A Bad Move for Small Mailers: Postal Expert Questions Move Update Surcharge

Despite price caps and promises of a rate freeze, the U.S. Postal Service is about to implement a new form of price gouging that will hit small organizations especially hard.

As guest columnist Robert W. Mitchell explains below, Standard Class mailings that aren't Move Update-compliant are slated to pay a surcharge of 7 cents for something that costs the USPS barely a penny.

Large mailers will presumably have the expertise to avoid the surcharge, which took effect yesterday, by complying with Move Update — though a PostCom podcast indicates that even sophisticated mailers may unwittingly run afoul of the new regulations. (The USPS also has a website explaining Move Update.)

The main victims are likely to be small businesses, local nonprofit groups, churches and the like, who in many cases won’t learn of the surcharges until after their mailings have been printed and prepared. Mitchell points out that the surcharge is immense relative to costs, and is out of line with the principles of efficient rate setting.

Mitchell knows of what he speaks. First as a USPS employee, then as special assistant to the Postal Rate Commission, and now as a consultant on postal-rate issues, he's played a major role in such innovations as Standard Class workshare discounts and the move toward cost-based rates for periodicals. He can be reached at robertwmitchell@comcast.net.

This article originally appeared in the Dead Tree Edition blog on January 3.

For a number of decades, mailers wishing to send at Standard rates have engaged in preparation activities. In the spirit of worksharing and cost recognition, many of these have been optional, which, without causing harm to the Postal Service, has allowed mailers to choose what's best for them. Observers, including the Postal Service, have pointed often to increases in efficiency thus brought about. Examples have included ZIP + 4 coding, presorting, prebarcoding, walk sequencing and dropshipping. Cost differences among letters, flats and parcels have been recognized in the rate structure as well.

When Move Update services became available, another workshare option could have been arranged. That is, based on lower costs to the Postal Service, a discount for Move Updating could have been offered. Then mailers could have weighed the costs and the benefits, as they saw them, and Move Updated whenever advantageous. That would have allowed mailers the option of purchasing UAA (Undeliverable As Addressed) services at an appropriate price. And UAA services, which the Postal Service has spent years developing, would be put on par with its other services, which include sorting, transporting and delivering.