Postal Action Alert: PRC Approves USPS' 2024 Mail Volume Growth Incentive

10/30/2023 Robert Lindsay

On September 27, 2023, the Postal Regulatory Commission (PRC) approved the U.S. Postal Service (USPS) service request (filed on August 11, 2023) to make Mail Classification Schedule (MCS) changes to establish two distinct Mail growth incentives — a First Class Mail Growth Incentive and a Marketing Mail Growth Incentive. The objective of the incentive is to encourage mail owners to increase qualifying First-Class Mail and Marketing Mail volumes in calendar year (CY) 2024.

The incentive will offer postage credits for incremental mail volume next year (January to December 2024) versus what a mail owner mailed in USPS fiscal year (FY) 2023 (October 2022 to September 2023). This can be illustrated by the following two examples:

1. If a mail owner had mailed at least one million or greater of qualifying mail pieces in USPS FY 2023 within a mail class, then qualifying mail volume mailed in CY 2024 within the same mail class that exceeds the USPS FY 2023 total would be considered incremental volume and eligible for a 30% postage credit. For example:
   • Qualifying mail volume was 1.5 million during USPS FY 2023
   • Qualifying mail volume was 2.0 million for CY 2024
   • Incremental mail volume is 500 thousand and therefore subject to a 30% postage credit
      
2. If a mail owner had mailed less than one million qualifying mail pieces in USPS FY 2023 within a mail class, then qualifying mail volume mailed in CY 2024 that exceeds one million within the same mail class would be considered incremental volume and eligible for a 30% postage credit. For example:
   • Qualifying mail volume was 800 thousand during USPS FY 2023
   • Qualifying mail volume was 1.3 million for CY 2024
   • Incremental mail volume is 300 thousand (1.3 million less minimum of 1.0 million) and therefore subject to a 30% postage credit

Mail growth postage credits are calculated independently by major mail class (i.e., First-Class Mail or Marketing Mail). They cannot be combined for the purpose of calculating incremental volumes. Qualifying volumes by major class and product are described below.

• First-Class Mail qualifying products
  • Presort letters
  • Presort cards
  • Presort flats
• Marketing Mail qualifying products
  • Letters and high-density / saturation letters
  • Flats and high-density / saturation flats and parcels
  • Carrier route
  • Parcels

Postage credits will be calculated by mail class using the following formula:

• (Average price for all CY 2024 qualifying products) x (Incremental volume over USPS FY 2023) x (30%)

Registration for each of the Mail Growth Incentives is expected to occur through a registration portal, which will be made available through the Business Customer Gateway (BCG).

As part of the registration, USPS will establish a mail owner baseline volume from USPS FY 2023. The mailer must record their agreement with this baseline volume and other conditions for participating in the incentive plan in order to receive postage credits. Postage credits will be issued to qualified mail owners after six months, nine months, and twelve months from the start of CY 2024 and will be able to be used on future mailings until December 31, 2025.

RRD Postal Affairs will continue to monitor the situation and provide important updates as they become available. For questions please reach out to your RRD Account Representative or connect with RRD's Postal Affairs office: RRD-PostalPromotions@rrd.com