The PRC has approved the rate increase to take place on August 29, 2021. Postage rates will be increasing by an average of 6.8%.
6.8% is made up by adding the Consumer Price Index (CPI), funds for retirement costs, a “density” factor (delivering less mail to more homes), and another tenth of a percent because they it wasn’t used during the last postage increase. This is not the last time you will see an increase like this – expect to see it again in 2022 and beyond.
The Postal Service calculates what they determine to be the rate authority granted by the PRC’s formula, and then consider the minimum they will need from this to mitigate lost income. After this consideration they determine how much they believe they can increase rates. Then this authority is used to propose a rate case for the PRC to approve.
The rate increase varies by class of mail, sort density, and piece size.
Nothing has changed in the rate case filed at the end of May – it’s just been approved. There are things you can do to help mitigate the increase.
- The Informed Delivery Promotion that starts on September 1 will give you 2% off your letter and flat mail, at least through November.
- You should also consider removing bad addresses from your files – ACS users still generally find 1% – 2% undeliverable addresses even after NCOA processing.
- Run your data files through PCOA also. Just because people are moving doesn’t mean they are reporting it to the USPS.
- Make sure you get your flat work out by August 27, 2021.
To learn more about this change and what it may mean for your and your organization, you can see detailed rate charts here: https://www.ccah.com/usps-price-increase-2021.pdf
There are lots of moving parts in the direct mail production world — more updates to come as we get them! Please leave any questions in the comment section below or send me an email at email@example.com.