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Jan 16 Webinar 2014 Postal Rate Change A to Z

Q&A

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Q: When will the USPS Rate Change take effect?

A: Prices will change on Sunday, January 26, 2014. The changes impact both Mailing ('Market-Dominant') and Shipping ('Competitive') Services.

Q: Are the USPS Rate changes finalized?

A: Yes. The Postal Regulatory Commission (PRC) approved an annual CPI-inflation increase of 1.7% for market-dominant products on November 21, 2013. The PRC approved an additional 'exigent' increase of 4.3% for market-dominant Mailing Services on December 24, 2013. The additional exigent price increase does not impact Shipping Services products like Priority Mail that compete with other carriers (so-called 'Competitive' products). The PRC approved proposed prices for Shipping Services separately on December 12, 2013.

Q: Which Postal Service prices will increase on January 26, 2014?

A: The Postal Service will increase prices for all of its Mailing and Shipping Services on Sunday, January 26, 2014. Price changes affected the full range of Postal products:

Mailing Products Shipping Products First-Class Mail Letters, Postcards, Flats and Parcels Priority Mail First-Class Mail Presort Letters Priority Mail International First-Class International Mail Priority Mail Express Standard Mail Global Express Guaranteed

Package Services Express Mail International Extra Services Parcel Select

Below are the significant price increases that impact most of our customers:

First-Class Mail stamp to increase 3¢ to 49¢

1-oz First-Class Mail single-piece metered letter to increase 2¢ to 48¢

1-oz First-Class Mail flat envelope to increase 6¢ to 98¢

First-Class Mail Postcard to increase 1¢ to 34¢

1-oz to 3-oz First-Class Mail parcel to increase 25¢ to $2.32

Certified Mail to increase 20¢ to $3.30

Large Flat-Rate Priority Mail boxes to increase 60¢ to $17.45

Q: What do I need to know about the new Postage Meter discount that the Postal Service will introduce on January 26, 2014?

A: The price to mail a single-piece one-ounce business letter will increase from 46¢ to a discounted

rate of 48¢ for our mailing machine customers. First-Class letters up to 3.5 ounces qualify for the new 1¢ discount. (USPS retail counter and CPU customers will pay 49¢.) The USPS is introducing the special one-cent discount for metered single-piece First-Class Mail letters in recognition that postage meters are an efficient way to manage the flow of mail and help the Postal Service control its costs.

First-Class Mail Letters Post Office Retail Counter Postage Meter Rate

1 oz $ 0.49 $ 0.48

2 oz $ 0.70 $ 0.69

3 oz $ 0.91 $ 0.90

3.5 oz $ 1.12 $ 1.11

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Q: Why don’t Contract Postal Units (CPU) qualify for the new Postage Meter discount?

A: Even though the postage is processed from a postage meter, CPUs are contractually obligated to charge Post Office retail counter prices.

Q: What is the best way to obtain comprehensive, authoritative information about the USPS price changes?

A: Customers can log on to the USPS postal explorer web site at http://pe.usps.com. Publication 123 – DMM Notice 123 – is considered the definitive reference guide to Postal Service rates.

Q: Why are the price increases significantly greater than in past years'?

A: Under the terms of the Postal Accountability and Enhancement Act of 2006, regular increases in

Postal Service prices are permitted so long as they do not exceed the rate of inflation as measured by the consumer price index (CPI). The nominal annual price increases since 2006 have ensured that prices for Mailing Services have kept pace with the Postal Service's rising costs.

For January, 2014, the Postal Service proposed a 1.7% inflation-adjustment price increase for its Market-Dominant Mailing Services products. It also proposed an additional 'exigent' 4.3% price increase that was subsequently approved by the PRC for January, 2014. The Postal Accountability and Enhancement Act allows for an exigent rate filing – one beyond the annual

CPI increase – if the Postal Service has been affected by extraordinary or exceptional circumstances. In its filing, the Postal Service claimed that the effects of the Great Recession – primarily a 20% drop in postal volume since 2008 – constituted a qualifying exceptional circumstance. The PRC agreed and approved the additional price increases for January, 2014 but rejected, in a 2-1 vote, the Postal Service request to make the increased prices permanent and directed the Postal Service to come back with plans to roll back the increases in less than two years.

Q: What is the status of the IMb barcode requirement that had been scheduled to go into effect on January 26, 2014?

A: The Post Office had intended to roll out additional automation discounts on January 26, 2014 for mailers who complied with next-generation Intelligent Mail barcode (IMb) standards for sorting

and tracking of mail. In its review of the annual CPI-based postage adjustments that go into effect on January 26, 2014, the Postal Regulatory Commission (PRC) ruled that the IMb discounts caused the price increase to exceed the inflation-based cap. Approval of the annual CPI-based postage increase was conditional upon the Postal Service abandoning its plan to implement full-service IMb requirements on the same date. The Postal Service subsequently confirmed that it would defer the IMb requirement until after 2014.

Q: What is the status of the IMpb package barcode requirement that had been scheduled to go into effect on January 26, 2014?

A: While the Postal Service will require its next-generation Intelligent Mail package barcode (IMpb) to be affixed to commercial parcels shipped at discounted rates beginning January 26, 2014, the Postal Service has extended the deadline for mailers who use postage meters until January 25,

2015. After the one-year transitional period, meter mailers must meet the full Postal Service IMpb requirements in order to continue to receive preferred postage discounts. Mailers who use Neopost or Hasler IS-, IM-, IN- and IH-series mailing machines currently receive discounted commercial base price discounts automatically and will continue to do so throughout 2014. Neopost USA will inform its customers of their options for conforming to the new Postal Service requirements later in 2014.

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Q: What is a rate update?

A: When the Postal Service enacts price changes for its mail and parcel delivery services, the postage rate table in your mailing equipment must be updated to ensure that the correct postage is applied to your letters and parcels. The equipment requires the ‘rate update’ in order to automatically calculate the correct postage when metering mail on and after the data the new Postal rates take effect.

Q: How is the rate table software in my mailing equipment updated?

A: Older mailing equipment, including free-standing SE-, ST- and WJS-series scales, requires simple installation of a rate chip so that the equipment to correctly rate mail. Most IJ- and WJ-

series mailing machines require insertion of a smartcard to transfer the rate table prior to the effective date of the rate change. More advanced IS-, IM-, IN- and IH-series mailing machines connect to an Online Server to download rate updates.

Q: Which Hasler or Neopost mailing machines qualify for Commercial Base Pricing discounts for parcels mailed by Priority Mail and Priority Mail Express?

A: Only IS-, IM-, IN- and IH-series mailing machines that connect to our Online Server are approved by the Postal Service to automatically default to the Commercial Base Pricing discount for qualifying postal services.

Q: Why don’t Contract Postal Units (CPU) qualify for the Commercial Base Pricing discount?

A: Even though the postage may be processed from a qualifying postage meter, CPUs are

contractually obligated to charge Post Office retail counter prices. Retail counter customers pay

the standard shipping price for Priority Mail and Priority Mail Express.

Q: Why should I update my postal rates?

A: If you rely on a Neopost scale or mailing machine to weigh and rate your mail, you must update the rate software so that the equipment will automatically calculate the correct postage when

metering mail on or after Sunday, January 26, 2014. Your Neopost mailing equipment works best, saves you money, and keeps you compliant with USPS regulations when rate tables are kept up-to-date. Correct, accurate rating eliminates the needless overpayment of postage and the return of mail with short-paid postage.

Q: Will the delayed decision to approve the exigent rate increase delay availability of my rate update?

A: While some rate updates may not be available for shipment as early in January as in past years, the finalized price increases are currently in quality testing and your rate update will be available for delivery in advance of the January 26, 2014 rate changeover date.

Q: Will a single rate update include the price changes for both Mailing Services and Shipping Services that go into effect on January 26, 2014?

A: Yes. All January 2014 rate updates will include both the Mailing and Shipping Services rates that take effect on January 26, 2014. They will also include Zip Code and Postal Zone changes.

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Q: I am covered by a Rate Change Protection (RCP) contract. What do I do if I do not receive my January 2014 rate update?

A: If you fail to receive your rate update, please contact Customer Service at 1-800-NEOPOST (636-7678) for assistance. Representatives are available Monday through Friday between the hours of 7:00 A.M. to 7:00 P.M. (Central Time).

Q: My mailing machine is covered by Online Rate Protection. How and when should I expect to download the new rates into my mailing machine?

A: Your January 2014 rate update is now available for download into your IS/IM-Series or online-enabled IJ/WJ-Series mailing machine. There is no need to schedule a visit by a service technician. Simply connect your mailing machine and download the rates by going to the ONLINE SERVICES menu on your mailing machine and placing a GENERIC CALL to our server.

The download will take no more than three minutes if you are downloading the update into a mailing machine that is connecting by modem (and only seconds if connecting by LAN). After download, the mailing machine will automatically switch over to the new rates when they take effect at midnight on Sunday, January 26, 2014.

Q: What is Rate Change Protection (RCP)?

A: An annual Rate Change Protection (RCP) contract covers the cost of purchasing an individual update each time the Postal Service implements a price increase. The cost of the annual contract is substantially lower than the cost of buying updates for your equipment separately and coverage ensures automatic shipment and on-time delivery of the new rates.

Q: I am having difficulty installing or downloading my rate update.

A: Your update will be accompanied by installation instructions. You may obtain more detailed

instructions for updating the rates in your equipment by clicking here. Each of our Rate Change telephone agents are trained to assist and you may also contact a Service and Repair team technician for live assistance by selecting the Repair menu prompt at 1-800-NEOPOST (636-7678). Repair representatives are available Monday through Friday between the hours of 7:00

A.M. to 7:00 P.M. (Central Time). Please note that you will need to have your customer account number available in order to expedite contact with our Repair telephone-support team.

Q: To what address should I return my out-of-date rate update?

A: You can do your part for the environment. Please recycle your rate updates wherever possible. A pre-paid, self-addressed envelope is included with your shipped update. If your return envelope is missing, please send your obsolete rate update to:

Neopost USA Inc. Rate Return

P.O. Box 1183

4650 Hickory Hill Rd. Memphis, TN 38141-6815

Q: I need to send a Purchase Order for my update. What do I do?

A: If our records indicate your company needs to issue a purchase order before accepting products or services, you will automatically receive a letter from us. The letter will ask you to mail us your purchase order so that we can process and ship your order for a rate update. If you fail to receive your letter, please contact Customer Service at 1-800-NEOPOST (636-7678). Representatives are available Monday through Friday between the hours of 7:00 A.M. to 7:00 P.M. (Central Time).

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Q: How do I qualify for Pre-sort rates?

A: Qualifying minimums and participation requirements are listed in the Quick Service Guide 230d section of the USPS postal explorer web site at http://pe.usps.com/. This section provides information that will help mailers understand whether their commercial letters and postcards qualify for First-Class Mail automation discounts.

Q: What is Shape-Based Pricing?

A: The Postal Service introduced a shape-based classification system for First-Class Mail and packages in 2007 to align prices with its costs of processing mail, particularly mail and packages that require manual sorting and handling. Postage is determined by whether the mail piece conforms to shape and content guidelines in addition to weight. Cards, letters, flats and packages that fail to conform to the minimum or maximum dimensional classifications are

subject to increased rates and additional surcharges.

Postcards Letters Large Flat Envelopes

Min length 5" 5" 11 1/2"

Max length 6" 11 1/2" 15"

Min height 3 1/2" 3 1/2" 6 1/8"

Max height 4 1/4" 6 1/8" 12"

Min thickness 0.007" 0.007" 0.007"

Max thickness 0.016" 1/4" 3/4"

Max weight 3.5 ounces 13 ounces

A postcard that exceeds any of the dimensions above will be classified as a letter.

A letter that exceeds any of the letter dimensions above will be classified and priced as a large envelope (flat).

A large, flat envelope that exceeds any of the dimensions above will be classified and priced as a package.

First-Class Mail letter-size pieces over 3.5 ounces pay flat-size prices.

Any piece that exceeds 13 ounces in weight is classified and priced as Priority Mail.

If a letter-sized piece has an aspect ratio (length divided by height) of less than 1.3 or more

than 2.5, If the contents of a flat-sized mail piece causes variations in thickness of more than 1/4 inch (e.g. loose items), if a piece is too small or too rigid, or if items have irregular shapes (square envelopes or tubes), a piece may be subject to a non-machinable surcharge or additional postage.

To view the on demand recording of this webinar, visit: http://www.media-server.com/m/p/xb7hqp5t