Events surrounding the 2017 National Postal Forum #2017NPF

The 2017 National Postal Forum continues to it's conclusion today as the world outside follows it's own agenda.  The Manchester terrorism.  Trump's foreign travel.  Also, here, not 31 miles from Baltimore, in College Park, Maryland, a newly commissioned 2nd Lieutenant was stabbed to death in what appears to be a relatively random, violent, hate and alchohol inspired murder.  The randomness, aside from one criteria, race, is most disturbing.  This was a victim, pure of character, done in by ideologic hatred fueled by booze.  While the brunt is born by the victim, I am hopefull a greater good is served.  If you judge a man by his character, join me in this outrage by dedicating your energy in a positive way toward an inclusive future.  You need not abandon your standards. Poor character and behavior are just that, regardless.  But do not generalize about people, good people, on anything but their demonstrated behavior. You will find many new friends.  You will also find an intolerance for bad people among your own ilk.  It's hard.  You can do it.  It is the only way.  RIP Richard Collins III.

Notes on the USPS exigent postage rate decision

Chronology of the USPS exigent (meaning extraordinary) postage rate case due to the 2006-2008 "great recession"...

July 2010, USPS files for a +5.6% postage increase

Sept 2010 Postal Regulatory Commission's (PRC) denial

Oct 2010 USPS files Federal Court Appeal

May 2011 Court remands to PRC to establish quantifiable loss criteria

Sept 2011 PRC directs USPS to support their rate claim (i.e. amount due to recession instead of diversion of mail to electronic communication, for example).

2 year lapse (A response back to the PRC is held in the Postmaster General's back pocket awaiting reform legislation that never happens).

Sept 2013, USPS files for $4.3% increase (Why +4.3%?  Just feels right).

Dec 2013 PRC grants 4.3% increase for only about 2 yrs., then reverses (est. ending Sept 2015).

Apr 2014 USPS files Federal Court Appeal asking for +4.3% baked-in (forever rate)

June 2015 Appeals Court remands to PRC; upholds rate limit but revises "count once" effect of mail revenue loss to bump out another $1.2 B (the value according to the USPS).

We now await determination from the PRC if the 4.3% exigent rate will continue past Sept 2015 until the additional $1.2 B is collected.

Final take:  The USPS focused too much on "we need money" pressure to push through an exigent increase in hopes of striking it big, without properly defining (or in their opinion limiting) how much they were actually due.   This strategy never really worked; although it did eventually bring $4.4 B in revenue over about 3 years, 8 to 10 years after the exigent loss.  The good news is that while struggling financially during this process, the USPS accelerated their network contraction and personnel attrition to match infrastructure to demand.  That process continues.

USPS Magazine Weight Verification

We will skip the buzzword “seamless acceptance” because nothing is more frustrating than speaking in code; yet now I sense you pleading, begging to know what this term means, intuitively knowing you will be forced some day to comply or forfeit your first born.

Seamless acceptance is designed to streamline and automate the hand off or induction of business mail (and nonprofit periodicals mail) for verification, payment and induction into the USPS mail stream. Let’s agree to think of it as paperwork reduction except for the actual mail itself (let’s not go crazy after all.)

Usually, a printer's employee alongside a domiciled postal employee eyes print samples for weight verification, four eyes at once, as magazines come off the print run.  Other in-plant methods exist, for example, using the weight of laden pallets minus the tare weight, but let’s stick with the eyeballing small samples example.

Weight is a critical matter in calculating postage.

So too are eyeballs viewing a scale, but the USPS wants to remove their domiciled employees, permanently assigned to a printers plant, and check magazine weights another way, far, far away, by adding this task to the responsibility of plant employees at USPS plants around the country. After all, everything is now connected by computerized accounts, so remote verification is not that difficult.

Verification means confirmation of an original measure, something the printer’s employee will now do alone to determine the postage payment just before magazine are loaded onto pallets and the trucks start rolling.

What will be so difficult when magazine weights are verified in far-flung places? Humidity. Minor variations in trim size. These add up when trying to verify postage for a 100,000 run magazine based on, say, twenty copies weighed in different places. Small measurement variations can amount to big postage when multiplied by 100K.     

That is why this topic came up at the USPS' Mailers Technical Advisory Committee this week. Printers all but stood in line to express how difficult this is going to be, and ask what weight tolerances the USPS will allow. No one, after all, wants to make a stab at claiming the correct postage only to be called out later for a deficiency. Apparently issue weights are a moving target.

So, printers were solicited to participate in a test called, “How much does a magazine mailed from Mid-America weigh in Miami vs. Phoenix?” I bet you are thinking, “Why can’t this just be done in a lab under scientific conditions?” Wise you are. All you would need is a humidifier and a vaporizer.

Most printers define the discussion as how much of a tolerance will the USPS give them on magazine weight verification, and therefor correct postage.  Some argue for certification, i.e. if a printer shows you they can produce the correct weight and postage x times in a row (I’m making this up), give them a pass on any future measured variations.  (I don’t know how well this meets Sarbanes-Oxley).

I see it another way.  Why not have the printer’s employee determine the actual weight. Use that weight, calculated to four decimal points of a pound. Save these copies for the period during which those magazines are in the mail stream and subject to dispersed USPS verification. If the USPS determines there is a weight variation resulting in a postage deficiency (however they reach this conclusion), the printer may produce the primary sample used and together, with the USPS, the original measurement is confirmed or denied. If confirmed, all dispersed measurements become irrelevant, unless differences in product can be determined (inclusion\exclusion of blow-in cards, version differences, etc.) Printers should probably sample various ends of the print run and average them, saving all samples. This way it doesn't matter if humidity-soaked measurements are made elsewhere around the country. What counts is that the original measurement is reproducible. This saves printers of good will from suffering postage deficiencies due to measured sample variation, especially outliers which naturally occur.

Or we can run around like chickens with our heads cut off, worrying about paying more postage if caught with magazine weights over 2 standard deviations as measured in Miami.

  

Step forward or step back?

A recent letter from Ian Volner on behalf of PostCom to Mary Anne Gibbons of the USPS questions why the they are interested in explicitly identifying the "mail owner" as we embark on the new Intelligent Mail barcode.  I'm with him, as so many of us mail owners have expert mail service provider (MSP) representation to keep the postal minutiae at bay.  After all, mail owners are in "their" business, not the "mailing business."

That's the rock.  The hard place is where small business and nonprofit mail owners (SBNO's) get kicked out of automation rates.   I say "kicked-out" because to keep automation discounts SBNO's must  become their own MSP at best, or pay more to a MSP to create an Intelligent Mail barcode (IMb) at worst.  The USPS developed an online small business presort tool called "IMsb," but this amounts to the mailer becoming their own MSP without paying for software. (Your welcome, mail software suppliers and MSP's.)

This IMb barcode does nothing more for SBNO's.  Nothing more than the soon-to-be extinct PostNet barcode anyway, which was so conveniently included in every copy of Microsoft Word.

The USPS will say the IMb does great things for the mail owner.  For SBNO's it does nothing.  SBNO's for the most part do not want tracking, they just want reliable service.  Service performance is the USPS' internal responsibility, not the SBNO's.

Destination barcoding used to be the technical benchmark for automation rates.  No longer.  All those SBNO's who leveraged up to automation rates with manual preparation just hit one of two walls, either computerized mail presorting or down-grading to "machinable" mail.  Machinable mail is just naked automation mail without the barcode.

Imagine that!  Small mailers who use to manually prepare their mail for automation now have two choices; become very much more, or very much less sophisticated.

I question how many SBNO's will go the more sophisticated route, or will they choose to pay slightly higher rates instead?  Why is there no better solution for SBNO's to maintain automation rates, such as a fixed-coded IMb with simple destination coding (i.e. ZIP barcoding)?

The availablility of the IMsb tool is not the same thing as a solution for SBNO's.  In time the numbers will tell the story of SBNO's who do not show up in IMb full-service scans.  And who will care that an increasing portion of "machinable" volume will be slowed by an added OCR step within USPS processing plants?  (Hint: I will).          

Just how intelligent does nonprofit and small business mail need be?

Just how intelligent does nonprofit and small business mail need be?

  The Intelligent Mail barcode (IMb) deadline looms; January 28, 2013. PostNet is dead. In 2014, the IMb surges to  "Full Service," meaning each piece of mail has a unique sequence code for tracking as it enters the post office; ...across each sorter, dock, facility, mode of transport, etc.  With volumes of business mail already using the IMb-Full Service, must we ALL adopt it?  The USPS can already see data indicating weak points in processing and hand-offs. At what point does more data help the plant manager in Chicago know if s/he takes an eye off of operations for one day performance drops?

  So here we are. Perfect is the enemy of good.  The USPS would like business mailers (including small nonprofits and small business) to gear-up for IMb Full Service. 

  What's that entail?  Well, pre-January 28, 2013, it meant small nonprofit and small businesses that (1) know how to produce a mail-merge using PostNet  in MS Word, (2) manually sort their mail into 5-digit, 3-digit and ADC breaks, (3) use local tray tags from USPS Business Mail Entry and (4) know how to fill out a mailing statement ...qualify for very low-low postage called the "automation" rate.

  No more after January 28, 2013. REALLY no more after the IMb Full Service requirement becomes the minimum for automation rates in 2014. Manual mail preparation for small mailers looking for the lowest  postage just got more complex. This is the baggage added: the IMb encodes mail preparation references like mailing class, not just the destination information (ZIP code). It also encodes tray tags with mailer identification. Plus, a sequence number which cannot be re-used for 45 days. Finally, data for each mailing must be entered electronically via the postal web site.

  This alone is not really much to complain about. Those wanting the lowest postage in 2013 can jump through hoops to keep it. Those that don't can mail using the "machinable" rate. It is not much more than automation and does not require the IMb. For now I should say, not much more NOW; about $8 per thousand.

  How much might the difference grow to in 2015? 2016? After all, each of these "machinable" mail pieces will probably go through scanners to read the address and print a barcode, a simple extra step. Will it be an IMb barcode? Will it identify the class of mail? The mail owner? Probably not. most likely it will be a PostNet barcode sprayed merely  to speed mail on its way. Not much of a retirement for PostNet, really.
How many small "automation" nonprofits manually preparing their mail will understand the switch to "machinable?" "Barcode your mail" has been the mantra for years. Is the USPS explaining this to small mailers? No. The mantra these days is "Intelligent Mail." In fact, small "automation" mailers may swallow hard and take a huge leap. Not to full service but to full rate, and begin affixing stamps.

  This would be a huge disservice to small mailers. In the USPS' push to meet the delivery reporting required by the Postal Accountability and Enhancement Act of 2006 small mailers will be left to fend for themselves.

  These mailers are not looking forward to an easy-to-mail future. Quite the opposite.

  Yes, the USPS has released a file-upload tool for mailers under 5,000 names.  Not only do they deliver, the USPS is now your new software provider. The "IMsb" tool ("sb" for small business) will achieve every requirement of the IMb full service. That's great if small mailers appreciate making all the specification decisions computerized presorters do.

  Why must all small volume nonprofit mailer make this choice? To make the USPS better at THEIR job? How many will not invest the time and effort to follow the path to the IMb full service and yet still find they cannot survive without mailing?

  The answer is simple. Small volume mailers, nonprofits and small businesses alike should be able to produce a generic Intelligent Mail barcode that merely identifies the mail class and ZIP code. It should be incorporated into generally available word processing software such as PostNet was. It should receive "machinable" rates that do NOT drastically escalate over time because no extra steps are required by the USPS. And we should all go back to paying attention to our business plan or our mission, not grinding teeth over how to save pennies on postage. 

Adding Advertising to your Nonprofit Newsletter

  Regular (commercial) Standard Mail is sometimes referred to as “Bulk Mail” and “Advertising Mail.   Nonprofit Standard Mail is used by nonprofit organizations to communicate, educate and to raise funds for charity.  Nonprofit Standard Mail advertising must be “substantially related” to the nonprofit’s primary purpose, for example a church selling bibles.   Nonprofits can also mail unrelated low cost items (under $9.70) or gifted or donated items  (This amount is determined by the IRS and tends to change slightly higher every year.)
 
  There is a legal exception allowing unrelated general commercial advertising in Nonprofit Standard mail newsletters (or bulletins).   If the newsletter has characteristics of a periodical, it may carry general advertising (except “T-I-F” ads, explained below).   These are determined by the content requirements of a periodical (note: not the same as the actual Periodicals Class of mail).

Content Requirements of a Periodical:
 
  Have a Title
  Published at regular intervals at least 4X per year
  Formed of printed sheets
  Consist of at least 25% editorial or non-advertising (with a maximum of 75% advertising)
  Have and identification statement including…
     a) Publication title (may appear on the cover instead)
     b) Issue date (may appear on the cover instead)
     c) A statement of frequency
     d) Issue Number (consecutive in a series)
     e) Subscription price, if applicable (optional)
     f) Name & address of known office of publication

  It is not difficult to upgrade your nonprofit newsletter or bulletin to meet these requirements. Your local U.S. Postal Service Business Mail Acceptance (or Business Mail Entry) staff can help.

  Some newsletters carry paid “sponsor” listings instead of regular advertising.   These are allowable, even with the sponsor’s business logo, without the content requirements mentioned above.   However, if the listing includes contact information like mailing address, phone number or email, then it is an ad, regardless of the size or format, assuming there is financial support related to the listing.   If the sponsor’s contact information is included, the newsletter must meet the content requirements described above.

  In general, advertising may be placed anywhere in the newsletter, excluding the labeling and title areas.  The back cover of a newsletter can be used, even if in full exposed view when delivered.   Ad size is not restricted except by the dimensions of the newsletter.   

  Standard Mailings (nonprofit or regular) must have a minimum of 200 pieces of mail.  They have to at least be manually sorted and entered at the Business Mail Entry desk of the local Post Office.   Postage is paid by permit requiring a $185 annual fee.   An indicia is pre-printed and boxed in the upper right of the envelope with the words: “NONPROFIT ORG., U.S. POSTAGE PAID, (NAME OF TOWN & STATE ABBR.), (PERMIT NUMBER).”   The mailing permit is just an accounting system to pay postage.  Some nonprofits use their printer’s permit.  A separate “nonprofit authorization” is required to establish eligibility to use the nonprofit rates.  To apply, ask for USPS form 3624. The authorization is continuous if used at least once every two years, if your nonprofit status with the IRS does not change.

  If the nonprofit chooses not to exercise the right to use Nonprofit Standard Mail rates, it can always mail at the regular (commercial) rates.   A monthly 1 ounce, 500 piece letter-sized bulletin (12 pages maximum) costs $600 more per year when mailed at Regular Standard rates, or $1,625 more mailed First Class, compared to Nonprofit Standard Mail rates.  [Current postage assumptions (note these can change): 1st Class 1-oz. piece rate = 44¢;  Regular Standard Mail piece Automation-compatible Area Distribution Center (AADC) rate (under 3.3 oz.) = 27¢;  Nonprofit Standard Mail Automation-compatible AADC rate (under 3.3 oz.) = 16.9¢.]

  Even if a newsletter or bulletin meets the content requirements of a periodical, it must exclude TIF advertising.   TIF stands for Travel, Insurance and Financial Instruments.   It is easier to remember “TIC,” substituting “C” for Credit cards, because Financial instruments is too broad a term.   Mortgage rates and certificate of deposit rates are allowed, for example.  Credit card and debit card ads, including a nonprofit’s affinity VISA card, for example, are not.   You may offer payment options by MasterCard, VISA, or American Express, for example, but may not use adjectives to describe how to facilitate payment.   You may not say “As an option use your low-rate (nonprofit organization’s name) VISA card to pay your dues.”

  TIC is only a Nonprofit Standard Mail restriction.   If you mail under the Nonprofit Periodicals Class, like The Elks Magazine, National Geographic, or a few large-Lodge news bulletins, TIC does not apply.   And it does not apply if you mail at Regular Standard (commercial), or First Class rates.

  The definition of travel has recently been expanded to mean travel arrangements.   Restricted travel ads include all implied or stated elements of transportation, accommodation, and destination.  Day trips are excluded from this definition.   General “image” ads for United Airlines or Amtrak are allowed.   A hotel ad without the transportation or destination component is allowed.   These ads are restricted only when all three are combined.   Now, a nonprofit organization can promote discounted air or hotel rates for their convention because that travel is substantially related.    Cruises tend to be suspect because recreational activity is predominant—even if a “primary purpose” event is on the agenda.   Generic business card ads for travel agents are considered ads for all travel arrangements they promote, so they are restricted.    Articles containing elements of transportation, accommodation and destination are restricted just as display ads with graphics and a nice layout.

  Insurance ads are generally restricted, including business card ads for insurance agents.   The only qualifying ads are for policies not generally commercially available.   The Postal Service believes that almost all insurance—even insurance packaged for special groups—are generally commercially available, even if rates and features of the plan might differ.   A District Court ruling recently challenges Postal Service interpretation, and the Aid Association for Lutherans/Lutheran Brotherhood (now called “Thrivent Financial”) won a case against the USPS, so watch for possible easing of this restriction in the future.

  In general, it is wise to check with USPS Business Mail Acceptance (or a Supervisor at Business Mail Entry (BME)) before printing anything new with regard to advertising content.   Interpretations can vary depending on your contact.   If you are advised that your content is prohibited, consider contacting any of the nonprofit mailing associations (DMA-Nonprofit Federation or Alliance of Nonprofit Mailers) or Industry Postal Customer Council Representative.  If there is a dispute over the regulations, BME is instructed to accept the mail and refer it to the USPS Inspection Service, rather than delay it for review. 

  Keep in mind, the regulations discussed above are periodically updated.  

[please follow us on twitter: @nonprofitpostal]

P.S. Please consider printing ADDRESS SERVICE REQUESTED near the address label of your newsletter to comply with USPS Move-Update regulations for First Class and Standard (Nonprofit and Regular) Mail.  Non-compliance for not using this or a substitute method to update your mailing list could cost you up to 7¢ extra per bulletin mailed.