Achieving Discounts -- New Numbers, Same Advice
Difference in Distance
Destination entry as a form of worksharing dates back only to the 1990s, but the underlying concept—rates which reflect that mail costs less to transport when it enters the postal system close to its destination—has been around just about since the postal system started.
Zoned rates, such as those for Periodicals and most expedited mail and package services, are based on distance; mail that is addressed to a place closer to where it’s mailed is charged a lower price than mail that the Postal Service has to transport a greater distance.
Destination entry moves the mailer closer to where the mail is going and, because that reduces postal transportation costs, earns the mailer a discount. The trick for the mailer is calculating the tipping point at which it makes financial sense to be a destination entry participant.
Perhaps the most important element is volume and density; preparing a truckload of mail for a single destination postal facility is, after all, much like a super-presort. Software can do the calculations and drive mail production accordingly. Like other forms of worksharing, destination entry is evolving. The Postal Service wants the mail entered at the same places where it’s concentrating its processing firepower, so as that matrix changes, so do the terms of the discount.
But, regardless, even if a truckload of mail can be accumulated, does the cost of moving it to a destination outweigh the value of any destination entry discount? Can intermediaries or less-than-truckload shippers be engaged to merge several mailers’ volume and make a discount possible? Perhaps more than with the other forms of worksharing, the basic equation is cost vs. discount. Nonetheless, the Postal Service continues to encourage mailers to consider destination entry and to offer rates adequate to make the proposition worthwhile, under the right circumstances.