Title: Direct Marketing Price
1Direct Marketing Price Service
Changeseffective January 11, 2010
2Agenda
- Direct Marketing (DM) Price Changes
- Product / Service Changes
- Reminders!
- Questions?
3Pricing Rationale
- Pricing must adequately reflect Canada Posts
costs to operate the postal service - Growing point of call network (gt 200k per year)
- Costs continue to rise
- Core earnings continue to fall rapidly
- Must reinvest in aging network infrastructure to
maintain long term sustainability - Keeping increases as low as possible while
offsetting cost pressures - Lowest rate increase over the last five years
- Moderate price increase, typically 1
4Price Changes
Addressed Admail
- Letter Carrier Presort (S/L)
- 1 cent increase to base price
- Residue increase of 2 cents
- Weighted average of 2.6 (4.0 in 2009)
- Letter Carrier Presort (O/S)
- 1 cent increase to base price
- Residue 2 cents increase on up to 500g weight
band - 2.5 increase on Up to 500g weight band (4.3
in 2009) - 1.9 increase on 500g to 750g weight band
(introduced in 2009) - 3.0 increase on 750g to 1.36kg weight band
(introduced in 2009)
5Price Changes
- Addressed Admail (contd)
- Machineable Mail (S/L)
- Maintain Machineable Mail prices to continue
customer conversion to Machineable Mail
presort (new Presorted Machineable Mail option
planned for January 2011) - 0-30g remains at 0.38 per item 1 cent (-2.6)
decrease in 2009 - 30g to 50g remains at 0.40 per item 1 cent
(2.6) increase in 2009 - Weighted average increase of 0 (-1.2 in 2009)
- Machineable Mail (O/S)
- 1 cent (1.8) increase up to 500g from 0.57 to
0.58 per item - Weighted average increase of 2.4 (0 in 2009)
6Price Changes
- Addressed Admail (contd)
- NDG (S/L)
- Weighted average increase of 2.2 (4.7 in 2009)
- NDG (O/S)
- Weighted average increase of 2.4 (introduced two
new weight bands in 2009) - Dimensional Addressed Admail
- Price increase on all categories Small, Medium
and Large items - Weighted average increase of 2.4 (2.5 in 2009)
- Small 2.6 increase (3.3 in 2009)
- Medium 2.7 increase (2.8 in 2009)
- Large 2 increase (1.9 in 2009)
7Example Typical Addressed Admail Customer
- Annual volume of 10.4M pieces, 100 LCP S/L, 0
50g
2009 2010 ? 09-10 Impact Impact
Total Postage Cost (LCP S/L 0 -50g) 3,830,000 3,934,000 104,000 2.7
LCP S/L ARP 0.368 0.378 0.01 2.7
1 increase
8Price Changes
- Addressed AdCard
- Weighted average increase of 1.2 (2.6 in 2009)
- Prices unbundled effective July 6, 2009, the
production and postage components will be
separated - Unaddressed AdCard
- Weighted average reduction of 0.4 (5.1 in 2009)
- Prices unbundled effective July 6, 2009, the
production and postage components will be
separated - Customers can use their annual volume discount,
as applicable - Business Reply Mail (BRM) and International BRM
- Increase to Annual Fee 4.2 from 600 to 625
(0 in 2009) - Increase of 2.8 to Domestic and Intl return
postage (2.4 in 2009)
9Price Changes
- Publications Mail
- Letter Carrier Presort
- One cent increase across all price points up to
500g - Four cent increase for items over 500g
- Weighted average price increase of 2.4 (3.2 in
2009) - Machineable Mail (S/L)
- One cent increase for items up to 50g
- Weighted average increase of 1.8 (1.9 in 2009)
- Machineable Mail (O/S)
- One cent increase for items up to 100g and
over 100g up to 500g - Discontinuing over 500g up to 750g weight band
due to low usage and manual processing
requirements (aligning to Addressed Admail)
10Price Changes
- Publications Mail (contd)
- Undeliverable Publications Mail (uPM)
- Three cent increase on per item fee from 1.05 to
1.08 or 2.9 - uPM Return Postage - overall weighted average
price increase of 2.4 - 0 to 100g and 100 to 200g 3
- 200 to 500g gt500g 7
- Increase in incremental weight charges for
gt500g 5 per kg
11Example - Typical Publications Mail Customer
- Annual volume of 3.5M pieces, 100 LCP National,
0 200g
2009 2010 ? 09-10 Impact Impact
Total Postage Cost / Impact (LCP) 1,580,000 1,615,000 35,000 2.2
LCP ARP 0.451 0.461 0.01 2.2
1 increase
12Price Changes
- Unaddressed Admail
- Overall weighted average increase of 2.0 (6.4
in 2009) - Basic category Weighted average increase of
1.5 (reflects impact of Transportation fees) - Non-contract prices 3.6 increase
- Contract prices 3.8 increase
- Premium category Weighted average increase of
3.4 (reflects impact of Transportation fees) - Non-contract 4.5 increase
- Contract 5.3 increase
- 33.3 reduction in Transportation Fees from 1.2
to 0.8 up to 50g (plan to incorporate fee
within the postage price over a three year
period)
13Example - Typical Unaddressed Admail Customer
- Annual volume commitment of 30M pieces, Basic,
weighing 0 50g
2009 2010 Impact Impact
Total annual postage cost / impact (excl. Transportation) 2,610,000 (_at_ 0.087 / piece) 2,700,000 (_at_ 0.090 / piece) 90,000 3.4
Total Transportation Cost / Impact 360,000 (_at_ 0.012 / piece) 240,000 (_at_ 0.008 / piece) -120,000 -33.3
Total postage cost / impact (incl. Transportation) 2,970,000 2,940,000 -30,000 -1.0
14Service ChangesJanuary 11, 2010
15DM Service Changes
Upcoming Equipment Changes
- Effective Fall 2009
- Combine container labels with Admail Delivery
Slip for both laser and thermal labels via the
new Business Desktop - Effective December 31, 2009
- The supply of Canada Post bags to customers for
use within Unaddressed Admail will be
discontinued - Effective January 11, 2010
- CPC will no longer accept Unaddressed Admail in
bags - Customers who continue to use bags after this
date will have their mailings refused upon
induction and will only be accepted once made
compliant
16DM Service Changes
- Recent product changes to support customer
transition include
- Effective June 22, 2009
- Extend use of Canada Post hard-sided containers
to all Unaddressed Admail customers - Allow Canada Post reusable plastic pallets for
use as a shipping unit when transporting
containerized Unaddressed Admail, Addressed
Admail, Dimensional Addressed Admail and
Publications Mail - Remove the requirement to sign a Memorandum of
Agreement (MOA) to access reusable plastic
pallets for Unaddressed Admail, Addressed Admail,
Dimensional Addressed Admail and Publications
Mail - Eliminate the 2 reusable plastic pallet usage
fee for Unaddressed Admail, Addressed Admail,
Dimensional Addressed Admail and Publications
Mail
17DM and TM Service Changes
- Recent Product Changes (contd)
- Adjust size of laser container labels within EST
to accommodate hard-sided container label holder - Allow nesting of hard-sided containers without
lids in monotainers (Level 1 only 50 fill
requirement), for Unaddressed Admail, Addressed
Admail, Dimensional Addressed Admail,
Publications Mail and Presort Lettermail - The new monotainer fill requirements for
Unaddressed Admail - must be at least 50 of the height of the
monotainer for mail destined within the province
of deposit and, - 75 of the height for mail destined outside the
province of deposit - The new container fill requirements for
Unaddressed Admail - at minimum 80 full if more than one container is
going to the same destination at the exception of
the last container
18Container alternatives within Unaddressed Admail
Options for Small to Medium size mailings
Flats Tub
Lettertainer
Customer supplied containers (boxes)
Flexipack pouch
Brick-piling
New Introduced Flexipack pouches in January 2009
for mailings prepared and deposited at a Delivery
Installation or consolidated in a City level (NPS
L2) Monotainer when only one Flexipack pouch is
destined to each Delivery Facility. Extended
use of Canada Post Hard-sided containers
(Lettertainers for Standard items and Flats
Tubs for Oversize items) to all Unaddressed
Admail customers. Reduced minimum brick-piling
height requirement from 500mm to 150mm (January
12, 2008).
19Container alternatives within Unaddressed Admail
Options for Larger size mailings
Customer supplied containers (boxes) on wooden
pallet
Canada Post reusable plastic pallets (free)
Hard-sided containers on wooden pallet
Nested hard-sided containers
Double-stacked Monotainers/Pallets
New Extended the use of Canada Post reusable
plastic pallets to Unaddressed Admail customers
(June, 2008) and extended the use of pallets as
shipping units when transporting mailings in
hard-sided containers (effective June 22,
2009). Removed the requirement to sign a
Memorandum of Agreement to access Canada Post
reusable plastic pallets and eliminated the 2
usage fee (effective June 22, 2009). Allowed
nesting of hard-sided containers without lids
when prepared in a direct to the Delivery
Facility (NPS Level 1) monotainer (effective June
22, 2009).
20DM Service Changes
- Bag Exit Addressed Admail Publications Mail
(December 31/10) - Bag Exit initiative currently underway within
Unaddressed Admail will be extended to
Publications Mail and Addressed Admail - Containerization options include brick-piling,
lettertainers and flatstubs - Eliminating bags as an option for mail
containerization will - Address employee health and safety issues
- Improve mail processing efficiency
- The supply of Canada Post bags to customers for
use with Publications Mail and Addressed Admail
will be discontinued on December 31, 2010 - Publications Mail and Addressed Admail will no
longer be accepted in bags effective January 10,
2011
21Alternatives for Addressed Admail Publications
Mail
Options for Small to Medium size mailings
Coming soon!
Brick-pile to Level 5 - Residue (conditions
apply)
Flats Tub
Lettertainer
Customer supplied containers (boxes)
Loose bundles at Retail
Brick-piling (Oversize items only)
January, 2008 - Reduced the minimum brick-piling
height requirement from 500mm to 150mm (Local)
and 300mm (Forward). Coming Soon! - Accept loose
bundles (double-strapped or shrink-wrapped) and
no minimum fill requirement will apply when only
one hard-sided container is deposited at a rural
post office or retail counter. Coming Soon!
Extend brick-piling to Level 5 (Residue) when NDG
or LCP Publications Mail items (O/S) do not fit
in the current Flats Tubs.
22Alternatives for Addressed Admail Publications
Mail
Container options for Larger size mailings
Canada Post reusable plastic pallets (free)
Hard-sided containers on wooden pallet
Double-stacked Monotainers/Pallets
Nested hard-sided containers
New! Introduced Canada Post reusable plastic
pallets to Addressed Admail and Publications Mail
customers in January 2008 and extended the use of
pallets as shipping unit when transporting
mailings in hard-sided containers (June 22,
2009). Removed the requirement to sign a
Memorandum of Agreement to access Canada Post
reusable plastic pallets and eliminated the 2
usage fee (June 22, 2009). Allowed nesting of
hard-sided containers without lids when prepared
in a direct to the Delivery Facility (NPS Level
1) monotainer (June 22, 2009).
23DM and TM Service Changes
- Machineable Mail testing enhancements Provides
customers with 3 windows of opportunity to
assess/test mail piece during the
creative/production process
- 1. Early Stage Assessment Machineability Test
- Customers can refer to a checklist, available on
the Canada Post website, to help ensure the
machineability of the mail piece during mail
piece creation - 2. Mid-Stage Assessment Machineability Test
- Customer can submit an electronic sample of their
mail piece by leveraging the CSN as a single
point of contact - CSN (Mail Standards and Testing, as required)
conduct an assessment and provide feedback to
customer including opportunities for improvement - Turnaround time approximately 48 hours
- 3. Final-Stage Assessment Readability Test
Final Mail Piece - The existing assessment of 200 identical samples
remains - CSN will be the single point of contact with the
customer - Turnaround time reduced from 5 days to 3 days or
less
24DM and TM Service Changes
- Increasing Machineable Mail (S/L) Acceptance
Sites / Locations - Currently seventeen (17) published and approved
RVUs accepting Machineable Mail (S/L) - Effective January 11, 2010, four new induction
locations (from 17 to 21) will be added to the
approved / published list - Toronto Bulk Mail Facility (BMF) - Gateway
- Toronto West Letter Processing Plant - Gateway
- Kitchener
- Thunder Bay
25DM and TM Service Changes
- Address Accuracy Changes
- The Statement of Accuracy (SOA) changes include
- SEPR software will identify / flag any rural or
apartment addresses with missing delivery address
components - Apartment addresses with missing apartment number
information will be identified as Questionable
Apartment Addresses - Rural addresses with missing key address
components such as an RR will be identified as
Questionable Rural Addresses - Rural and apartment types have high instances of
undeliverable mail - If customers choose to update their lists they
can either correct the Questionable addresses
or remove them from the mailing list - Note the Questionable Addresses will not
impact the Address Accuracy percentage
26DM Service Changes
- Allow Repositionable Notes on S/L and O/S
Machineable Mail - Addressed Admail (including AdCard) and
Publications Mail - Option extended to Machineable mailings at no
additional fee - To be acceptable, the repositionable note must
- Meet maximum dimensions of 3 x 3 (size
restriction applicable to Machineable Mail only) - Be applied by machine (not manually)
- Not show any fluorescence or phosphorescent
printing - Meet the Postal Standards
27Heads-up to DM and TM Customers
New Business Desktop Launch Fall 2009
-
- Provides a modernized platform using industry
standard technology to enable Canada Post to grow
and adapt the application - Usability enhancements include a more intuitive
application and a simplified and streamlined
end-user experience - Improved user workflow to complete Orders
- Context sensitive help
- Combine container labels with Admail Delivery
Slip for both laser and thermal labels - Convenient mailing functionality such as
folders, templates and wizard tools to import
and manage mailing - Flexible reconciliation process, and
- Reliable integration for multiple users
28 Reminders!
29Reminder!
- Plant Receiving Re-engineering - LCP Addressed
Admail and Publications Mail - Mailing Plan File
Import and Container Label Requirements - Reminder of important requirements effective July
20, 2009 - The Mailing Plan must be uploaded into EST for
LCP Addressed Admail and LCP Publications Mail
mailings. - The barcode or associated human-readable data
must be included on containers labels and tie on
bag tags for LCP Addressed Admail and LCP
Publications Mail. The new barcode and
human-readable data is also required on all
monotainer and pallet labels if brick-piling is
the method of preparation used. - The label size has been modified to accommodate
the changes to the container label
specifications. New container label
specifications are available at
canadapost.ca/tools/pg/labels - Surcharges applicable to non-compliant items have
been deferred to January 11, 2010
30 QUESTIONS? THOUGHTS? SUGGESTIONS?