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full service mandate

Just over two years ago, USPS had proposed that Full-Service mail preparation be required for mailers to claim automation rates. While many larger companies were already using Full-Service, most mailers were scrambling to make the changes necessary to keep their automation discounts. Then in a surprise move, the Postal Regulatory Commission (PRC) made a statement: a Full-Service mandate is equivalent to a price increase, and is subject to the Consumer Price Index (CPI) cap for postage increases. USPS, needing to use the CPI to balance their budget, cancelled the Full-Service mandate, and then challenged the PRC ruling in the courts.

Where the courts stand
Two years later, this issue has been through the wringer in the court system. There have been appeals, clarifications, remands and redefinitions, but the dust seems to have finally settled. Basically the PRC was correct to state that the mandate is a price increase, as it would eliminate a price cell (the Full-Service discount). In order to mandate Full-Service for automation rates, USPS would need to use their CPI allotment.

Where the industry stands
Even without the mandate, mailers have been adopting Full-Service. Currently, around 90% of eligible mail volume has been prepared for full-service. Granted, most of that volume is from the largest mailers. Most mailing software, including Satori Software products, has Full-Service support built in. But even with the easy migration path, some mailers say they won’t switch until there is a mandate. With the additional work for adoption and the threat of postage assessments, some mailers aren’t willing to take the risk. Unfortunately USPS hasn’t been clear that the assessments would only affect the Full-Service discount.

Looking forward
Currently there are many reasons to switch to Full-Service. There’s the postage discount ($3/1000 for First-Class Mail, $1/1000 for Periodicals and Standard Mail). If 75% of your eligible mail is sent Full-Service, your permit fees are waived. You can also qualify for certain mailing promotions and Mail Anywhere, which allows you to use your current permit at any postal entry office. You’ll get data too – free Address Change Service (ACS) for your Full-Service mail, and free mail piece tracking scan data.

It will be interesting to see what USPS does with the knowledge that they can change prices as long as they don’t eliminate any price cells. We anticipate that the next price change (other than the exigency rollback in April), will be January of 2017. They could use this opportunity to increase the discount for Full-Service, making it more enticing for mailers. We won’t know until the price change is announced, sometime this fall.

Making the switch
Full-Service is really just two major components: unique barcodes and electronic documentation. Even if you’re not ready to go all the way to Full-Service, you can still create unique barcodes and submit eDoc. We’ve seen that in many cases, just making the switch to electronic documentation can shorten the time you spend at the post office getting your mail verified.

Still have questions? Contact MCC’s Mailing Solutions Division at 901.725.9271!

Source: Whatever Happened to the Full-Service Mandate? | Satori Software