What to Make of the July 2024 Postage Increases
From individual stamps to commercial mailing to commingling, the price required to send a piece of mail is on the rise. Over the past six months, the United States Postal Service, Postal Regulatory Commission, and a whole lot of stakeholders have proposed, discussed, and finalized a postage rate increase taking effect on Sunday, July 14, 2024.
Update (September 2024): The USPS has announced that it will not be taking advantage of its inflation-based price increase authority scheduled for January 2025. Prices will remain the same until July 2025. Read more about the update here.
A Tough Pill to Swallow
It’s a tough pill to swallow. Tougher yet considering that over the past three years, the USPS has raised Market Dominant postage rates five times. And as of Sunday, July 14, 2024, a sixth price increase came into effect, raising postage costs approximately 7.75% across all Classes.
So yes, it might be a tough pill to swallow. But it’s a necessary one meant to stabilize and facilitate a better system. Think of it like this—No other delivery service is required by law to serve nearly 167 million delivery points six days a week.
Does this make you feel any better about paying thousands more in postage each mailing? Does this ease the pain and anxiety of justifying this come budgeting time?
Probably not. The angst in the mailer community is palpable and justified. This was one of the biggest topics of discussion at the National Postal Forum in June. And the “why can’t this just be an email?” crowd will undoubtedly get louder.
We can empathize. It’s unfortunate—a necessary yet painful fix to a decades-long problem. And if it makes you feel any better, this is the final market dominant increase coming in 2024.
Highlighted July 2024 Price Increases
What’s changing? In short, everything. First-Class Mail, Marketing Mail, Letters, Flats, and so much more. Though Flats are the product seeing the biggest hike this July, each Class and product will see some change when the increases take effect.
There are many resources available to see the what, why, and how much pertaining to postage costs, and you can see the full price increases can be viewed on the USPS website. That said, here are just some of the ones that affect our clients.
A Quick Reference
Note: Prices differ on the targeting (5-Digit, 3-Digit, AADC, Mixed AADC) and work required (Automation, Non-Automation Machinable). This refers to how close mail gets to the final destination and ability to sort.
For quick reference:
5-Digit: The Delivery Address ZIP Code on all pieces is the same 5-digit ZIP Code (i.e., 60527, covering roughly 28,000 people in Willowbrook, Burr Ridge, and surrounding areas).
3-Digit: The Delivery Address ZIP Code on all pieces is the same 3-digit ZIP Code (i.e., 605x, referring to the Greater Fox Valley area/Western Chicago Suburbs).
AADC/ADC: An Automated Area Distribution Center (AADC) or an Area Distribution Center (ADC) sorts and sends mail for the same service area to the destination delivery unit (the local post office) where mail is put into delivery sequence for each carrier.
Mixed AADC/ADC: Mixed AADC/ADC means that the tray or sack has mail for multiple AADC or ADCs in an area. This adds time and expense to the process.
Automation: Mail designed and prepared in a way that allows facilities to read, process, and route a mailpiece with minimal involvement.
Machinable: Mail that meets labeling requirements but not automation requirements.
First-Class Mail
Generating the most revenue for the USPS of any mail classes, First-Class Mail includes correspondence, bills, statements, payments, and some advertising. From individual stamped pieces to national communications, this class offers a combination of integrity, visibility, priority, and cost.
The planned price increase for First-Class Mail is, on average, 7.755 percent, broken into the following:
Single-Piece Letters/Postcards: 7.674%
Presorted Letters/Postcards: 7.629%
Flats: 9.684
Outbound Single-Piece FCMI: 6.334
Inbound Letter Post: 0.567
Letters & Cards
Flats
Marketing Mail
Considered to be the cheapest way to send mass mail, Marketing Mail consists of seven product types: Letters, Flats, Parcels, High Density and Saturation Letters, High Density and Saturation Flats/Parcels, Carrier Route, and EDDM—Retail.
Following commentary and approval by the Postal Regulatory Commission, mailers—both commercial and nonprofit—can expect to see a 7.755 percent average increase on July 14 broken into the following:
Letters: 6.958%
Flats: 11.708%
Parcels: 7.790%
High Density and Saturation Letters: 7.327%
High Density and Saturation Flats/Parcels: 7.903%
Carrier Route: 9.918%
EDDM—Retail: 9.852%
Marketing Mail Letters
Marketing Mail Flats
Nonprofit Marketing Mail: Letters, Flats
A specific carve out within Marketing Mail, Nonprofit Marketing Mail is available to certain organizations authorized by the United States Postal Service. Allowing authorized nonprofits to mail at significantly reduced postage rates, price change percentages are generally required to match traditional Marketing Mail increases.
Entry Discount Changes
An overarching set of changes—and a source of healthy debate during the commentary period—the USPS is aiming to change discounts and price structures for mailers delivering Marketing Mail closer to the destination. As you’ll see in the images above or the full PDF price change guide, entry discounts are available for mail sent to DNDC and DSCF, referring to the following facilities:
Destination Network Distribution Center (DNDC): There are 21 DNDCs in the U.S. For this discount, you may choose to enter your mail at a destination network distribution center. The 21 network distribution centers in the United States handle mail for large areas
Destination Sectional Center Facility (DSCF): There are 350 DSCFs in the U.S. You can receive a greater discount by entering your mail at a destination sectional center facility.
Under the Delivering for America plan, much of the above information will be subject to change. For more information on what the DFA intends to do, click here. And for a deeper dive on how shipping to different entry points affect pricing, view this guide on Postal Explorer.
Conclusion
Following significant increases in 2024 and 2025, mailers can expect a small reprieve in 2026 as the USPS moves to a new retirement benefits system and the Retirement Rate Authority expires.
At Sepire, it’s our job to make your mailing easier. It’s why we built our CompliChain product, it’s why we’ve equipped our facilities with the tools needed to maximize discounts, and it’s why we hired one of the biggest names in the Postal Affairs space, Leanne Herman.
In the coming weeks, expect to see articles from us on how to navigate the world of mail post-price increase and what you can expect in terms of discounts and promotions in 2025. So be sure to follow us on LinkedIn and subscribe to our newsletter, because we’ll have some great content coming out soon.
And if you’re looking to discuss these rates or your next project, drop us a line today!