This experiment provides additional per-piece discounts to co-palletized Periodicals that cannot be palletized currently because of volume and density.

Effective April 20, 2003, new discounts will be available for pieces in Periodicals mailings and mailing segments that are currently prepared in sacks that, as a result of co-palletizaton, are prepared on area distribution center (ADC) or sectional center facility (SCF) pallets and are drop-shipped to destination ADCs (DADCs) and destination SCFs (DSCFs).

For mail that otherwise would have been prepared in sacks under the original presort for the mailing (before co-palletization), a new per-piece discount of $0.007 would be available for bundles on ADC and SCF pallets entered at destination ADCs. For SCF pallets drop-shipped to destination SCFs, the new per-piece discount would be $0.01. The discounts do not apply to mail prepared on any other pallet level. While mailers will be expected to prepare pallets of at least 250 pounds, the new discount would be available for pallets weighing less than 250 pounds. Less than 250-pound pallets (except overflow pallets) would not be eligible for the existing pallet discounts (e.g., $0.015 for drop-shipped mail on pallets of 250 or more pounds).

Co-palletization will consist of bundles of mail that remain intact (before and after co-palletization) and are moved from sacks (before co-palletization) to either ADC or SCF pallets to be drop-shipped to the appropriate DADC or DSCF. Mail that moves from an ADC pallet before co-palletization (e.g., 250 or more pounds to an ADC) to an SCF pallet as a result of co-palletization would not be entitled to either of the new discounts.

The primary beneficiaries of this incentive should be smaller circulation publications, for which, in some cases, complete mailings are now in sacks. Some smaller portions of larger mailings (sometimes referred to as “residual” or “tail of the mail”), as well as smaller circulation versions, editions, and supplemental mailings of large circulation publications could also qualify under the experiment. The objective of the additional discount is to move mail from origin-entered sacks to drop-shipped pallets.

Detailed information on the application process, documentation, and data reporting can be found in the January 30, 2003, Federal Register. Application forms are available via email to jwalke13@usps.gov.

Box: Because mail prepared in sacks accounts for a disproportionate amount of the USPS’s costs for processing Periodicals, the USPS designed an experiment to test whether an additional discount would encourage the co-palletization of mail that would otherwise be prepared in sacks.