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Ruler now vital for figuring postage.

Byline: Tim Christie The Register-Guard

A few extra square inches on a piece of mail may add up to thousands of dollars in extra costs to businesses and nonprofit organizations that rely on the U.S. Postal Service to communicate with customers, vendors and patrons.

When the Postal Service increased rates May 14, the 2-cent hike in first-class mail to 41 cents and the introduction of the "forever stamp" got the most attention. But more important for businesses is a new rate structure based on the size of mail, not just the weight.

For example, a one-page document folded and mailed in a standard No. 10 business envelope, or even in a half-page-size envelope, costs 41 cents to mail under the new rates.

Stick that same document unfolded in a 9-by-12-inch envelope, known as a "flat," and it costs 80 cents to mail. A standard envelope that's more than a quarter-inch thick will be charged the 80-cent rate for the first ounce.

The justification for the new shape-based rates is that they more accurately reflect what it actually costs to handle, transport and deliver different sizes and shapes of mail, said Ron Anderson, the Postal Service's customer service coordinator in Portland.

"For a long time - forever - the Postal Service has based delivery of mail strictly on the weight and, in some instances, the distance without any regard to the size or shape of that piece of mail," he said.

Because the Postal Service delivers literally billions of standard-size letters, it has the technology and machinery to efficiently sort, handle and deliver such mail, he said.

But the larger pieces of mail vary widely in thickness, weight and even texture, making it more difficult to handle automatically, he said.

"We documented that it costs more to process oversized envelopes and parcels than it does a letter," Anderson said.

Businesses are scrambling to deal with the new rates, and some are squawking.

The Direct Marketing Association in New York is "very, very unhappy" and protested the new rates, spokeswoman Stephanie Hendricks told the Associated Press.

Orenco Systems Inc., a Sutherlin company that designs and manufactures equipment for decentralized wastewater treatment systems, relies on the public mail to communicate with customers and vendors, and much of its material goes out in flat envelopes, marketing manager Sandra Huffstutter said.

"Reports, proposals, contracts, price lists, brochures, technical data sheets - those are the kinds of basic business documents that we need to mail to our customers in a 9-by-12 envelope," Huffstutter said.

Huffstutter was preparing to send out a mailing earlier this month to about 5,000 engineers about the technical specifications of a new pump when her mailing contractor alerted her to the new rate structure about to take effect.

So the company hurried to get a 5,000-piece mailing out on May 11 at a cost of $1,500.

Had Orenco waited until the following Monday, the same mailing would have cost $2,100 - 40 percent more, Huffstutter said.

Orenco is looking at ways of cutting its mailing costs, she said.

For example, the company may start sending some documents via e-mail, or promoting use of the document library on its Web site.

But there's risk in sending out technical documents in electronic form because a customer could misprint or miscollate the document and install a system incorrectly as a result, Huffstutter said.

It also plans to send more documents folded in half inside 4-by-9-inch envelopes, which require just the 41-cent stamp.

But Orenco won't stop sending out flats, she said.

"We're all competing for attention from customers and consumers in general," she said.

"We found that sending things to our distributors and dealers and regulators in larger envelopes commands attention."

Jason Pierce, president of IP/Koke, estimates the new rates will affect 60 percent of his print customers and could double the cost of mailing the company's own My Little Salesman catalogs.

Jim Ralph, executive director of The Shedd Institute for the Arts, said his organization spends in excess of $30,000 a year on postage to promote the more than 100 concerts at its downtown Eugene venue.

"It's gotten horrendously more expensive," he said. "We'll continue to mail - we're just going to have to look at how to optimize it. It could mean we change the shape of our pieces a little bit."

Richard Russell, president of Accessible Data Services Inc. in Eugene, a full-service mail house, said that's one strategy he'll be suggesting to customers who are trying to reduce their mail costs.

For example, reformatting a catalog from magazine size to a half-page size - 6 1/8 -by-11 1/2 inches - means it can be mailed at the letter rate. Other steps include:

Cleaning up databases to make sure addresses are accurate and up to date.

The Postal Service estimates it spends more than $2 billion a year handling mail that is undeliverable because of bad addresses.

Consolidating mailings. For example, instead of sending out a separate invoice in one envelope and a marketing brochure in another, combine them in one envelope. Or send out invoices every other month, instead of monthly.

Sending out postcards to customers and prospects, asking them if they want to continue receiving a catalog or directing them to the company Web site. That may require spending money to set up or update the Web site.

The rate changes prompted IP/Koke and Accessible Data Services to form a new joint venture called Cornerstone Mailing Innovations.

The new company will help businesses figure out how to cost-effectively navigate the new postal regulations, Pierce said.


For more information about the U.S. Postal Service's new shape-based postal rates:

On the Web, go to /rates.

Businesses with specific questions about the new postal rates can call (541) 988-5135.
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Article Details
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Title Annotation:Business; Businesses are learning to economize by using a new postage rate structure based on the size of mail, not just the weight
Publication:The Register-Guard (Eugene, OR)
Date:May 23, 2007
Previous Article:Let states lead way.

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