An important piece on Shape-base pricing was published recently. These changes were the big buzz at the Postal Show we attended recently in Washington. The cost impact to shippers will be huge.

The complete article can be found at: http://www.chathamjournal.com/weekly/business/bizcolumns/postal-rate-hike-70410.shtml

Shape-based pricing
The new prices also reflect differences in the costs of handling letters, large envelopes (flats), and packages. Instead of using an item’s weight as the primary factor to establish shipping costs, a size, thickness and weight combination will now become the standard. Essentially, mail items that are easier for the USPS to process will be rated lower than items that are not. Because of their shape differences, letters, flats and parcels will now all be priced differently because each is handled and processed differently. The proposed Shape-Based Pricing structure will significantly increase postage costs for various types of mailing applications. It also means there are going to be changes to how mail is processed.

Shape-Based Pricing is a form of dimensional weight. It promotes the use of easily sorted postal flats as well as high-density packages. On the other hand, it penalizes shippers of larger, lightweight packages.

The effects of Shape-Based Pricing will impact all mailers to one degree or another. Just how much will be determined by the type and volume of mail pieces sent. Small volume mailers will need to manually measure the size and thickness of their letters and flats to ensure proper postage is applied. Mid- to high-volume mailers will need to utilize some form of automation to help apply proper postage and keep the mail stream efficiently flowing. The bottom line is that all mailers will now need to be conscious of the size, thickness and weight of their mail pieces if they expect to save money and maintain productivity under the new structure.