November 2, 2010

2011 Shipping Services Prices and Incentive Program Proposals Filed at PRC

Today we submitted two filings to the Postal Regulatory Commission (PRC), one for price changes for our competitive products, and another for mailing standards changes that include new incentive programs.

The competitive products filing includes new Shipping Services prices which – following PRC review – will take effect on January 2, 2011.

Overall, Shipping Services prices will increase an average of 3.6 percent. This includes prices for Express Mail®, Priority Mail®, Parcel Select®, Parcel Return Service, Global Express Guaranteed®, Express Mail International®, and Priority Mail International®.

Innovations introduced in the competitive products filing include a new Padded Flat Rate Envelope for all Priority Mail categories and Legal Flat Rate Envelopes for Priority Mail and for Express Mail.

For commercial base and commercial plus Priority Mail customers, an economical new Regional Rate Box will be available in two sizes. Prices are based on box size and zone—Regional Rate Box A maximum weight limit is 15 pounds and Box B maximum weight limit is 20 pounds.

Critical Mail™ is another new product innovation for Priority Mail commercial plus customers. It is offered at flat rate prices for letters and flats and USPS-supplied packaging is required. Critical Mail travels in the First-Class Mail® stream and First-Class Mail service standards apply.

Included in proposed mailing standards changes filed at the PRC today were two incentive programs that were originally filed with the price changes proposed in July:

§ Reply Rides Free — encourages the inclusion of marketing messages in bill and statement mailings, and payment of bills using the mail. For qualifying customers, a 1.2-ounce piece is charged the 1-ounce price if a reply envelope or card is included in the mailing.

§ The Saturation Mail/High Density Incentive Program — provides rebates for volume growth over 5 percent for frequent mailers of Saturation or High Density Standard Mail letters and flats.

Proposed mailing standards changes also include a small increase in the threshold below which the Move Update assessment charge applies. If approved by the PRC, the measures outlined in the filing take effect January 2, 2011.

Note that the January 2, 2011, versions of postage statements must be used due to the numerous types of changes that were required to meet financial and data reporting requirements, including Sarbanes-Oxley.

The new 2011 prices are available online on the Postal Explorer® website at pe.usps.com. Federal Register notices for both filings will also be available soon on Postal Explorer. We will notify you through DMM Advisory.