Alliance Alert – We Fight for Lowest Combined Cost for Mailers

July 17, 2025

Dear Alliance Members:

The Alliance of Nonprofit Mailers joined several other excellent associations to urge the Postal Regulatory Commission and the United States Postal Service to price the upcoming zoned USPS Marketing Mail to achieve the lowest combined cost between the private and public sectors. This will benefit the agency and the mailers, enabling more volume to stay in the mail. We endorsed the expert testimony of esteemed Northwestern University Professor John C. Panzar in support of Efficient Component Pricing.

Professor Panzar summarized his testimony:

The purpose of these Comments is to respond to the Postal Service’s proposal introducing zoned pricing for presorted, origin-entered Marketing Mail. My analysis can be summarized as follows. First, the introduction of zonal pricing creates an opportunity to improve efficiency by better aligning prices to cost. This is made possible by reducing cost heterogeneity within product categories. Second, the proposed zonal pricing structure makes it straightforward to implement Efficient Component Pricing (ECP) by setting zonal dropship discounts equal to zonal avoided costs. Third, the Postal Service’s proposal refuses to recognize the workshare relationships that are inherent in the zonal pricing structure. That is, USPS’s zonal pricing proposal categorically exempts discounts for dropshipping mail to the destination sectional center facility (DSCF) from ECP rules. Fortunately, it should be straightforward for the Commission to apply ECP principles within the new zonal pricing structure proposed by the Postal Service.

Back on June 11, the USPS gave us advanced notice of their plan to make product changes effective in January 2026:

The United States Postal Service proposes to make a series of material changes to the Mail Classification Schedule (MCS) for First-Class Mail, Marketing Mail, and Periodicals pursuant to 39 C.F.R. § 3040.180 et seq. Specifically, the Postal Service proposes to do the following:

1. Introduce new zoned pricing for presorted, origin-entered Marketing Mail letters, flats, and parcels in all products except for Every Door Direct Mail— Retail (MCS §§ 1205.4, 1205.6, 1210.4, 1210.6, 1215.4, 1215.6, 1220.4, 1220.6, 1225.4, 1225.6, 1230.4, and 1230.6).

2. Align Outside-County Periodicals prices with Marketing Mail prices by introducing zoned pricing for origin-entered pieces, eliminating bundle and container prices, and introducing simplified container discounts (MCS §§ 1310.4, 1310.6).

3. Eliminate duplicative ADC sortation rates for First-Class Mail, Marketing Mail, and Periodicals and clarify rate table labels by substituting “3- Digit” for “ADC,” “AADC,” and “SCF” and substituting “Mixed” for “Mixed ADC” and “Mixed AADC” (MCS §§ 1110.3, 1110.5, 1115.2, 1115.3, 1115.5, 1220.4, 1220.6, 1225.4, 1225.6, 1230.4, 1230.6, 1310.4, and 1310.6).

4. Eliminate NDC presort discounts for Marketing Mail Parcels, as the Postal Service has eliminated NDC entry and NDC dropship discounts because it no longer intends to process mail in these facilities. (MCS § 1230.6).