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New PricesNew Flexibility
New Opportunities
May 12, 2008
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Agenda
Postal Act of 2006 Mailing Services Shipping Services Resources
New Prices – May 12, 2008
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Postal Act of 2006
Two categories:► Mailing Services with a cap► Shipping Services with a floor
Flexibility Predictability Choices Speed-to-market
New Prices – May 12, 2008
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Mailing Services
First-Class Mail (includes First-Class Mail International)
Standard Mail Special Services Periodicals Package Services
New Prices – Mailing Services – May 12, 2008
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Mailing Services
Consumer Price Index (CPI) cap 2.9% average increase by class Annual, predictable price changes 45-day notice required 90-day commitment
New Prices – Mailing Services – May 12, 2008
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First-Class Mail
$38 billion revenue Average +2.89%
New Prices – Mailing Services – May 12, 2008
Product % Change
Single-Piece Letters & Cards 2.50
Presort Letters & Cards 3.55
Flats 1.93
Parcels 2.18
International 3.09
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First-Class Mail – Single-Piece
Letter: 42¢ (+1¢)
Forever Stamp► Plenty of stamps on hand
No more nondenominated transition stamps
New Prices – Mailing Services – May 12, 2008
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First-Class Mail – Single-Piece
Additional ounce: 17¢ (unchanged)
Nonmachinable surcharge: 20¢ (+3¢)► New 62¢ stamp for 1-ounce square
envelopes such as greeting cards Postcard: 27¢ (+1¢)
New Prices – Mailing Services – May 12, 2008
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Promote efficient preparation Maintain strong 2.2¢ incentive for 5-digit Presort letters additional ounce
same price as for auto: 12.5¢ (- 4.5¢)
First-Class Mail – Automation & Presort Letters
New Prices – Mailing Services – May 12, 2008
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Align with domestic► Shape-based pricing
First-Class Mail International
New Prices – Mailing Services – May 12, 2008
1 ounce to Canada/Mexico 2007 New Change
Letter 69¢ 72¢ +3¢
Flat 69¢ 98¢ +29¢
Package 69¢ $1.18 +49¢
Nonmachinable letter surcharge: 20¢ Align country grouping with other international products
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Standard Mail
$21 billion revenue Average +2.84%
New Prices – Mailing Services – May 12, 2008
Product % Change
Letters 3.31
Flats 0.86
Parcels and NFMs 9.66
High Density / Saturation Letters 1.66
High Density / Saturation Flats and Parcels 2.09
Carrier Route Basic Letters, Flats, and Parcels 2.99
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Standard Mail Flats (catalogs)
Price increase well below average
Examples (5-digit/DBMC) 2007 New Change
3-oz Catalog 30.2¢ 30.6¢ +0.4¢
4-oz Catalog 35.8¢ 35.9¢ +0.1¢
5-oz Catalog 39.4¢ 39.4¢ 0.0¢
8-oz Catalog 47.6¢ 47.5¢ -0.1¢
New Prices – Mailing Services – May 12, 2008
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Lower pound prices for saturation and high-density flats
Examples (Saturation at DDU) 2007 New Change
3-oz Catalog 13.6¢ 14.0¢ +0.4¢
4-oz Catalog 15.2¢ 15.5¢ +0.3¢
5-oz Catalog 17.6¢ 17.7¢ +0.1¢
8-oz Catalog 24.6¢ 24.4¢ -0.2¢
New Prices – Mailing Services – May 12, 2008
Standard Mail Flats
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Periodicals
$2.2 billion revenue Average +2.72%
New Prices – Mailing Services – May 12, 2008
Product % Change
Outside-County 2.71
In-County 2.63
Allow recent changes to settle in and work on efficiency
New, limited-circulation pricing
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Package Services
$1.8 billion revenue Average +2.88%
New Prices – Mailing Services – May 12, 2008
Product % Change
Parcel Post 3.30
BPM Flats 0.47
BPM Parcels 2.10
Media Mail and Library Mail 4.54
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Special Services
$2.7 billion revenue Average +2.85%
New Prices – Mailing Services – May 12, 2008
Product % Change
Post Office Boxes 2.89
Certified Mail 1.89
All others 3.29 Certified Mail: $2.70 (+5¢) Return Receipt: $2.20 (+5¢) Annual Mailing Fees: $180 (+$5) Delivery Confirmation: no change
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Shipping Services
Greater pricing freedom and flexibility No price cap Each product and contract must cover cost Must cover 5.5% of Postal Service overhead 30-day notice required 60-day commitment
New Prices – Shipping Services – May 12, 2008
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Shipping Services
Priority Mail International Express Mail Parcel Select Parcel Return Service
New Prices – Shipping Services – May 12, 2008
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New Price Structures and Incentives
Price Lists Retail prices Commercial base prices Commercial volume prices
Negotiated pricing Commercial contract prices
New Prices – Shipping Services – May 12, 2008
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Express Mail
Average +3% Sunday and holiday premium: $12.50 (introduced March 3)
Zoned pricing with competitive local pricing
New Prices – Shipping Services – May 12, 2008
Retail Prices New
Weight 2007 Zones L, 1 & 2 Zone 3
Flat-Rate Envelope $16.25 $16.50 $16.50
1/2 lb. $16.25 $12.60 $14.65
3 lb. $24.50 $16.65 $21.35
10 lb. $45.25 $28.60 $38.10
Rename Post Office-to-Post Office as “Hold For Pickup”
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Express Mail
Commercial base prices 3% lower than Retail for
Express Mail Corporate Accounts (EMCA), Click-N-Ship, and PC Postage
New Prices – Shipping Services – May 12, 2008
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Express Mail
Commercial volume prices EMCA and PC Postage
New Prices – Shipping Services – May 12, 2008
Minimum Quarterly Volume
Additional %
(postal quarterly rebate)Total % off retail
125 2% 5%
438 4.5% 7.5%
938 7% 10%
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Priority Mail
Average +6% New large Flat-Rate box (introduced March 3)
► Lower price for APO/FPO addresses
New Prices – Shipping Services – May 12, 2008
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Priority Mail
Commercial base prices Lower than retail for Click-N-Ship, PC
Postage, and permit imprint
New Prices – Shipping Services – May 12, 2008
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Priority Mail
Price examples
New Prices – Shipping Services – May 12, 2008
Flat-Rate 2007 Retail Commercial
Envelope $4.60 $4.80 $4.75
Box (regular) $8.95 $9.80 $9.30
Box (large)(introduced March)
$12.95 $12.95 $12.50
Box (large) APO/FPO(introduced March 3)
$10.95 $10.95 $10.50
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Parcel Select
Last-mile commercial service Average +5.7% Promote destination delivery unit (DDU) Commercial volume prices for DDU
► Based on new growth above a threshold► Annual rebates
New Prices – Shipping Services – May 12, 2008
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Parcel Return Service
First-mile commercial service Average +2% Align pricing with outbound DDU
► Weight-based pricing
New Prices – Shipping Services – May 12, 2008
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Global Express Guaranteed
Average +5.2%
Retail price examples
New Prices – Shipping Services – May 12, 2008
2007 New Change
1/2 lb. $37.00 $38.95 $1.95
5 lbs. $77.00 $82.00 $5.00
Expedited date-certain delivery with money-back guarantee to over 190 countries
Commercial base prices ► 10% lower than retail for Click-N-Ship and PC Postage
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Express Mail International
Average +6%
Retail price examples
New Prices – Shipping Services – May 12, 2008
Date-certain delivery with money-back guarantee for packages sent to Pacific Rim countries
2007 New Change
1/2 lb., Flat-Rate Envelope $25.00 $25.95 95¢
5 lbs. $44.00 $45.50 $1.50
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Express Mail International
New Prices – Shipping Services – May 12, 2008
Commercial base prices ► 8% lower than retail for Click-N-Ship,
PC Postage, Global Shipping Software (GSS), and Express Mail Corporate Account (EMCA)
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Express Mail International
New Prices – Shipping Services – May 12, 2008
Commercial volume prices► Express Mail Corporate Account
Annual Volume Annual PostageCommercial Base Price Incentive
Commercial Volume Price
Incentive
No minimum No minimum 8%
1,000–2,999 pieces $20,000–$59,999 10%
3,000 pieces and above $60,000 and above 12%
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Priority Mail International
Average +6.1%
Retail price examples
New Prices – Shipping Services – May 12, 2008
2007 New Change
Flat-Rate Envelope $11.00 $11.95 95¢
5 lbs. $38.00 $40.50 $2.50
Flat-Rate Box (regular) $37.00 $38.95 $1.95
New large Flat-Rate box (introduced March 3)
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Priority Mail International
Commercial base prices ► 5% lower than retail for Click-N-Ship,
PC Postage, and permit imprint
New Prices – Shipping Services – May 12, 2008
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International Priority Airmail (IPA) and International Surface Airlift (ISAL)
New Prices – Shipping Services – May 12, 2008
Average price increase► IPA: 12.5%► ISAL: 21.3%
Continue published prices for full-service and drop ship
Eliminate published ISAL prices for Direct Shipment► Now, available through customized agreement
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Resources
New Prices – May 12, 2008
USPS.com/prices
► Mailing Services and Shipping Services highlights► New price lists► Downloadable price files► New Postage Statements► Federal Register notices
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Resources
Postal Explorer (pe.usps.com)
PCC Insider – PCC e-newsletter ([email protected]) DMM Advisory – customer e-newsletter
P&C Weekly – employee e-newsletter ([email protected])
MailPro – late April (usps.com/mailpro)
New Prices – May 12, 2008