By Dale Buss
The new year arrives for publishers under the cloud of a 5.4 percent increase in U.S. Postal Service rates. But facing more demands to help their customers mitigate postal-cost pressures, the printing industry is stepping forward with more co-mailing, co-palletization and other programs.
"The rate increase is very significant in that it’s coming along with increases in paper prices," says Ned Kulka, marketing director for Publishers Press Inc ., a Shepherdsville, Kentucky, printer that handles press runs of 5,000 to a half-million copies.
This need for relief might even intensify throughout the year. "People are actually more concerned about the next increase right behind this one, because the next one may involve reclassification" of rates, says David Cardona, senior vice president of R.R. Donnelley ‘s magazine group, in New York City. Here is a selective look at some of the options printers are offering publishers:
Many printers offer this service, which is ideal for smaller publishers that don’t have the volume of titles going into any given postal facility to make the minimum pallet size of 200 pounds. In co-palletization, bundled magazines are grouped with others going to the same destination. They are placed on the loading dock and shipped when the pallet load reaches a predetermined size.
Publishers Press is a longtime leader in this technique, as are Quebecor World and Donnelley. American Press, the Gordonsville, Virginia, printer, offers co-palletization to customers of all sizes, although those with runs over 100,000 can typically palletize on their own, without having to combine on pallets. The service cuts costs by "a penny to a penny and a half" per copy, says Paul Grieco, vice president of sales. Banta is another company promoting co-palletization. Customer interest "really started to take off last year for us," says Kimberly Williams, president of the company’s Oak Brook, Illinois, division. "But the savings there haven’t been as significant as we’d like. The discounts that the postal system offered probably aren’t reflective of the savings that the postal system gets."
American Press is among those printers that in the next year or so intends to add a capability for co-mailing, which combines individual pieces of mail into new, better, presorted bundles. The mid-range to long-run printer, with runs averaging 140,000 per magazine, is considering a joint venture with similar printers to build a co-mailing facility somewhere on the mid-Atlantic seaboard."In order to do the kind of sophisticated mailing the big guys do," Grieco says, "it’ll have to be quite an investment, and we have to be judicious about it."
For its part, Banta now is turning hard to co-mailing. For national publications, net savings can range from 6 percent to 14 percent (including the cost of the co-mailing services), Williams says. Banta is trying to remove the obstacles to co-mailing to the small and medium-sized magazines that comprise the bulk of the printer’s client base. One such step is "dynamic pooling," so that publishers "aren’t locked into a rigid time frame," Williams says. Another is developing equipment that positions mailing labels flexibly "so that our customers don’t have to invest money to redesign their cover and template so they can co-mail."
Fry Communications invested several million dollars in one of the industry’s largest co-mailing systems at its headquarters in Mechanicsburg, Pennsylvania, says Steve Grande, assistant vice president of sales. Not only do customers benefit from what Fry promises is an 8 percent to 15 percent net savings from co-mailing, but more small and medium-sized publishers are becoming savvy to it. "It’s becoming a far more understandable and predictable process to them," Grande says.
Drop-shipping is a way to save money on postal rates by moving freight closer to its final destination without using the U.S. Postal Service. Presumably the money saved by avoiding the USPS zoned structure more than offsets the shipping costs. Banta is active here as well."Even for smaller publishers, we run them through a program each month that determines how to optimize their mail," Williams says. "It looks at what components should enter a postal system locally, which pieces should be drop-shipped deeper into the system, and so on."
Paper, Trim Size, Other Services
Cummings Printing has been helping publishers move to lighter-weight papers and reducing trim sizes, says Jack Cummings, president and owner of the Hooksett, New Hampshire-based printer. But the latest postal-rate increase "is like death and taxes," he says. "There’s just not a lot you can do to reduce the impact." Cummings continues to ponder establishing co-palletization and co-mailing for its customers. "But those aren’t things we’re doing now," he says. "It’s something you have to do to stay competitive, but it can be logistically difficult with short runs."
Others, such as Little Rock, Arkansas-based Democrat Printing , have been working to eliminate labor costs on the front end by helping magazine publishers perform more efficiently in pre-press operations. Now, Democrat is "gathering some prices on co-mailing" systems, says Jerry Butler, production manager. It’s also testing the possibility of drop-shipping via truck to pre-postal consolidation facilities. "There’s a slight discount available through that kind of consolidation," Butler says. "But it hasn’t been enough at this point to offset the cost of trucking to these consolidation facilities. And with the fuel surcharges that truck lines are getting right now, that doesn’t help."