Complete Story
09/21/2016
At Long Last, Catalogers Anticipate Rate Relief from USPS
Source: Al Urbanski, DM News, September 9, 2016
Ever since 2007, when the Postal Service used new legislation to inflate rates for catalogers, which put a third of them out of business, catalog sellers and other users of the flats postal category have felt wronged by the United States Postal Service. That feeling intensified a few years later with the boondoggle of the Flats Sequencing System, or FSS, that employed expensive new machines intended to make flats processing more efficient. Instead, it did the opposite.
But relief for catalogers appears on the way. In recent talks with members of the Mailers' Technical Advisory Committee (MTAC), USPS officials proposed to roll back some FSS directives causing price pain to catalogers and lowering flats volumes in postal facilities.
DMN has learned that, in meetings with MTAC officials, USPS revealed it intended to eliminate the FSS price cells with 2017 rate changes it files with the Postal Regulatory Commission. The Postal Service will raise the piece per pound threshold for using FSS, allowing catalogers to add more pages to their books or use higher-weight paper. It will also remove FSS pricing that was put into play in 2015 and return to 2014 pricing strategy for the category. The 2015 price change amounted to about a 4.5% premium.
Disappointing outcomes from the FSS program has also had a negative impact on the Postal Service, whose chief goal with such mass-mailer initiatives is to increase mail volumes. But a study of 10.6 billion flat pieces conducted by the American Catalog Mailers Association (ACMA) showed that rate and processing cost increases caused catalogers to move away from FSS and decrease their mailing volumes.
“The Postal Service realized it was a mistake. They saw the mail start moving away, so they went back to the 2014 FSS price structure,” said ACMA President and Executive Director Hamilton Davison. “They'll have to add in a few CPI increases, but the structure will probably be the one that existed in 2014.”
