1 Proprietary Information. Copyright 2007 Hasler, Inc. All Rights Reserved

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Overview

• On May 14, 2007, the United States Postal Service intends to implement a rate change and introduce a dramatic new way of determining the correct postage rate, called Shape-Based Pricing.

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Not A Normal Rate Change

Currently based on: – Weight

Will be based on: – Length– Height– Weight– Thickness

The USPS is not just changing the rates, but changing the classification structure as well!

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2-ounce letter63¢

2-ounce flat

63¢ 2-ounce parcel

63¢ ►58¢ ►97¢ ► $1.30

-7.9% +54.0%+106.3%

Postage will no longer be based solely on weight!

SBP Pricing Example

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Shape Based Mail Formats

Letter Flat (Large Letter)

Parcel

First Class

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Each Add. Oz. . .24¢

Each Add. Oz. .17¢

* Oversize surcharge of .13¢ for flats weighing 1 oz. or less, or letters that have non-machinable characteristics

* Oversize surcharge eliminated.

Current Rates May 14, 2007 Rates

1st Class Rates at a Glance

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Mail Processing Flowchart (First Class Example)

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Pay Attention To Shape

• Review designs of all current and planned mailings to ensure that they are cost effective using SBP requirements. For example:

– A 1 oz. 6” by 6” envelope’s aspect ratio (length divided by height, must be between 1:3 and 2:5) is 1.0, and is subject to the non-machinable surcharge of $0.17 (41 cents vs. 58 cents, a 41% increase).

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Fold and Save

• Unfolded pages inserted into flats will typically cost more.

– Reduce large envelopes when possible– Consider 6 X 9 envelopes or #10s.– Possible savings up to .56 per piece– Difference of .6 oz. between #10/Flat– Folding saves postage.

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Fold and Save

• Flatten and Save too!• Consider flats when smaller envelopes exceed ¾”• Possible savings up to .33 per piece

¾”+Less than ¾”

2oz.= $1.30

3oz. = $1.47

2oz.=$0.97

3oz. = $1.14

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Minimize Costly Flats

6 x 9.5”

+ = $0.80

2 Pages

Folded in ½ + = $0.41

9” x 12” Flat 2 Pages

49% Savings!

Thin Flat Reconfiguration Example:

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Think Thin

6” x 9.5”

+ = $0.97 - Flat Rate

9 Pages ½ Folded + = $0.58 - Letter Rate

6 Pages

40% Savings!

Thin Flat Reconfiguration Example:

#10 Envelope

6 Pages6 Pages6 Pages6 Pages

6 Pages9 Pages

Of 20lb. –

Over ¼”

6 Pages6 Pages9 Pages

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Top 10 Strategies to Survive Shape Based Pricing

Summary•Size Matters!!!

•Convert flats to 6 X 9s or #10s

•Be aware of and change/convert thick items when possible

•Guessing only leads to over/under posting, both of which mean wasted $