USPS® is raising rates on January 21, 2024, for the fifth time in 29 months with some of the largest increases in history and at significantly higher increases than inflation. We can expect these rate spikes to continue as the USPS has stated that two increases per year will be their new norm.
Postal Advocate has been creating comparison charts for our clients that go over the changes in rates to show how it will affect budgets. The reason we do this is to provide a true comparison versus the overall average % increase that the Postal Service talks about. Based on the type of mail you send; the increase could be higher or lower. Also, when you look at the new rate charts provided by the USPS®, they typically will not show the level of detail needed (Previous and new rates, side by side) to see these differences.
Hopefully, this will help you budget by seeing the impact of the most common services that you use today. At the bottom of this article there is a link to an excel tool where you can plug in your mail volumes to see the impact to your organization.
First-Class Mail® Single Piece – 1% – 4% Increase
The retail rate of an ounce letter goes up by $0.02 to $0.68, but the metered letter rate is only increasing $0.01 to $0.64. This means there is a $.04 savings by having a meter or online postage platform vs. buying stamps at the USPS. A single piece flat is increasing from $1.35 – $1.39, but the additional ounce rate is staying the same at $.24. Postcards are seeing the largest increase at $.02 or a 4% change.
First-Class Mail® Commercial – 1% – 21% Increase
Automation letters are going up 2% and Flats by 1-2%. With any increase, it becomes more important to look for ways to reduce costs. These are the options available:
- Use Meters or Online Postage to save $.04 on letters.
- Consider presort services if you run over 500 pieces per day or have one-time mailings over 1000 pieces.
- Automating your mailings in house or through third party mail services to have drastic postage savings.
- Presort and automation levels go up to 3.5 ounces for the same base rate.
- Flats and postcards can have the same automation rates as letters.
- Consider moving generic content mail from First Class to Marketing Mail
Marketing Mail® (Formerly called Standard Mail) – 1-5% Increase
Marketing Mail® Letter rates are increasing at approximately 1% while Flats are going up at 2-5%. The best way to save money is to move mail closer to its final location utilizing destination entry level discounts. The savings increased by 17% back in July and you can subtract $.027-.035 per letter and $.07-.09 per flat.
USPS Competitive Services
UPS® and FedEx® just announced a 5.9% increase for 2024 and USPS increases are right in line with this as you can see below.
The best way to reduce costs in this area is to convert your items from Retail to Commercial Base rates. You must process your items through an online postage solution that can generate a 4” x 6” shipping label with the address, barcode and return address embedded. USPS.com only allows for Retail rates so you will need to look at third party solutions that start at about $15 per month. These average savings for items less than 10 LBs (The most common for the USPS) is the following:
- Priority Mail® – 30% Savings
- Priority Mail® Express – 14% Savings
- Ground Advantage – 26% Savings
Additional Rate Change Items
23-56% increases in 29 months are unheard of and is impacting every organization. Mailers are going to need to look for savings strategies to help offset these changes. Our recommendation is to create visibility to all mailings and look for automation methods where applicable to reduce the cost and streamline production.
To budget for this increase, you need to look at the type of items you are sending, and the weight and zones that are most common, to truly estimate the impact. We have developed a Microsoft Excel-based budget calculator that you can download for free (https://postaladvocate.com/rate-change-tools/) that should help you better plan for this year. Most of the most popular USPS classes are going up, but luckily there are ways to help mitigate this through automation and technology.