May 14 2007 USPS Rate Increase

This is actually the 1st proposed USPS rate change since 2001; the 2006 rate change was a result of a 2003 law requiring the USPS to place $3.1 billion in escrow. This new, USPS proposed, Shape-Based Pricing initiative is scheduled to go into effect in May 2007.
The USPS is migrating to a Shape-Based Pricing structure to create a more efficient mail system. The USPS has assessed their operation, identifying the items that both add and reduce costs, and have built their Shaped-Based price structure accordingly, thereby introducing a rate change for different mail types and classes. The USPS has stated that these changes will position themselves positively for future growth.
Overview of Changes in Rate Structure
The proposed 2007 rate change is structured to encourage customers to prepare mail in ways that increase efficiency for USPS' processing capabilities. Essentially, mail items that are easier for the USPS to process will be rated lower than items that are not. This approach results in pricing that will be affected also by the size and shape of the item, with less emphasis being placed on weight.
Key Initiatives:
· Because of their shape differences, letters, flats and parcels will now all be priced differently because they are all handled and processed differently.
· To encourage address quality and efficiency, reducing ACS fees and proposing a new, lower-priced OneCode ACS using the 4-state barcode.
Pricing incentives to increase USPS efficiency, including container types, drop shipping locations, and mailpiece sorting