Barcoded flats discount is higher than expected - News: Postal

The governors of the U.S. Postal Service were planning to propose a special discount for pre-barcoded flats--oversized mail that includes magazines--by July 1, as this issue was going to press.

The discount recommendations range from 1.5 cents to 3.4 cents and were made to the independent Postal Rate Commission, which will review the request and then release its recommendations early next year.

The Postal Service wouldn't specify which kinds of pre-barcoded magazines would receive the biggest discounts. However, a 3.5 cent discount would be considerably higher than most people were expecting. And while many publishers probably can't make a 1-cent discount worth their while, a 3.5-cent break would make a considerable difference.

To qualify for the pre-barcoded flats rate, mailers have to assure that their magazines are machinable, that they are not pre-sorted to a carrier route, and that they carry a Zip + 4 PostNet barcode.

"As our technology develops in the future, we think that incentive can grow, depending on the level of savings we will receive," said Deputy Postmaster General Michael Coughlin, speaking to fellow postal governors at a recent meeting. For Flats automation, "we expect the industry response to be strong and to move us closer to our goal of a fully barcoded mailstream."

To accommodate all of the flats that mailers expect to qualify for the discounts, the Postal Service has awarded a $36.9 million contract to Martin Marietta Corp. to modify 523 flats sorting machines currently in use. The firm will install flats machines to scan magazines, catalogs and oversized letters.

In other Postal Service news, Coughlin had a less encouraging report for the Board of Governors on postal finances. "We are $450 million short of revenue plan so far," he reports, "and we expect that to be $700 million to $800 million by year's end. That, coupled with the Omnibus Reconciliation Act of 1990, will lead to a loss well over $1 billion this year."

In addition, on June 16, the Postal Service began to reward discounts for address-block barcodes printed on all letter mail. This is a departure from an original plan the USPS made that called for allowing these discounts only on mail destined for those areas wit the wide-area barcoding technology--about half of the United States.

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