Embed Size (px)
Citation preview
1
Shaping a More Efficient FuturePrice Change Proposal
Mailers’ Technical Advisory Committee
Stephen M. KearneyVice PresidentPricing & ClassificationMay 17, 2006
2
High-Level Goals Growth Efficiency Cost coverage Addressing Positioning for the
future
3
High-Level Initiatives Shape-based pricing
– Less emphasis on weight
Incentives– Containers– Drop shipping– Sorting– Packaging
More choices Forever Stamp Low-cost Address Change Service
4
Agenda Review full product line
– Strategy– Significant changes– Specific examples
Timeline to 2007 Questions
5
First-Class MailStrategy Shape-based pricing schedules
– Letters– Flats– Parcels
De-emphasize weight
6
First-Class MailSignificant Changes Forever Stamp Single-piece 39¢ ►42¢ Postcards 24¢ ►27¢ Additional ounce 24¢ ►20¢
– Letters over 1 ounce go down– Flats over 6 ounces go down
Similar pattern for workshare New Business Parcel category
7
First-Class MailExamples
Weight Current Proposed
1 ounce 39¢ 42¢2 ounce 63¢ 62¢3 ounce 87¢ 82¢
Letters
Weight Current Proposed
1 ounce 52¢ 62¢7 ounce $1.83 $1.8213 ounce $3.27 $3.02
Flats
Weight Current Proposed
1 ounce 52¢ $1.007 ounce $1.83 $2.2013 ounce $3.27 $3.40
Parcels
8
First-Class MailExamples
Item Current Price
Proposed Price Opportunity
Proposed Price with
Modification
6 oz. parcel $1.59 $2.00Reconfigure
as a flat $1.62
2 oz. flat $0.63 $0.82Reconfigure
as a letter $0.62
+ 19¢
+ 3¢+ 41¢
- 1¢
9
Priority MailStrategy Cover costs
– Especially large lightweight items
De-emphasize weight for heavier items
Continue to improve convenience
10
Priority MailSignificant Changes Dimensional weight pricing for
Zones 5-8 Lower prices for heavier items Permanent Flat Rate Box
11
Priority MailExamples
Item Current Proposed
Flat Rate Envelope $4.05 $4.65
Flat Rate Box 8.10 8.80
12-pound (Chicago to Los Angeles) 19.80 22.85
25-pound (Chicago to Los Angeles) 36.85 31.05
12
Priority MailExamples
Item Current Price
Proposed Price Opportunity
Proposed Price with
Modification
Zone 8, 10 pound, 1.6 cubic foot
parcel$20.25 $28.75
Reduce size by 25% to 1.2 cubic
feet$24.85
+ $8.50 + $4.60
13
Express MailStrategy Low-cost alternative for
shipping documents
Significant Change New 1-pound price
14
Express MailExamples
Price change examples Current Proposed
Up to 1/2 Pound & Flat Rate Envelope $14.40 $16.25
Over 1/2 Pound, up to 1 Pound 18.80 19.50
Over 1 Pound, up to 2 Pounds 18.80 21.40
15
Standard MailStrategy Align pricing with operations
– Encourage growth of efficient, effective mail
Expand shape-based pricing
16
Standard MailSignificant Changes Increase drop ship incentives Add more presort options Create distinct prices for parcels Add “Not Flat-Machinable” category Discontinue destination delivery unit
rate for letters Differentiate prices for detached
address labels
17
Standard MailExamples
Item Current Proposed
Advertising letter (3-digit auto, DBMC) 19.2¢ 20.7¢
Non-machinable letter (3-digit, DBMC) 30.3¢ 39.5¢
Catalog (3-ounces, 3-digit auto, DBMC) 25.3¢ 30.0¢
Catalog (3-ounces, 5-digit auto, DBMC) 25.3¢ 27.2¢
Catalog (8-ounces, 5-digit auto, DBMC) 44.1¢ 44.9¢
Catalog (8-ounces, 5-digit auto, DSCF) 42.8¢ 43.3¢
18
Standard MailExamples
Item Current Price
Proposed Price Opportunity
Proposed Price with
Modification
8 oz. parcel, basic presort, no
drop ship82.4¢ $1.301
Enter at destination BMC
$1.101
12 oz. parcel 3/5-digit presort,
DSCF85.3¢ 93.9¢
Enter at DDU, 5-digit presort
80.1¢
4 oz. rigid auto flat, 5-digit
presort, DSCF27.5¢ 49.1¢
Use auto-compatible
flexible packaging
29.1¢
+47.7¢ +27.7¢
+8.6¢ - 4.2¢
+18.7¢ +1.6¢
19
PeriodicalsStrategy Encourage efficiency
– Containers– Drop ship
Simplify co-palletization rules
20
PeriodicalsSignificant Changes New 85¢ container charge Enhanced drop ship incentives
– Particularly for high-editorial content
21
PeriodicalsExamples
Item Current Proposed
Weekly news magazine (6 oz., 40% adv., CR-RT, SCF, 2000-piece pallet) 17.9¢ 20.0¢
Opinion journal (5 oz., 10% adv., 3-digit, zone 4, 50-piece sack) 29.5¢ 33.6¢
Local Newspaper (4 oz., DDU, CR-RT) 8.5¢ 10.5¢
22
PeriodicalsExamples
Item Current Price
Proposed Price Opportunity
Proposed Price with
Modification
8 oz., 5-digit auto, mailed in sacks (40 pieces per
sack)
33.4¢ 38.1¢
Co-palletize with another
magazine (1639 pieces per pallet)
36.1¢
As above, but entered at DADC
31.2¢
+ 4.7¢
+ 2.7¢
- 2.2¢
23
Package ServicesStrategy More efficiency Streamline product offering
24
Package ServicesSignificant Changes Discontinue retail Bound Printed
Matter Lower increase for DDU and
DSCF entry Require barcodes on all Parcel
Select items
25
Package ServicesExamples
Price change examples Current Proposed
1-Pound Parcel Post $3.95 $4.55
5-Pound Parcel Post (Chicago to Los Angeles) $9.11 $9.45
5-Pound Parcel Select DDU $1.51 $1.67
15-pound Parcel Select DSCF $3.27 $3.88
1.5-Pound BPM flat DSCF presort 73.1¢ 72.8¢
5-Pound BPM parcel DBMC presorted & barcoded $1.298 $1.516
26
Special ServicesStrategy Improve address quality Modernize services
Significant Changes New low-cost One Code Address
Change Service for letters Redesign Insurance Reduce electronic Return
Receipt fee
27
Special ServicesExamples
One Code ACS fees Current Proposed
Automated First-Class Mail (letters only)
First two notices, each N/A 0¢
Additional notices, each N/A 5¢
Automated Standard Mail (letters only)
First two notices, each N/A 2¢
Additional notices, each N/A 15¢
28
Special ServicesExamples
ACS fees Current Proposed
Electronic ACS notifications (First-Class Mail) 21¢ 6¢
Electronic ACS notifications (other classes) 21¢ 25¢
Manual (paper) notifications (all classes) 75¢ 50¢
29
Special ServicesExamples
Item Current Proposed
Certified Mail $2.40 $2.65
Express Mail Insurance ($100 to $200) $1.05 75¢
Return Receipt (paper copy) $1.85 $2.15
Return Receipt (electronic) $1.35 85¢
30
Timeline
2006 2007
May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Governors Decision(March/April)
Implementation(May/June)
PRC Recommendation(Early March)
Litigation(May through March 2007)
Filing Date(May 3, 2006)
10 Months
1 Year
31
Thank YouQuestions?
