As part of its proposed May 2007 rate change, the United States Postal Service (USPS) will introduce Shape- Based Pricing, one of the most dramatic postage structure changes in years, Business Wire reported. The initiative is being implemented as a way for the USPS to better align postage rates with its mail processing costs, and its implications for mailers are expected to be two-fold.

First, there will be a significant increase in postage costs for various types of mail pieces – in some cases 30 percent to 90 percent; and secondly, it could significantly change how a company processes its mail. In addition to the Shape-Based Pricing initiative, traditional first class postage is expected to increase nearly 8.5 percent – to US$ 0.42 up from US$ 0.39.

Currently, the USPS primarily uses a weight-based method to determine postage costs for letters, flats and parcels. With mail processing costs rising, and with the need to encourage customers to prepare mail in ways that increase efficiency for USPS processing methods, the Shape-Based Pricing initiative moves from a pure weight determination factor for postage costs to one that combines size, thickness and weight.