actually will be reduced, according to the U.S. Postal Service.

Letters weighing up to two ounces will drop to 58 cents -- five cents less than the 63 cents they currently cost. Businesses that reduce the frequency of their mailers by combining them stand to gain. A small business mailing 5,000 such letters would save $250 more than what it would have saved before the rate drop.

Businesses often send letters in unwieldy shapes and sizes in an effort to get noticed in a pile of junk mail. However, it is more expensive  for the USPS to process these pieces of mail. A two-ounce large envelope will now cost 97 cents to send, which is a 53 percent increase from the earlier 63 cents. A possible solution for businesses? Reconfigure the mailing to a standard envelope size and pay just 58 cents to post it.

Undelivered mail also costs the USPS money to reroute and deliver to the new address or back to the sender -- almost $2 billion a year. To counter the cost, the USPS has proposed penalizing bulk mailers with inaccurate databases, by reducing their bulk discounts.

For international mail, the USPS will now offer only four types of service -- Global Express Guaranteed, Express Mail International, Priority Mail International, First-Class Mail International -- instead of the current eight categories. The average price increase for letters sent overseas will be 13 percent.

Last updated: Apr 10, 2007




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