New Prices New Flexibility New Opportunities May 12, 2008
Agenda § § Postal Act of 2006 Mailing Services Shipping Services Resources New Prices – May 12, 2008
Postal Act of 2006 § Two categories: Mailing Services with a cap ► Shipping Services with a floor ► § § Flexibility Predictability Choices Speed-to-market New Prices – May 12, 2008
Mailing Services § § § First-Class Mail (includes First-Class Mail International) Standard Mail Special Services Periodicals Package Services New Prices – Mailing Services – May 12, 2008
Mailing Services § § § Consumer Price Index (CPI) cap 2. 9% average increase by class Annual, predictable price changes 45 -day notice required 90 -day commitment New Prices – Mailing Services – May 12, 2008
First-Class Mail § $38 billion revenue § Average +2. 89% Product % Change Single-Piece Letters & Cards 2. 50 Presort Letters & Cards 3. 55 Flats 1. 93 Parcels 2. 18 International 3. 09 New Prices – Mailing Services – May 12, 2008
First-Class Mail – Single-Piece § Letter: 42¢ (+1¢) § Forever Stamp ► Plenty of stamps on hand § No more nondenominated transition stamps New Prices – Mailing Services – May 12, 2008
First-Class Mail – Single-Piece § Additional ounce: 17¢ (unchanged) § Nonmachinable surcharge: 20¢ (+3¢) ► New 62¢ stamp for 1 -ounce square envelopes such as greeting cards § Postcard: 27¢ (+1¢) New Prices – Mailing Services – May 12, 2008
First-Class Mail – Automation & Presort Letters § Promote efficient preparation § Maintain strong 2. 2¢ incentive for 5 -digit § Presort letters additional ounce same price as for auto: 12. 5¢ (- 4. 5¢) New Prices – Mailing Services – May 12, 2008
First-Class Mail International § Align with domestic ► Shape-based pricing 1 ounce to Canada/Mexico 2007 New Change Letter 69¢ 72¢ +3¢ Flat 69¢ 98¢ +29¢ Package 69¢ $1. 18 +49¢ § Nonmachinable letter surcharge: 20¢ § Align country grouping with other international products New Prices – Mailing Services – May 12, 2008
Standard Mail § $21 billion revenue § Average +2. 84% Product % Change Letters 3. 31 Flats 0. 86 Parcels and NFMs 9. 66 High Density / Saturation Letters 1. 66 High Density / Saturation Flats and Parcels 2. 09 Carrier Route Basic Letters, Flats, and Parcels 2. 99 New Prices – Mailing Services – May 12, 2008
Standard Mail Flats (catalogs) § Price increase well below average Examples (5 -digit/DBMC) 2007 New Change 3 -oz Catalog 30. 2¢ 30. 6¢ +0. 4¢ 4 -oz Catalog 35. 8¢ 35. 9¢ +0. 1¢ 5 -oz Catalog 39. 4¢ 0. 0¢ 8 -oz Catalog 47. 6¢ 47. 5¢ -0. 1¢ New Prices – Mailing Services – May 12, 2008
Standard Mail Flats § Lower pound prices for saturation and high-density flats Examples (Saturation at DDU) 2007 New Change 3 -oz Catalog 13. 6¢ 14. 0¢ +0. 4¢ 4 -oz Catalog 15. 2¢ 15. 5¢ +0. 3¢ 5 -oz Catalog 17. 6¢ 17. 7¢ +0. 1¢ 8 -oz Catalog 24. 6¢ 24. 4¢ -0. 2¢ New Prices – Mailing Services – May 12, 2008
Periodicals § $2. 2 billion revenue § Average +2. 72% Product % Change Outside-County 2. 71 In-County 2. 63 § Allow recent changes to settle in and work on efficiency § New, limited-circulation pricing New Prices – Mailing Services – May 12, 2008
Package Services § $1. 8 billion revenue § Average +2. 88% Product % Change Parcel Post 3. 30 BPM Flats 0. 47 BPM Parcels 2. 10 Media Mail and Library Mail 4. 54 New Prices – Mailing Services – May 12, 2008
Special Services § $2. 7 billion revenue § Average +2. 85% Product % Change Post Office Boxes 2. 89 Certified Mail 1. 89 All others 3. 29 § § Certified Mail: $2. 70 (+5¢) Return Receipt: $2. 20 (+5¢) Annual Mailing Fees: $180 (+$5) Delivery Confirmation: no change New Prices – Mailing Services – May 12, 2008
Shipping Services § § § Greater pricing freedom and flexibility No price cap Each product and contract must cover cost Must cover 5. 5% of Postal Service overhead 30 -day notice required 60 -day commitment New Prices – Shipping Services – May 12, 2008 17
Shipping Services § § § Priority Mail International Express Mail Parcel Select Parcel Return Service New Prices – Shipping Services – May 12, 2008 18
New Price Structures and Incentives Price Lists § Retail prices § Commercial base prices § Commercial volume prices Negotiated pricing § Commercial contract prices New Prices – Shipping Services – May 12, 2008 19
Express Mail § Average +3% § Sunday and holiday premium: $12. 50 (introduced March 3) § Zoned pricing with competitive local pricing Retail Prices New Weight 2007 Zones L, 1 & 2 Zone 3 Flat-Rate Envelope $16. 25 $16. 50 1/2 lb. $16. 25 $12. 60 $14. 65 3 lb. $24. 50 $16. 65 $21. 35 10 lb. $45. 25 $28. 60 $38. 10 § Rename Post Office-to-Post Office as “Hold For Pickup” New Prices – Shipping Services – May 12, 2008 20
Express Mail Commercial base prices § 3% lower than Retail for Express Mail Corporate Accounts (EMCA), Click-N-Ship, and PC Postage New Prices – Shipping Services – May 12, 2008 21
Express Mail Commercial volume prices § EMCA and PC Postage Minimum Quarterly Volume Additional % (postal quarterly rebate) Total % off retail 125 2% 5% 438 4. 5% 7. 5% 938 7% 10% New Prices – Shipping Services – May 12, 2008 22
Priority Mail § Average +6% § New large Flat-Rate box (introduced March 3) ► Lower price for APO/FPO addresses New Prices – Shipping Services – May 12, 2008 23
Priority Mail Commercial base prices § Lower than retail for Click-N-Ship, PC Postage, and permit imprint New Prices – Shipping Services – May 12, 2008 24
Priority Mail Price examples Flat-Rate 2007 Retail Commercial Envelope $4. 60 $4. 80 $4. 75 Box (regular) $8. 95 $9. 80 $9. 30 $12. 95 $12. 50 $10. 95 $10. 50 Box (large) (introduced March) Box (large) APO/FPO (introduced March 3) New Prices – Shipping Services – May 12, 2008 25
Parcel Select § § Last-mile commercial service Average +5. 7% Promote destination delivery unit (DDU) Commercial volume prices for DDU Based on new growth above a threshold ► Annual rebates ► New Prices – Shipping Services – May 12, 2008 26
Parcel Return Service § First-mile commercial service § Average +2% § Align pricing with outbound DDU ► Weight-based pricing New Prices – Shipping Services – May 12, 2008 27
Global Express Guaranteed § Average +5. 2% Retail price examples 2007 New Change 1/2 lb. $37. 00 $38. 95 $1. 95 5 lbs. $77. 00 $82. 00 $5. 00 § Expedited date-certain delivery with money-back guarantee to over 190 countries § Commercial base prices ► 10% lower than retail for Click-N-Ship and PC Postage New Prices – Shipping Services – May 12, 2008 28
Express Mail International § Average +6% Retail price examples 2007 New Change 1/2 lb. , Flat-Rate Envelope $25. 00 $25. 95 95¢ 5 lbs. $44. 00 $45. 50 $1. 50 § Date-certain delivery with money-back guarantee for packages sent to Pacific Rim countries New Prices – Shipping Services – May 12, 2008 29
Express Mail International § Commercial base prices ► 8% lower than retail for Click-N-Ship, PC Postage, Global Shipping Software (GSS), and Express Mail Corporate Account (EMCA) New Prices – Shipping Services – May 12, 2008 30
Express Mail International § Commercial volume prices ► Express Mail Corporate Account Commercial Base Price Incentive Commercial Volume Price Incentive Annual Volume Annual Postage No minimum 1, 000– 2, 999 pieces $20, 000–$59, 999 10% 3, 000 pieces and above $60, 000 and above 12% New Prices – Shipping Services – May 12, 2008 8% 31
Priority Mail International § Average +6. 1% Retail price examples 2007 New Change Flat-Rate Envelope $11. 00 $11. 95 95¢ 5 lbs. $38. 00 $40. 50 $2. 50 Flat-Rate Box (regular) $37. 00 $38. 95 $1. 95 § New large Flat-Rate box (introduced March 3) New Prices – Shipping Services – May 12, 2008 32
Priority Mail International § Commercial base prices ► 5% lower than retail for Click-N-Ship, PC Postage, and permit imprint New Prices – Shipping Services – May 12, 2008 33
International Priority Airmail (IPA) and International Surface Airlift (ISAL) § Average price increase ► ► IPA: 12. 5% ISAL: 21. 3% § Continue published prices for full-service and drop ship § Eliminate published ISAL prices for Direct Shipment ► Now, available through customized agreement New Prices – Shipping Services – May 12, 2008 34
Resources § USPS. com/prices ► ► ► Mailing Services and Shipping Services highlights New price lists Downloadable price files New Postage Statements Federal Register notices New Prices – May 12, 2008 35
Resources § Postal Explorer (pe. usps. com) § PCC Insider – PCC e-newsletter (pccinsider@usps. gov) § DMM Advisory – customer e-newsletter (dmmadvisory@usps. com) § P&C Weekly – employee e-newsletter (Pand. CWeekly@usps. gov) § Mail. Pro – late April (usps. com/mailpro) New Prices – May 12, 2008 36
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