Postal Service issues final 'deflection' rule; determines effective dates

In December 2009, USPS Mailing Standards published a proposed rule in the Federal Register regarding deflection standards and proposed postage increases for flats that failed to meet these standards. In short, this proposal would have taken all basic carrier route rates away from most newspapers.

A period of time was allowed for comments, with TPA and NNA submitting comments on behalf of their members articulating the unfairness and negative impact of the proposed changes. Several members also submitted comments. These comments appear to have had some effect in that the postal service revised the proposed rule to lessen the negative consequences to most newspapers.

Earlier this month the final rule was published. The deflection standards will become effective June 7 and postage consequences (rate increases) will become effective Oct. 3. The final decision states that DDU entered, carrier route flats would be exempt from the deflection standards, and not be subject to higher postage rates, but all nonDDU entered flats would have to meet the deflection standards or be subject to higher postage costs. Both In-County and Outside County nonDDU carrier route pieces not meeting the deflection standards would be charged the 5-digit rate, and machinable barcoded or automation flats not meeting the deflection standards would be charged nonmachinable or nonautomation rates. Virtually every member’s postage costs are going to go up. Every newspaper will be affected differently based on DDU entry, in-county, outside county, automation and other factors. Some members may only see a couple percent increase, others could see their postage cost go up significantly. A separate postage increase article is included to help you estimate your postage increase.

The entirety of this final rule as well as the background, summary of comments, responses to comments, deflection standards, and summary of changes is available at: http://pe.usps.com/FederalRegisterNotices.asp All members are strongly encouraged to review this ruling as virtually every member newspaper will be subject to higher postage costs on October 3, 2010.

This revised ruling is considered at least a partial victory for member newspapers. However the postal service stated they may reevaluate this decision to exempt DDU entered Carrier Route pieces in the future and strongly encourages customers to work toward meeting the deflection standards. To control inevitable future postage increases TPA also strongly encourages members to work toward meeting the deflection standards.

How to Avoid Upcoming Postage Increases

By Joel Allis, TPA Postal Consultant

The vast majority of Texas Press Association member newspapers will be affected by the final rule relating to the deflection standards and piece price increases released earlier this month. This final rule and related information is available at http://pe.usps.com/FederalRegisterNotices.asp.

As information, DDU-entered Basic, High Density and Saturation pieces are currently exempt from the deflection test and postage increases.

But your postage costs are going to increase. In-County non-DDU Basic Carrier Route pieces will go up almost 80 percent. The loss of Outside County machinable piece rates will cost you from 5 percent to more than 30 percent more than you are paying now. Consider taking the following steps before June 7, the effective date of the standards, and Oct. 3, the effective date of the postage increases.

-- Check your postage statement to ensure you are properly claiming eligible DDU copies.

-- Consider adding additional DDU or Exceptional Dispatch entry locations.

-- Make sure you are claiming every DDU entered Carrier Route piece you are entitled to claim.

-- Investing in approved presort software may provide valuable assistance.

-- Maximize the use of firm bundling.

Communicate with and work with your printer and your peers to discuss ways to enable your newspapers to become compliant with the deflection standards. This would include considering changes in paper characteristics, adding stiffeners or quarterfolding. Success stories from Texas Press Association and National Newspaper Association members and any additional information will be shared as they are made available.

In the comments released with the final rule, the Postal Service stated the decision to exempt DDU-entered Carrier Route pieces may be reevaluated in the future ... and strongly encouraged customers to work toward meeting the deflection standards.

This means even more postage increases may lie ahead for flats not meeting the deflection standards. Flat-size pieces that do not meet deflection standards are not currently eligible for any automation flat prices, including full-service Intelligent Mail prices. The importance of taking this issue seriously and working to meet the deflection standards cannot be overemphasized.

How to estimate your postage increase if your newspaper fails deflection test

Your newspaper will be subjected to the new deflection standards on June 7 and if your paper does not meet these standards higher piece price postage rates will be charged beginning Oct. 3. You can avoid postage increases by meeting the new deflection standards. The following information will help you estimate how much your postage will increase with failed deflection. You will need a copy of a representative postage statement to calculate the estimated postage increase.

In-County: Multiply number of non DDU basic carrier route copies times 4.6 cents if not barcoded, 4.0 cents if barcoded.
Automation Flats; Basic, 3-Digit and 5-Digit, will go to Nonautomation. Increases by line number are as follows:
Line A6 goes up 1.6 cents
Line A9 goes up 1.2 cents
Line A12 goes up 0.6 cents

Outside County: Multiply number of Non DDU Basic Carrier Route copies times 10.8 cents if not barcoded, 9.8 cents if barcoded.
Machinable flats will go to Nonmachinable flats. Increases by line number are as follows:
Line C1 goes up 15.8 cents
Line C2 goes up 17.1 cents
Line C3 goes up 9.0 cents
Line C4 goes up 9.1 cents
Line C5 goes up 4.5 cents
Line C6 goes up 3.4 cents
Line C7 goes up 2.4 cents
Line C8 goes up 1.5 cents

Totaling the above line increases will give you an estimate of your postage increases for each beginning Oct. 3. As you can see from the above information some of the postage increases are significant. In-County non-DDU Basic Carrier Route pieces will go up almost 80 percent. The loss of Outside County machinable piece rates will cost you from 5 percent to more than 30 percent.

Please contact your TPA Periodicals Consultants with your questions and concerns.