Earlier this year, the United States Postal Service® (USPS) raised First-Class Mail prices by approximately 6.5%, lower than the Bureau of Labor Statistics annual inflation rate of 7.9% as of the end of February.
Later, in August, USPS announced temporary holiday rate hikes for key mailpieces, in effect now, through January 21, 2023. On October 7, the USPS filed notice with the Postal Regulatory Commission (PRC) of additional price changes to take effect January 22, 2023. Already approved by the Governors of the U.S. Postal Service, if favorably reviewed by the PRC, First-Class Mail prices will increase by another 4.2%.
Here, we’re sharing ways mailers can offset these costs, which play into a long-term USPS plan.
USPS Postage Rates Through the Years
Throughout its history, USPS postage rates have increased to support evolving USPS operating costs. But in recent years, the USPS’ financial health has become a more public issue. Its current financial state is in part due to the requirement that the USPS pre-fund health benefits for current and retiring employees. Passed by Congress in 2006, the requirement did not apply to any other federal agency or private corporation.
Together, the Reform Act and the 10-year Delivering for America plan is intended to help the USPS achieve financial stability. Additionally, in 2021, the Postal Service announced their plans to increase postal rates twice a year beginning in 2023. This has been met with some resistance from the mailing community.
Cost-Saving Strategies to Combat Rising Postage Rates
So, what does this mean for mailers and marketers? Similar to the USPS, you’ll need to take a hard look at your processes. Be pragmatic regarding what and to whom you mail, and consider some of these cost-saving strategies:
- Make sure your mailing list is up to date (including no duplications).
- Consider targeted mailings to high-value recipients who are most likely to respond.
- Capture your recipient’s attention by including a clear message or offer on your mailpiece that is more likely to boost ROI.
- Evaluate mail piece specs and materials. Size and weight impact postage, and supply chain issues have made some papers unavailable. Make sure you aren’t incurring additional costs using new or unnecessary materials.
- Take advantage of USPS Promotions that provide cost savings by utilizing select products and services.
- If you are mailing catalogs, adopting a co-mailing procedure can deliver savings, but be sure the positives outweigh potential negatives.
Despite postage increases, mailers have a lot of cost-saving options. Contact us today to learn more.
About Tension Corporation
Tension Corporation is a global leader in envelope products, packaging and packaging automation solutions. It is a privately held and operated, international company based in Kansas City, Mo. Tension manufactures billions of envelopes annually and their envelope division serves a variety of industries, including financial, insurance and direct marketing, plus they work directly with third-party providers. The packaging and automation division of Tension provides software, consumables, automation and service and support for fulfillment to the e-commerce and pharmaceutical industries