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How To Pre-Check Your Presort - Webinar Presentation

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At this session, we will be discussing items that you need to consider including rates, service standards, additional mail classes, contracting as well as tips on negotiating for the future. Since 2013, Postal Advocate Inc. has helped their clients save an average of 60% and over $49 million on equipment, fees and lost postage.

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How To Pre-Check Your Presort - Webinar Presentation

  1. 1. How To Pre-Check Your Presort
  2. 2. Background and Experience Speaker: Adam Lewenberg • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of 134,000 pieces of mailing equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Former Industry Co Chair- Boston Postal Customer Council and Mail Systems Management Association. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 17 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nations top accounts. March 6, 2019 2
  3. 3. What We’ll Cover: 1. How do Presort services work? 2. How do we get the best rates? 3. Do we have the best service levels? 4. What other classes of mail can be processed? 5. Tips on negotiating for the future 6. What are additional ways to save money? March 6, 2019 3
  4. 4. How Presort Services Work • Revenue split arrangement with the customer and the USPS® • Sort to the highest sort level possible and the USPS pays the difference in a Value- Added Rebate (VAR) – 150 Pieces+ to a 5 Digit Zip Code – 150 Pieces to an AADC (Grouping of 3 Digit Zip Codes) – 150 Pieces to a Mixed AADC (All other zip codes) March 6, 2019 4 Class Weight Single Piece Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Non Discounted Rate Letter 1 $0.500 $0.459 $0.428 $0.412 $0.383 $0.041 $0.072 $0.088 $0.500 $0.117 $0.076 $0.045 $0.029 Maximum Presort Service RevenueMaximum SavingsPostage Rate Typical Client Rate Final Rate Paid by Presort Service Client Savings Total Potential Presort Service Revenue Per Piece
  5. 5. How Presort Services Determine Rates • Higher volume mailers receive a larger % of the savings Items that determine your rate: • Mail volumes • Frequency of mailings • Where are the pieces going • Transportation costs to pick up your mail • Machine read rates • # of Presort providers in your area • Volume of mail the presort service is able to sort to a 5 digit vs. AADC. March 6, 2019 5
  6. 6. Savings get larger as items get heavier March 6, 2019 6 Class Weight Single Piece Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Non Discounted Rate Letter 1 $0.500 $0.459 $0.428 $0.412 $0.383 $0.041 $0.072 $0.088 $0.500 $0.117 $0.076 $0.045 $0.029 Letter 2 $0.650 $0.459 $0.428 $0.412 $0.383 $0.191 $0.222 $0.238 $0.650 $0.267 $0.076 $0.045 $0.029 Letter 3 $0.800 $0.459 $0.428 $0.412 $0.383 $0.341 $0.372 $0.388 $0.800 $0.417 $0.076 $0.045 $0.029 Letter 3.5 $0.950 $0.459 $0.428 $0.412 $0.383 $0.491 $0.522 $0.538 $0.950 $0.567 $0.076 $0.045 $0.029 Flat 1 $1.000 $0.799 $0.727 $0.644 $0.605 $0.486 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 3 $1.300 $1.099 $1.027 $0.944 $0.905 $0.786 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 5 $1.600 $1.399 $1.327 $1.244 $1.205 $1.086 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 7 $1.900 $1.699 $1.627 $1.544 $1.505 $1.386 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 9 $2.200 $1.999 $1.927 $1.844 $1.805 $1.686 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 11 $2.500 $2.299 $2.227 $2.144 $2.105 $1.986 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 13 $2.800 $2.599 $2.527 $2.444 $2.405 $2.286 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Maximum Presort Service RevenueMaximum SavingsPostage Rate Typical Client Rate Final Rate Paid by Presort Service Client Savings Total Potential Presort Service Revenue Per Piece
  7. 7. The Savings Can Add Up! • This is just an example: Presort rates can vary greatly by area, provider and client. March 6, 2019 7 Annual Letter Volume Typical Savings per piece Total Savings Annual Flats Volume Typical Savings Total Savings Combined Savings 50,000 $0.03 $1,500 5,000 $0.20 $1,000 $2,500 100,000 $0.04 $4,000 10,000 $0.20 $2,000 $6,000 250,000 $0.04 $10,000 25,000 $0.20 $5,000 $15,000 500,000 $0.04 $20,000 50,000 $0.23 $11,500 $31,500 1,000,000 $0.05 $45,000 100,000 $0.25 $25,000 $70,000 5,000,000 $0.05 $250,000 500,000 $0.25 $125,000 $375,000 10,000,000 $0.06 $600,000 1,000,000 $0.27 $270,000 $870,000 25,000,000 $0.07 $1,750,000 2,500,000 $0.30 $750,000 $2,500,000
  8. 8. How do we get the best rates? • Since rate change, First-Class Mail® single piece metered letters had a $.03 increase • The corresponding presort rates only increased by $.001-.005. This is $.025-.029 per piece in additional added presort value! – If your rates went up by more that $.005 your presort service is making more from your mail! March 6, 2019 8 Weight Ounces Prior to 01/27/19 New Rates 01/27/19 Increase % Increase Prior to 01/27/19 New Rates 01/27/19 Increase % Increase Prior Presort Savings Presort Savings Additional Presort Value Automation 5 Digit 1 $0.378 $0.383 $0.005 1.3% $0.470 $0.500 $0.030 6.4% $0.09 $0.117 $0.025 Automation AADC 1 $0.408 $0.412 $0.004 1.0% $0.470 $0.500 $0.030 6.4% $0.062 $0.088 $0.026 Automation Mixed AADC 1 $0.424 $0.428 $0.004 0.9% $0.470 $0.500 $0.030 6.4% $0.046 $0.072 $0.026 Presorted (Non Automation) 1 $0.458 $0.459 $0.001 0.2% $0.470 $0.500 $0.030 6.4% $0.012 $0.041 $0.029 Weight Ounces Prior to 01/27/19 New Rates 01/27/19 Increase % Increase Prior to 01/27/19 New Rates 01/27/19 Increase % Increase Prior Presort Savings Presort Savings Additional Presort Value Automation 5 Digit 1 $0.474 $0.486 $0.012 2.5% $1.000 $1.000 $0.000 0.0% $0.53 $0.514 -$0.012 Automation AADC 1 $0.632 $0.644 $0.012 1.9% $1.000 $1.000 $0.000 0.0% $0.526 $0.514 -$0.012 Automation Mixed AADC 1 $0.705 $0.727 $0.022 3.1% $1.000 $1.000 $0.000 0.0% $0.368 $0.356 -$0.012 Presorted (Non Automation) 1 $0.799 $0.799 $0.000 0.0% $1.000 $1.000 $0.000 0.0% $0.295 $0.273 -$0.022 Commercial Letters Single Piece Metered Letter Flats* First-Class Mail® Single Piece Flats
  9. 9. Invoice Review – Calculate Your Rate • Metered mail rate – What do you post a 1-ounce piece of mail going to the presort service? • +/- Fee or Refund per piece provided by the presort service. • + Average additional fee charged per piece. You need to look at any miscellaneous fees tied to the piece (Reject Fees, processing fees, pickup fees, etc.) and divide them by the total monthly pieces to get an average piece rate. • Example: 2000 letters per day – Metering Mail at the Mixed AADC rate of $.428 – Charged $.012 per piece for presorting – Charged $.01 per piece for a mail reject fee – Charged $20 per day for mail pick up. – Total Per Piece = $.45 + $.01 ($20/2000 Pieces) = $.46 – Savings of $.04 per piece March 6, 2019 9
  10. 10. Presort Service Levels • Pick-Up Time – Do you have the best pick-up time? • Day Delay – What time is your mail entering the postal system? • Address Quality Issues – Does your presort service provide you with a report from their FASTForward® system so you can update your address records? • MPTQM Certifications – What level of certification does your presort service have? • Security Procedures – Is your mail being processed in a secure environment? Why is this important? March 6, 2019 10
  11. 11. What other classes of mail can be processed? 1. First-Class Mail® Flats ▪ Non-Handwritten pieces 7-12 oz. ▪ USPS does not offer the Value-Added Rebate (VAR) for flats March 6, 2019 11 TIP: Combine your letter and flat volumes when negotiating rates and determining eligibility Class Weight Single Piece Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Presorted (Non Auto) Auto Mixed AADC Auto AADC Auto 3 Digit Auto 5 Digit Non Discounted Rate Flat 1 $1.000 $0.799 $0.727 $0.644 $0.605 $0.486 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 3 $1.300 $1.099 $1.027 $0.944 $0.905 $0.786 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 5 $1.600 $1.399 $1.327 $1.244 $1.205 $1.086 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 7 $1.900 $1.699 $1.627 $1.544 $1.505 $1.386 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 9 $2.200 $1.999 $1.927 $1.844 $1.805 $1.686 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 11 $2.500 $2.299 $2.227 $2.144 $2.105 $1.986 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Flat 13 $2.800 $2.599 $2.527 $2.444 $2.405 $2.286 $0.201 $0.273 $0.356 $0.395 $0.514 $0.313 $0.241 $0.158 $0.119 Maximum Presort Service RevenueMaximum SavingsPostage Rate Typical Client Rate Final Rate Paid by Presort Service Client Savings Total Potential Presort Service Revenue Per Piece No VAR for Flats – Must meter at the correct rate and charge an invoice for the service fee.
  12. 12. What other classes of mail can be processed? 2. Marketing Mail ▪ Based on destination entry discounts earned by moving mail closer to the final destination ▪ Presort service gets the mail to the right Destination Network Distribution Center (DNDC) or Destination Sectional Center Facility (DSCF) March 6, 2019 12
  13. 13. What other classes of mail can be processed? 3. International Mail – Many presort services will have partnerships with international mailing services. Here are the most common models: • Drop ship mail to the origin country’s postal system for reduced rates • Use discounted USPS services to send international mail. 4. Package Services – This is the fastest growth segment and many presort services are starting to offer. • Move packages closer to their final destination to be able to take advantage of local zones • Use lower priced services such as Parcel Select and vs. Priority Mail and have the USPS deliver the “Final Mile” where they have the best rates and services. March 6, 2019 13
  14. 14. Tips for saving money • What can you do to make your mail easier for the presort service that can get you better rates? – Earlier pickup times – Next day dating vs. same day – Less frequent pickups – Higher volumes of mail – More classes of mail on a single pickup – Letters, Flats, International, Packages – Cleaner mail – Less handwritten, validation process of your addresses. • What other services can your presort service offer? – Metering mail – Mail fulfillment – Printing and preparing mail • Review your rates annually with each USPS Increase March 6, 2019 14
  15. 15. Additional Ways To Save Money • Gain Visibility to your Mail – The only way to save is to improve your visibility to your mail: – What you are sending – Quantity, Frequency, Mail Types, Mail Issues – Access to Presort Service Vendor Portal – Review weekly/monthly invoices – Compare billing to contract terms • Consider Barcoding Yourself – Simple software can allow you to comply with postal rules. • Look at Your Outsourced Mailings - Many of these mailings may be going through a presort service. Can you use your own contract for presort to get the biggest discounts. • Consider Your National Footprint – Can you use presort at locations currently full rating their mail? • Run an RFP For Presort Services – To make sure you are getting the best rates and service levels. • Outside Expertise – To find savings that may have been missed. March 6, 2019 15
  16. 16. Summary • Presort is the best and easiest way to save money on postage. • It is important to understand how Presort Services work, thresholds, revenue and savings. • Visibility is key to optimizing the category. • Multiple mail classes, locations, and service offerings can expand the savings opportunity. • There can be huge variances in the mail rates clients receive. • Outside expertise can optimize this category and manage the detail for the future. March 6, 2019 16
  17. 17. Upcoming 2019 Webinars March 6, 2019 17 Register at www.postaladvocate.com Upcoming Webinars Date Time Enterprise PC Postage - Round 3 - PC Postage vs Postage Meters - The Evolution of Mail April 11:00AM EST Top 10 Ways for Enterprise To Save on Mail Cost May 11:00AM EST Top 9 Ways To Recover Lost Postage June 11:00AM EST FASB - The New Standard and Gaining Visibility to Your Mailing Fleet September 11:00AM EST Top 10 Ways To Manage Enterprise Mailing Spends Across the Enterprise October 11:00AM EST Everything You Need to Know When Buying Mail Equipment November 11:00AM EST Budgeting for the 2020 Rate Change December 11:00AM EST
  18. 18. Helping multi-location organizations streamline their mailing costs Over 134,000 pieces of equipment, managed by Postal Advocate Recovered over $12,000,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $49,000,000 IN CLIENT SAVINGS $1.5M 60% Average Client Savings Average Equipment Savings HOW WE DO IT • 230+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit www.postaladvocate.com or call (888)977-MAIL(6245)
  19. 19. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit www.postaladvocate.com or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT
  20. 20. Contact info: (20pt) March 6, 2019 21 Questions? Contact: Adam Lewenberg - President 888-977-MAIL X 501 adam.lewenberg@postaladvocate.com
  21. 21. March 6, 2019 22

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