Master Manufacturer: How to Do a Co-Mail Analysis
• Administrative or setup fees are generic catch-all fees for managing co-mailing. They may or may not be insignificant. Either way, they need to be accounted for.
• Freight is the cost to ship the mailed copies to the post office. This figure varies depending on the method used. Even though the same number of copies, at the same weight and ad percent are being mailed, the printers’ plants are located in different parts of the country. They also use different pool destinations, therefore resulting in different freight rates. The important thing to verify is that the ad percent, weight and number of copies are the same.
Also, find out in advance if you are/will be co-mailing at the same facility where your magazines are printed. If not, you may incur additional freight for shipping your publications to a co-mail center.
• Fuel surcharge (FSC), or fuel-surcharge percent, is an
additional cost, calculated by multiplying the percentage against the freight costs.
Surcharges are temporary adjustments to cover unexpected fuel increases. As gas prices increase or decrease, the surcharge fluctuates. It goes away by either having prices return to the base level or by negotiating a new rate agreement.
Nowadays, the FSC does not appear to be going away. Instead of updating the fuel baseline every time a new agreement is used, mailers use the U.S. Department of Energy index for the national per-gallon average Retail On-Highway Diesel Price, which is updated each Monday. (You can find the index at: www.EIA.DOE.gov.)
It is interesting to note that the index’s base dates from 1981 when gas was priced at $1.25 to $1.29, and the FSC was 1.5 percent. Today, it hovers around 37 percent.
The FSC should be the same for all mailers, as it should be tied to the day that the sample issue was actually mailed.