MTAC (the Mailers Technical Advisory Committee) meets quarterly with the Postal Service, this is the venue where USPS generally unveils upcoming changes. And this past one was a doozy!
Rates
Mailers who grew their volume in 2024 were able to get a 30% discount on the volume growth, they got a good deal. In fact, First-Class mailers who participated saved a total of $153 million! And Marketing Mail participants saved a total of $381 million. If you enjoyed some of those savings, be sure to thank your fellow mailers – because that’s who’s paying for it.
For some time now, the Postal Service has been projecting a rate increase of about 7.8% in July 2025. Because of the revenue forgone on the growth incentive, USPS now finds themselves with a lot more rate cap authority – and it seems they plan to use it. You should now expect Marketing Mail and Nonprofit rates to rise about 11.6% in July – 13.6% if you’re mailing flats. First-Class wasn’t impacted as much – expect an increase of about 8%.
The Postal Service is also pursuing another incentive for catalogs. A discount of 10% has been floated, although a final number has not been officially announced. “Double digits” were the words used. And this incentive is coming fast- as early as September 2025. It’s an easy one, too. Just check a box on your eDocs if you are mailing catalogs. We expect a huge participation in this program – and an increased rate cap for USPS in July 2026.
One last item is not exactly about rates, but it will have a big impact. Plans were announced for Marketing Mail and Nonprofit mail to be zone-priced – the further you send it, the more it costs. No details yet as to when this could take effect, what the zones will be, or the differential. This is likely to be a Very Big Deal.
Preparation and Entry
A couple of interesting changes are expected as far as mail preparation is concerned. First-Class mailers will be able to obtain a SCF pallet discount. A little nerdy, but the bottom line is some discounting for high volumes of First-Class Mail. This is not the same as a destination entry discount.
Speaking of destination entry discounts, the NDC destination entry discount (DNDC) is being eliminated on Marketing Mail and Nonprofit, encouraging mailers to enter mail deeper into the system at the SCF level. Where there is not enough volume to make an SCF drop practical, there may be a lot more Marketing Mail entered at origin, placing a bigger burden on USPS transportation, not their greatest strength.
Service Performance
To be more “precise,” service performance will be based on 5-digit Zip to 5-digit Zip, as opposed to the current service performance based on three digits. This makes it much more challenging to determine if something is “late.” There will essentially be a database of 5-digit to 5-digit pairs that you can access by API. As you can imagine, it’s a big database.
Knowing the service standard is not particularly important anyway, as the Postal Service has set lower thresholds for meeting service standards. Critical entry times have been made more complex as well, depending in many cases on the distance from one facility to another. If mail is dropped at a DDU more than 50 miles from the SCF/LPC that it reports to, the service standard is a day longer. So being on time or not will have less meaning, because of all the variables being built into the system.
At SnailWorks, we will continue to judge what is on time based on the current standards, as it has more meaning for trending. More important will be to measure the days in transit.
Slower, More Expensive, and More ComplexThese are some major changes we may be facing as an industry. They are real challenges for software companies and logistics providers, but in the end, just fudging around the edges for most mail owners. The most important thing for mail owners is postage rates. Participating in as many promotions as reasonable is one way to mitigate rising costs and maybe even boost response.
Slower, More Expensive, and More Complex
These are some major changes we may be facing as an industry. They are real challenges for software companies and logistics providers, but in the end, just fudging around the edges for most mail owners. The most important thing for mail owners is postage rates. Participating in as many promotions as reasonable is one way to mitigate rising costs and maybe even boost response.
Of course, most of what we have here are just highlights based on proposals, and not yet official. It is also oversimplified. Look for more details when the Postal Service submits its rate case in mid-April.