In the wake of a decline in the number of pieces of mail delivered last fall because of the recession, terrorist attacks and anthrax scare, the U.S. Postal Service recently raised rates by an average of 8.7%.

Larry Turner, president, Francotyp-Postalia Inc. suggests corporate purchasing managers consider the following strategies for controlling postage costs:

• Control rate change upgrade costs. Most postal equipment suppliers offer rate change insurance programs that can offset the cost of implementing upgrades. For instance, if a supplier charges $150.00 per rate change upgrade, but the insurance costs only $8 per month, the cost of this year's upgrade would be $96 instead of $300.
  As much as the cost savings, the convenience benefits make rate change insurance especially attractive. In the event of a rate change, the supplier automatically ships out a new rate chip for easy installation by the customer.
• Consider equipment upgrade. Not all scales need new chips when a rate change occurs. New equipment allows users to download new rates via modem embedded in the scale or attached meter. While the cost of downloading new rates is usually comparable to the cost of a new chip, rate change insurance programs cover the expense similarly. Downloading rates by modem is fast, easy to manage, and eliminates the possibility of damage to the scale or meter during chip installation.
  Turner says buyers should check the scale to be sure it's registering the exact correct weight for a sampling of mail pieces. "If it adds a second ounce to a one-ounce letter, and your company mails 5,000 pieces of mail per month, the scale could be wasting more than $1,000 a month in postage. On the other hand, if the scale registers mailpieces underweight, you risk delays or even worse: Mail may arrive at its destination with postage due."
• Take tighter control of mail center accounting. Postal expenses do not have to come out of a general administrative budget. Postage can be billed back to each department instead. Most postage meters offer some form of tracking expenses by department code.
  Tracking postage helps reduce the impact of postal rate changes on the mail center budget, and preserve those funds for equipment, staffing and operational expenditures. Combining the meter's functionality with software packages for mail center accounting provides a clear picture of a company's mailing demands. Reporting tools help identify the typical weights, quantities and destinations of outgoing mail, information which can help when upgrading equipment.
• Take advantage of presorting discounts. Presorting and barcoding mail helps lower rates further. Addresses with the Delivery Point SIP code and barcode are eligible for substantial automation mailing rate discounts. Using CASS-certified (Coding Accuracy Support System) software available from many suppliers, users can check their address list to ensure the addresses are correct, making delivery more efficient for the postal carrier and eliminating wasted postage on mailings to nonexistent addresses. Once each address in a list is verified the software adds the correct 11-digit Delivery Point Zip code and corresponding barcode.

The result of implementing presorting procedures can have a dramatic impact on the cost of each mailing. Current first class rates run 34 cents for the first ounce and 23 cents for each additional ounce. For a 10,000-piece mailing, presorting, CASS certification, and bar coding could save the mailer approximately $1,400.