Shape Based Postage Pricing

From Wikipedia, the free encyclopedia

1 Introduction
2 Current vs. Proposed Rates
3 Shape-Based Pricing
4 See Also

[edit] Introduction

On May 14th 2007, the United States Postal Service (USPS) is implementing a rate and structure change to combat rising processing costs. In addition to increasing their current postage rates, the USPS will unveil a major structure change to the way postage values are determined for mail pieces. This alteration represents a significant shift in USPS policy and contains far ranging implications for the mailing industry. The anticipated cost determination change is being termed Shape-Based Pricing.

[edit] Current vs. Proposed Rates

Currently, the USPS primarily uses a weight-based method to determine postage costs for letters, flats or parcels. With rising mail processing costs and a desire to encourage customers to prepare mail in ways that increase efficiency for their processing capabilities, the USPS has assessed their operation, identifying the items that both add and reduce costs, and have built their Shaped-Based Pricing structure accordingly, thereby introducing a rate change for different mail types and classes.

[edit] Shape-Based Pricing

Instead of using an item’s weight as the primary factor to establish shipping costs, a size, thickness and weight combination will now become the standard. Essentially, mail items that are easier for the USPS to process will be rated lower than items that are not. Because of their shape differences, letters, flats and parcels will now all be priced differently because each is handled and processed differently. The proposed Shape-Based Pricing structure will significantly increase postage costs for various types of mailing applications. It also means there are going to be changes to how mail is processed.

Shape-Based Pricing is a form of dimensional weight. It promotes the use of easily sorted postal flats as well as high-density packages. On the other hand, it penalizes shippers of larger, lightweight packages.

The effects of Shape-Based Pricing will impact all mailers to one degree or another. Just how much will be determined by the type and volume of mail pieces sent. Small volume mailers will need to manually measure the size and thickness of their letters and flats to ensure proper postage is applied. Mid- to high-volume mailers will need to utilize some form of automation to help apply proper postage and keep the mail stream efficiently flowing. The bottom line is that all mailers will now need to be conscious of the size, thickness and weight of their mail pieces if they expect to save money and maintain productivity under the new structure.