MAIL RATE PLAN FAVORS BAR CODES

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The latest round of proposed postal rate changes will have volume mailers saying goodbye to second- and third-class mail and hello to more bar codes and presorting.

Under a new proposal from the U.S. Postal Service, three classes of mail would be redesigned.

The changes are supposed to speed delivery by giving a break to high-volume mailers that prepare cards and letters for machine sorting and raising rates for companies that don't.

"The more you can bar code and pre-sort and the more highly automated you are, the better off you are," said Loren White, senior VP-marketing at the postal service. "The mailers who receive better rates are those who meet the requirements of automation categories."

Reaction to the proposals was lukewarm.

A spokesman for the Direct Marketing Association said his organization is leaning toward supporting the plan. But Jerry Cerasale, senior VP-government affairs for the DMA, said there are some pitfalls for association members. He said there could be a huge rate increase for those who can't meet qualifications for some of the new subclasses.

"For a good number of our members, this is a good proposal," Mr. Cerasale said. "But the postal service is not specific as to what all requirements are to enter into these new classifications. They said they wanted to work further with mailers on that."

Mr. Cerasale said the Postal Rate Commission might not accept the changes without knowing what the requirements are for entering into the new classes.

"The USPS hasn't laid those out," he said. "It could be problematic."

Under the proposal, which will be before the Postal Rate Commission March 24, letters would still be first-class mail but large mailers who bar code first-class letters would save about 2 cents more per letter than they do today. Those who sort letters but don't add bar codes would pay 2.5 cents more than they do now. Postcards would be 21 cents.

"If you are in first class, the worst that can happen is you pay 32 cents," Mr. White said.

Second-class mail would be split into a low-cost service called Publications Service and another for regular periodicals mail. Publications in the regular periodicals class would see their rates increase about 17%, while those in the lower-cost class would see a 14% decrease, postal officials said.

Mr. White said 55% of the mail volume could take advantage of the new lower-cost periodicals subclass.

To qualify for the lower-cost class, publications would have to bar code and pre-sort mail and send to subscribers that are located close together.

Third-class bulk mail, mostly advertising, would be called standard class and will have three subclasses of automation, enhanced carrier route and regular.

It's the enhanced carrier route that's appealing to Chris Rebello, director of postal affairs at Current Inc. of Colorado Springs, Colo.

In that subclass, rates will be about a penny lower than present and the lower pound rate of 51 cents would be offered to mailers.

Mr. Rebello, whose company polywraps its catalogs and doesn't take advantage of the automated rate, said the new rates are such that Current would have to figure out how to switch from polywrap.

"This will force a lot of mailers to get into automation," he said. "Some smaller companies will get hurt."

Mr. Cerasale said companies that don't pre-sort and bar code will be paying for the rate decrease of those that do.

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