Non-Standard-Size And Heaviertitles Could Eventually See Higher Postal Rates

Circulation Management, Sept, 2001 by Barbara Love

Publications with smaller circulations and limited ability to qualify for work-sharing discounts are bracing for the likelihood of larger-than-average postal hikes after the next rate case. Meanwhile, the U.S. Postal Service is conducting studies to determine whether higher rates will at some point also be proposed for those that don't run well on its most efficient sorting machines, including tabloids, digest-size tides, magazines weighing more than a pound, and some polybagged titles.

The USPS has cited the high costs of handling flats in general as a key reason for raising rates for the periodicals class as a whole. But magazines that can't be readily processed on its newer, more efficient fiats-sorting machines could also be hit with what amounts to a surcharge, although it is considered unlikely that this would happen in the next rate case.

The most efficient fiats-sorting machine--the AFSM 100, which handles 1,665 pieces per work-hour-is currently used only for standard-size flats. (The ESM 881 standard-size flats sorting machine, which preceded the faster 100, is also still in use at many facilities.) Non-standard-size tides and those over a pound are sorted on FSM 1000s, which process only 522 pieces per work-hour.

An independent study of a wide variety of flats was conducted by Arthur D. Little during February and March. Another study, focusing only on magazines of varying sizes and weights, was conducted by the USPS in Denver during July and August The results of these studies, expected this fall, will be used to determine which magazines can and can't be processed on the 100-and ultimately, which may have to pay higher rates.

Publishers with titles that may not make the cut say that there's good reason to worry. For instance, while most Conde Nast titles are standard-sized, all but The New Yorker have weights that average over two pounds, says Conde Nast director of distribution and postal affairs Howard Schwartz. "We're very concerned about handling rates going forward," he says. "Neither the FSM 881 nor the AFSM 100 can currently handle flats much in excess of a pound. It's an issue for us, big-time."

"We have to run on the 1000s now, and I'm absolutely worried that we could see higher rates somewhere down the line," seconds Joyce McGarvey, corporate distribution director, Crain Communications, which publishes numerous tabloids.

Publishers with non-standard titles want higher thresholds on the fast machines or an alternative that will increase handling efficiencies for these magazines. Some have representatives on The Periodical Operations Advisory Committee, which is providing the USPS with input on the marketing impacts of processing decisions. This is considered a step forward, since the USPS hasn't always sought such input in the past.

"In the past, machines have been developed without input from marketing people and mailers, so we're always fighting to get equipment jerry-rigged to handle the types of magazines that we produce," says Schwartz. "It took years to get a machine [the FSM 1000] that could handle magazines over one pound. And when the 1000 was designed and put in the field, it did not originally have a barcode reader, so magazines processed on it couldn't get automated flats discounts." (The USPS is now improving the 1000's efficiency by adding automatic-feeder and OCR capabilities.)

"As the USPS develops these machines, they have to be concerned about all mailers," maintains McGarvey. But the postal manager for a large printer says the USPS still has a way to go, when it comes to developing a customer orientation. "The new Postmaster General, Jack Potter, has said that this is the year that the USPS is going to get flats automated," he says. "But they seem to want the perfect flat. In a meeting, one USPS engineer said, 'We don't like polybags.' Hello! If this were any business other than the USPS, they'd be designing equipment to meet marketplace needs."

Indeed, the tests will also determine which types of polybagged issues can run on the fast 100 machines--a big issue for many standard-sized titles. Currently, all polys can run on the 1000, and a more restricted group of polys can run on the 881. Margaret Schneider, director of postal affairs, Reiman Publishing, which polybags every issue of its 12 magazines, says that she'll be among those closely watching this aspect of the test results.

There are signs that the studies may yield some good news on the polybag front, and maybe a bit more leeway for non-standard size and weight titles. "We think that [the 100] can handle more than we originally expected," says USPS manager of operations planning Ralph Moden, "We think that it might handle poly a little better, too." McGarvey says that she's heard feedback from the Denver study indicating that tabloids are running well on the 100. "But we'll have to wait to see the final test results," she adds.

"Productivity on the AFM 100 is three times greater, and that would suggest a rate change for [flats] that don't run on the 100," says the USPS's Moden. "Eventually, you may see some difference in rates to encourage people to use our more efficient equipment."