St Croix Press
Bookmark and Share

December Circulation Roundtable Recap: Be Ready to Work with the USPS in 2010 and Beyond

by Kathryn Knudson

By June, you'll need to have an answer to this question:

Q: How do I check to see if my publication passes the deflection test?

A: For a piece 10” or longer, place it on a table with half of it hanging off the edge. If the piece “droops” less than 3” at either end, it passes the test. For a piece shorter than 10”, also place it on a table with half of it hanging off the edge. If the piece “droops” less than 2” at either end, it passes the test.

With all the changes the publishing and media world saw in 2009, it's no surprise that a number of new initiatives are occurring in the postal realm. These important changes will affect everyone's business in the year ahead, and Joe Schick, the Director of Postal Affairs at Quad Graphics, led the group of audience developers through what we can expect.

In the past, magazines were considered a preferred class of mail, seen as serving the public good. This is not longer the case. The United States Postal Service (USPS) considers periodicals' cost coverage should be 100%, while in reality it stands at about 84%. The economy had a huge impact in fiscal year 2009, which ended September 30th. From 2005-2009, the USPS has seen a decline in mail volume of 26%, with a loss of over 13% in 2009 alone. Looking ahead to FY2010, the USPS expects further volume and revenue declines and continued cost-cutting measures, with labor negotiations on the horizon in 2011.

While there is some good news – no price increase in 2010 or tinkering with prices within classes, for example – the modifications and new products such as Intelligent Mail Barcode (IMB) in essence do raise costs. For now, these costs may be increased for the service provider/mailer rather than the publisher.

So what's happening in 2010?

Rolling out Flats Sequencing System (FSS) – Flats sequencing is being done to reduce delivery costs. The most efficient (and cheapest) model will be everything from one scheme on a pallet. Unfortunately, it's very hard to do – it's comparable to a 5-digit pallet today, which is very rare. There will be other FSS plans offering less discounts based on current SCF and current BMC that most publishers will be able to utilize.

Flats Deflection Testing – The deflection, or droop, test shows the USPS if your publication can work with their machines. Depending on size of piece, the publication can't “droop” more than 2” or 3” from the midway point when placed lengthwise off the edge of a table.

A testing process was originally proposed in March 2009, but the implementation has been delayed three times and will now occur June 7, 2010. In inexplicable USPS fashion, you can't pre-test your pieces based on number of pages and paper stock, etc., so you have to produce the piece before you find out if it passes. It certainly would be wise to test your current issues to see if your common formats would pass the test.

Intelligent Mail Barcode (IMB) – has been gradually rolling out since July. There are a number of problems at this point – ACS is not so free, publishers are seeing duplicate hits (the “big” publishers are working on that), PostalOne can't handle all the data so many mail statements for co-mail are being created rather than one, and IMB doesn' t support multi-class co-mail or co-palletization right now. The discount is there, but you must use full service IMB to receive it.

Miscellaneous items – as time ran short, Joe briefly addressed a few additional postal initiatives planned for the near future, including continued closing or consolidating of facilities, improvement to the dropship process, compliance with Sarbanes/Oxley, and the planning for 5-day delivery.

Looking ahead to 2011, these items will have big impacts on publishers, especially if the 5-day delivery plan becomes a reality or the USPS moves the Critical Entry Times (the latest time mail can be entered at a postal facility) to earlier in the day.

Joe's presentation included a number a very helpful slides including those showing pricing on non-compliance with Flats Detection Testing and proposed service standards, among others. To request a copy of his presentation or ask him any questions about items he covered, please contact him at joe.schick@qg.com.