Sizing mail to save
Berkshire Life is busy these days examining the size of the envelopes it sends through the U.S. Postal Service to customers and vendors.
If the insurance company, with its nationwide clientele, doesn't make some changes soon, its annual postage costs nearly half a million dollars already could go up by as much as 40 percent in May.
Massachusetts College of Liberal Arts in North Adams is redesigning its mailers and changing envelopes to prevent its annual postage cost from exceeding $200,000.
From colleges such as MCLA to insurance companies such as Berkshire Life, businesses are bracing for a new U.S. Postal Service rate change that increases the cost of postage for envelopes that do not fit
through its automated sorting machines. If they are not careful about the size of the envelopes they mail, it could add 30 to 40 percent to their mailing budgets.
"When you mail thousands of pieces every month, paying attention to shape and size of the envelope will make a difference to your bottom line," said Roger Parent, Pittsfield's postmaster.
The dimensions of the mailing "will matter more than it ever has before," he added.
Could be effective May 6
The new rates are expected to be ratified by the U.S. Postal Service Board of Governors in early April and to go into effect on Sunday, May 6. The proposal makes the size of the envelope more important than its weight when it comes to cost.
Companies that routinely send out bulk mailings will have to reconsider how they mail bills, and send out direct mail and any other written communications through the mail.
Private citizens will adhere to the new pricing system, too, whether it's a greeting to your grandmother in Grand Rapids or a missive to your missus in Mississippi.
Since manual sorting is labor-intensive and expensive, the new plan is a cost-saving strategy for the U.S. Postal Service. For the fiscal year ending Sept. 30, 2006, the Postal Service delivered more than 213 billion pieces of mail, a 0.7 percent increase from the previous year. The service reports it delivers more than 700 million pieces of mail bills, cards, ads, etc. every day.
To streamline its mail-sorting system, the U.S. Postal Service is promoting the use of envelopes that weigh no more than 1 ounce and that are no larger than 6-1/8 inches tall, 11-1/2 inches wide and 1/4-inch thick, which are compatible with its automated sorting systems. By making them the most cost-effective pieces of mail to send, it steers the Postal Service's largest customers to use those envelopes.
However, the change also affects smaller customers and nonprofits that depend on direct-mail marketing.
David Staples, general manager of Zip 'N Sort Mailing Service in Pittsfield, which contracts with the Postal Service to sort mail, and who is a member of the Western Massachusetts Postal Customer Commission, calls it a "fundamental change that affects all the mail."
"And the more all of us know about this, the more we can work together. In fact, the post office is just saying, 'Let's cooperate.' "
"(Sorting) machines hate anything that's square," Staples said.
The best deal is to use the "letter" category: Envelopes providing they weigh no more than one ounce and the dimensions are no larger than 6-1/8 inches tall, 11-1/2 inches wide, and 1/4 inch thick will cost 41 cents apiece under the proposed rate. The current cost to mail that letter is 39 cents.
For every additional ounce of weight, the letter will cost an additional 20 cents up to the maximum 4 ounces. Incidentally, the 3- and 4-ounce letters, within the letter shape, will actually be less expensive to mail; the current cost is 87 cents and $1.11, respectively. The proposed rate for a 3-ounce letter is 82 cents, and $1.02 for the 4-ounce.
Envelopes larger than the dimensions of a "letter" will be known as a "flat," and will cost 20 cents more per ounce. But if the dimensions are adhered to, postage costs will actually go down as the piece gets heavier. A 2-ounce "letter" dimension will cost 62 cents, whereas it now costs 63 cents. But a 2-ounce "flat" that now costs 63 cents will go up to 82 cents.
"What people can't do, and what they've been so used to, is taking anything of any shape and size and throwing it into the mail," Staples said. "It's going to take a long time to adjust."
Mail of any size and shape will still be delivered, but it will cost more.
"This will affect designers, marketers and printers the most," he said.
Staples visited Massachusetts College of Liberal Arts to help officials there understand how to duck the bulk of the postage increases.
"We're taking the time to train our personnel to understand how to make the most effective use of publications and still reach our audience effectively," said Gerald F. Desmarais, the college's treasurer.
Desmarais said the college is re-evaluating its use of catalogs, fliers, postcards and the Internet.
"We do have to re-evaluate everything that we're doing," he said, noting that the college mails out several million pieces every year, much of it to students and prospective students. Its annual postage budget is roughly $170,000.
"As the price goes up, that budget will get closer to $200,000," Desmarais said. "And if we're not paying attention, it could easily go well over $200,000."
Ruth Healy, business services manager at Berkshire Life, the insurance company, said her team is also looking at ways to minimize the economic impact of envelope sizes.
"It's going to have an impact," she said. "We're still evaluating what it's going to do to us. It will necessitate some changes. We've already started some redesigning."
For instance, she said, the cost of mailing a 9-by-12-inch envelope will almost double, but folding the piece in half to get it into a 6-by-9-inch envelope will be much cheaper.
As Berkshire Life switches the sizes of its envelopes, the company will also have to reprogram its printing software to make sure the mailing address still appears in the envelope window.
"If we don't make any changes, our cost will go up about 30 percent," Healy said. "If we do make changes, the increase will be 8 to 10 percent."
She noted that Berkshire Life's postage budget is roughly $425,000 per year, and the company mails about 80,000 pieces every month.
"It has already added to the workload," Healy added. "We've put in several hours going over the envelopes and going to our venders to order new sizes."
The Postal Service is so confident the rate increases will take effect in May, it is training employees and the public to adapt to the new pricing system.
Meanwhile, postage meter vendors such as Pitney Bowes are shipping new software and hardware for their meters that measure the envelope's dimensions as well as its weight to determine the correct postage under the new system.
Still under discussion are the postage rates for CDs, DVDs, prescription pills and odd-shaped direct-mail marketing packaging, all of which are a growing part of the mail stream.
Staples, the postage expert, points out there is an upside to the changes.
"Businesses can save on inventory when they realize all they really need is three envelope sizes Number 9, Number 10 and 6-by-9 inch," Staples said.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.