"New Periodicals Rates Go into Effect July 15 – What’s a Printer or Publisher to Do?

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By Gail Nickel-Kailing, Senior WTT Editor

July 16, 2007 -- The new postage rates are clearly “top of mind” for printers, publishers, and mailers. The WhatTheyThink Postal Rates and Reform Webinar broadcast on May 15 drew more than 506 registrants seeking more information to help them offset or avoid new postage rates"

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Rate and Preparation Changes
The PRC recommendation for Periodicals included many changes that reflect cost-based rating. The biggest change in the rate design is moving from the traditional pound and piece rates to bundle and container rates.

• Pound Advertising and Editorial Rates - The pound rates were reduced for both advertising and editorial rates. Editorial pound rates offer reductions for varying destination entry levels in order to promote drop-shipment of lower advertising content publications.
• Piece Rates - Piece rates include new machineable and non-machineable rates for flats. Also, the basic rate category was replaced with MxADC and ADC rate categories, similar to Standard Mail.
• Piece Discounts - With the exception of the non-advertising piece discount, the piece discounts for destination entry, all pallets and co-palletized products were eliminated.
• Container Rate - Container rates were established to replace flat rate for all pallets and sacks. The rate is based on a combination of the container type (pallet or sack), container sort level and containers point of entry.
• Bundle Rates - Bundle rates are going into effect based on the presort level of each mailing bundle.

Opportunities to Avoid Postal Increases
There are several ways publishers can mitigate – or even avoid completely – the upcoming rate increases. By participating in a number of “work share” programs, publishers can prepare mail to qualify for additional discounts and cost savings. Let’s take a look at a few terms that describe various cost-avoidance programs.

Co-binding or online co-mailing - a printer binds a publication or catalog in the same bindery line at the same time as another company’s and combines their two mailings into one. This process requires that the publications be essentially the same size and have the block for addressing in the same place.

Co-mailing or offline co-mailing - the process of merging finished publications and/or catalogs that have already been bound into one mail stream. The co-mailing process combines address files for all participants into a single mail file that is presorted before the addresses are inkjetted on the covers. Then individual finished pieces are sorted into presorted bundles for which they would not have qualified in the past. Presorted bundles receive greater USPS discounts than unsorted bundles.

Commingling – a term that also refers to the process of merging multiple strings of mail into a single mail stream. Commingling is often used to refer to letter-sized mailings while co-mailing is used for periodical or catalog mailings.

Co-palletization - consolidates the physical bundles of mail, which have already been addressed and presorted, onto pallets. Mail that has been bundled onto pallets prior to its entry into the USPS system is discounted. Mailers qualify for greater postage discounts based on both the number of pieces that previously would NOT have been on pallets and in the number of pieces that move from sacks to pallets.

Drop-shipping - saves money on postal rates by moving the mail closer to its final destination before it is deposited with the USPS. Mailers can save additional postage costs avoiding the USPS zoned structure and taking advantage of destination entry discounts; the savings more than offsets the shipping costs.

Who Can Help?
Major printers such as RR Donnelley, Quad/Graphics, Quebecor World, Banta, Fry Communications, and others offer co-mailing services to their own printing customers and will take finished periodicals from smaller printers to add to their distribution pools.

For the first time, there is now a third-party distribution company serving small to medium printers that produce short run and small circulation magazines and catalogs. This year, Print and Mailing Solutions, LLC, a division of ALG WorldWide Logistics launched an independent co-mailing service.

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Ms. Nickel-Kailing is also an author, journalist, and nationally recognized speaker regarding printing and mailing, including web-to-print, variable data printing, and direct mail. She is a magna cum laude graduate of the University of Wisconsin, Eau Claire WI. She can be reached at gail@business-strategies-etc.com.