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Postal rate hike looms

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The next postal rate case is expected to get under way next March or April, which means production managers will be adding higher mailing costs to their already overstuffed budgets when 2006 rolls around.

So what can be done to prepare for the challenges ahead?

"This is a critical point in the relationship between publishers and the postal service," said Charles Case, a veteran postal consultant to publishers. "They both really need each other, and they both could really hurt each other."

Case said the best ways the two groups can work together and save money is through co-mailing, in which different titles are labeled at the same time and shipped together, and co-palletizing, in which printers combine different titles on one pallet for mailing.

"The more publishers can eliminate using sacks, the better," he said.

All major printers now have in place co-mail and co-palletization systems. "Be sure yours is doing one of these," said Nick Mlachak, director of operations for the financial services group at Pfingsten Publishing. "Drop shipping is also an important component." In drop shipping, printers truck titles to different areas of the country and then drop them deep into the mail stream.

Michael Cohen, director of manufacturing and purchasing for Reed Business Information, suggested publishers start having conversations with their printers if they haven't already. "Identify areas of savings and investigate savings," he said. "Define impact to business, and start working with printers to implement changes from a strategic viewpoint."

Rich Zweiback, Lebhar-Friedman's corporate director of manufacturing, noted: "Most printer-publisher relationships are partnerships, and it's certainly in the printers' interests to save their customers money wherever possible. It's really something the printers have to do in order to remain competitive."

Co-binding, when two or more titles share the same saddle-stitching or perfect binding equipment at the same time, is also gaining traction with publishers.

One of the potential problems with these processes is that you have to depend on other publishers. If a publisher that shares your pallet is late, your titles have to wait, which is a huge issue to consider. "You're totally at the mercy of other publishers," Zweiback said, "and even in a perfect world, deadlines aren't always met."

Another potential problem is the lack of space on pallets for regional editions. "If you're a regional title at this point, you might just be out of luck," Mlachak said.

Case stressed the need for publishers to keep being creative when it comes to trimming costs. "There are always more ways to cut, and they can spend some time trying to figure out how to save the post office manpower hours," he said. "That's where the money goes. The more automated the system becomes, the better it will be for publishers financially."

Cohen agreed. "Expect the USPS to offer discounts where senders reduce manual operations or deliver mail deeper," he said.

Publishers should also explore alternate forms of delivery. Some have found hand-delivery systems within major metropolitan areas to be effective. United Parcel Service of America, FedEx and other delivery companies offer such services.

Another alternative publishers should investigate, Mlachak said, is sending digital editions of their titles. "Digital editions is an area that will keep growing, and publishers will keep being more interested in it because it's an inexpensive way to deliver content," he said. "So publishers should definitely look into that."

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