My in-laws from Germany are visiting us right now and I thought it might be the perfect time to discuss services that help companies reduce the cost of international mail. I always like to reiterate that I have no allegiance with a specific vendor or vested interest in this space. My goal is to give you the basics about what is available and to know what to look for when selecting the right supplier.
Why would I use an International Mail Service other than the USPS?
As with most parts of the mail system, companies have come up with ways to either assist the USPS and share in their discount programs (Work-share), or have found ways to bypass our postal system entirely. For these companies to be in business, they have to offer you lower rates or faster service to get your mail to your required destination.
How do these services work?
These service providers will pick up your international items (Or provide you with a shipping label to their facility- typically UPS or FEDEX) and bring it back to their sorting hub. It then gets processed and grouped with other items going to that destination country or area. They will either deposit mail with the USPS, or direct ship and induct into that countries postal system. Some vendors will also have customized solutions to use third party services for final delivery.
When does it make sense to use an International Mail Service?
Clearly this type of service is not required by all companies. Here are the three main areas where it may make sense:
- Business Mail – You are spending over $10,000 per year in international mail through the USPS with your day to day requirements. An example would be if you were a college or financial institution who had students or clients abroad, with miscellaneous correspondence that got metered along with the other daily mail.
- Publications – You send out mailings or publications where a portion is going abroad. This has been the staple of this space since large groups of similar items can be picked up at once.
- Parcels – You are sending light weight packages abroad, either to fulfill orders or send samples. This is the fastest growth area in this space due to the increase in E-Commerce.
How do I select the right vendor?
Here are some of the key items to consider when looking at service providers:
- Where are their processing hubs located – Your mail is going to have to move to their location and you want to make sure that this distance will not delay your mail.
- Delivery Commitments – What is the vendors typical service levels to your main customer areas abroad. How do these levels compare with the USPS international service standards for First Class, Priority, Surface and Bulk Economy?
- Reporting Offered – What can they give you for billing and entering into the postal system to give you piece of mind.
- Do they have any facilities abroad: This can help with the movement of mail. It may also allow the piece to have the look and feel as if it was mailed from that country, improving the image and response.
- Reputation – I recommend doing some research about the size and experience of the provider and getting a few local references to vouch for their service levels.
- Price – I left this one for last on purpose. Rating is different for these services vs. how you compute with the USPS. It is typically based on a pound rate plus in some cases a smaller per piece charge. You need to be able to compare these rates across the different service levels they offer and providers in question.
What other items need consideration?
You may already use a service – Most mail houses (Firms that prepare mailings for customers) have arrangements with international mail services as an added value to their clients (or at times as a way to make a small profit from your international mail). Make sure you know the service being used and the savings you are receiving. You may be better off having your own agreement with a provider that picks up the mail at the mail house instead of using theirs.
Business Mail Accounting: Many companies charge back daily mail to a cost center or department. This is easy if the international mail goes through the USPS, because it can be done the same way as the domestic. If you use a third party service, the mail is not getting metered and will typically be billed after the fact. There are a couple of ways that the accounting can be managed for these items:
- Build a rate table by weight and service and key enter a charge into your mail accounting system.
- See if your international service can do any cost center accounting in their reports.
- Allocate a percentage of the international mail invoice to the highest use departments.
This is a very specific niche for those who are doing the right amount of international items where it makes sense to look at different alternatives from the USPS. If the volumes are there, the savings these service providers offer (Either in price or improved delivery) can be significant and is worth exploring.