MTAC Notes – 2007 Rates – Estimation Barriers

One of the hottest topics at MTAC had to do with the fact that although 2007 Rate Case RATES have been published, mailers are still in the dark as to what the new qualification and preparation rules will be. Until processing categories are defined by the USPS, any rate estimates would be purely speculative at best, and possibly misleading enough to cause mailers problems that outweigh the value of the estimate.

There was a great deal of discussion (and grumbling) regarding the new flats categories. Historically, the USPS publishes the proposed mailing standards at the END of the rate case cycle, which in this case would not be until October! The current rate case filing does not define the preparation – resulting in some mailers unable to determine which category their mailpiece will fall into; and some mailers considering redesign without a complete picture of what the processing category requirements will be.

Here are some unofficial definitions provided by PostCom:

Automation Flats. The USPS’ proposed Automation Flats category would include those pieces that by their physical characteristics can be processed on the AFSM 100 flat sorting machine, and are properly and accurately barcoded by the mailer.

Nonautomation Machinable Flats Pieces that by their physical characteristics can be processed on the AFSM 100 flat sorting machine, but which the mailer has not barcoded. The USPS will barcode these pieces, therefore the postage rate is not as low as that proposed for pieces already barcoded by the mailer, but since the USPS will be able to process the piece on automated equipment, the rate is not as high as proposed for nonmachinable pieces.

Not Flat Machinable (NFM) Flats/Parcels. Pieces that by their physical characteristics cannot be processed on the AFSM 100 flat sorting machine. Also, within the NFM category, the USPS in its rate case proposal, makes a distinction between NFM “hybrid flats” and NFM “hybrid parcels,” in that the latter category is likely to exist for a shorter (as yet unspecified) time period, after which those pieces would be forced to be mailed at the new parcel category rates. The NFM hybrid flats subcategory would include most of the pieces that currently qualify for automation nonletter rates on the UFSM 1000 flat sorting equipment. Also included in this category could be certain smaller rigid items that currently qualify as automation nonletters on the AFSM 100, the USPS notes in its rate case testimony.
In addition, the USPS informally has provided the following physical characteristics of pieces that likely would fall into the NFM hybrid flats category:

  • pieces greater than 3/4″ thick
  • pieces greater than 12″ x 15″
  • pieces less than 5″ x 6″
  • any rigid piece less than 3/4 inches in thickness with length and/or width 6″ or less (e.g., thinner/smaller rigid items such as jewel-boxed CDs and samples)

The NFM hybrid parcels subcategory would include pieces that currently may qualify for automation nonletter rates on the UFSM 1000, but are too thick or too large to be cased. The USPS informally has provided the following physical characteristics of pieces that likely would fall into the NFM hybrid parcels category:

  • rigid pieces (e.g., boxed/unflexible items), thicker than 3/4″ but no thicker than 1.25″ and/or with both length and width > 6″

The USPS proposes that hybrid flat NFMs and hybrid parcel NFMs, while sharing a rate structure, will have separate presort and make-up requirements (yet to be published). Both subcategories of NFMs are eligible for DDU drop ship entry discounts. Both subcategories are required to be barcoded by the mailer (type of barcode as yet unspecified by the USPS, and will be different for hybrid flats vs. hybrid parcels); nonbarcoded NFM pieces are subject to a 5-cent per piece surcharge (unless presorted to 5-digit ZIP).

Parcels. The USPS proposes creation of new parcel categories for both Standard Mail Regular and Nonprofit, which then is split into nonmachinable parcel rate categories and machinable parcel rate categories (as well as carrier route presort rate categories). The USPS informally has said that parcels qualifying as machinable will be those that meet the existing Parcel Sorting Machine (PSM) machinability criteria specified in Domestic Mail Manual (DMM) 401.1.5. Both machinable and nonmachinable parcels must be barcoded by the mailer or pay a 5-cent per piece surcharge (unless presorted to 5-digit ZIP).