Arandell Corporation

Thank you for visiting the Arandell  Corporation blog. Your visit has just resulted in a $1 contribution to the Make-a-Wish Foundation of America. Our campaign will continue to run through December 15, so please be sure to invite your colleagues, friends and family to visit our blog.

Arandell Corporation wishes you a very Happy Thanksgiving…from our family to yours.

Jamie Marquardt, Director, Marketing & Communications

Have you heard that line before? If so, I hope you don’t accept it as your “final answer.” Just because something has always been done a certain way, that’s no reason to keep doing it the same way, unless of course the method has no room for improvement. And, I certainly hope you have not been applying the “because it has always been done that way” mentality to your catalog design. You can still maintain brand image while also changing up variables such as layouts, messages, formats, sizes, page counts, in-home dates, etc. In fact, you should be changing things up to measure how response rates fluctuate from one catalog design to the next.

Maybe you’re a cataloger who has always mailed letter-size booklets or “Slim Jims.” How has your response rate changed since the USPS implemented its new tabbing regulations earlier this year? If it has gone down, maybe it’s time to try something new, like a traditional upright format. Have you typically produced a catalog with an oblong format? With the USPS bringing out new Droop Test regulations, now is the perfect time to implement a new format for your catalog because the oblong is not going to survive with the new droop/deflection standards. Could you transition to an upright or square format? Try it! Have you always treated all customers, regardless of purchase history, the same? If so, maybe it’s time to use a more dynamic approach to how you target customers. Do you use database marketing to help you with those efforts? If not, it’s time.

all about ROI recently released its “50 Best Tips of 2009“; I highly recommend reading it, as it gives some great ideas for changing up your current multichannel marketing plan (or offering you reassurance for the one you already have). Regardless of what strategies you decide to implement going forward, don’t apply the same ones as this year just because “that’s the way it has always been done.” That’s a sure fire way to bring your success to a standstill. Change is good. Embrace it!

Blake Hutchison, Director of Purchasing

My Paper Prognostications for 2010

Gazing into the crystal ball, here are some things that I see coming in the New Year:

Supply:
Throughout 2009, seldom has a week gone by where we have not read about a sawmill closing, a paper machine being idled or a mill closing their doors. Supply is what paper mills can control the most, and to try to keep pricing in line with demand, they have taken a large chunk of capacity out of the system. The mills have also looked at their platforms and tweaked schedules to fit demand. In some cases, grades and basis weights that were run two to three times per month are now only run once, and some are only run once every six weeks. This has resulted in us seeing lead times and LDC dates push out to four to six weeks on some grades, where they had been only two to three weeks earlier in the year.

Inventories have been worked down to lower-than-normal levels, and I believe that paper mills are going to engage in rush inventory building or order pre-making due to their desire to have cash readily available and not tied up in inventory.

So, with reduced schedules and inventories and fewer machines making paper these days, I would watch for some LDC extensions for the next couple of months. I expect more mill downtime in the first and second quarters as demand decreases over the first half of 2010. If the second half of 2010 is busier than 2009, which I certainly hope it is, I expect longer lead times and potentially some tight markets, especially for SC grades. A key thing to remember is that it is not going to be as easy to get paper during the second and third quarters of 2010 as it was in 2009. Plan ahead.

Demand:
Demand estimates for coated paper in 2010 range from a 2% to 8% INCREASE over 2009 from what I can see. In speaking with the paper mills, a general consensus is that 2009 was horrible, but 2010 should see a small improvement; somewhere in the 3% to 6% range and this is what they are budgeting for. I believe they are hoping that the holiday season goes well and that companies will start to print again. I believe (and hope) they are right in their predictions.

Price:
The increase announcements that were to have taken effect in October never really materialized.  I believe that was more of an effort by the coated and uncoated producers to try to stop the pricing reductions of the second and third quarters more than trying to get more for their grades.

But, rest assured that there will be more increases coming in 2010. Several factors will lead to this, but the big factor is the elimination of the black liquor tax credit at the end of 2009. During the third quarter, U.S. paper mills that had pulping capacity took in almost $1 billion in tax credits from this program. In many cases, this helped the mills to go from red to black on the balance sheets. Well, that is going away. Input costs for the mills have been rising and this credit has been helping them weather the storm. Watch for an announcement sometime in January. That probably will not hold for long (if at all), but there will be at least $3.00/cwt worth of paper increases in 2010. Plan on it for the second half of the year.

If you have any questions, please just let me know!  Thank you again for your business!

BCC Software, a BÖWE BELL + HOWELL company and a leading developer of high-performance mailing technology solutions, announces that Arandell Corporation, one of North America’s largest privately held web offset printing companies, has joined the BCC family thanks to the comprehensive capabilities of Mail Manager Full Service™, BCC’s top-tier postal software product.

“We are delighted that Arandell Corporation has chosen to work with BCC Software as their postal solutions provider,” says BCC Executive Vice President Chris Lien. “We are constantly working to add new features and enhanced functionality to the Mail Manager family and all BCC products and services, to offer the best possible tools to drive the success of current and future clients.”

Mail Manager Full Service™ provides integrated support for the Full Service Intelligent Mail® barcode and delivers a comprehensive suite of USPS® CASS™ and PAVE™ certified presorting and list-management functionality including enhanced merge/purge and deluxe 24/7 automation capabilities, and a proprietary address-matching API that delivers dramatically higher processing speeds than the industry-standard USPS matching engine.

Founded in 1922 and based in Menomonee Falls, WI, Arandell Corporation provides high-quality printing, mailing, distribution, list management, data-based marketing strategies, education, logistics and consulting services to America’s premier custom publishers, catalogers and retailers. Arandell is on the cutting edge of ecologically preferred methods for conserving resources and protecting the environment with their production practices.

“Arandell Corporation is excited about our partnership with BCC Software. With challenges like rapidly-evolving market conditions and the ever-changing postal world, it is essential we partner with companies that allow us to stay ahead of the industry. We know that BCC’s products and services will meet those challenges, while also enabling us to maintain customer loyalty,” says Jim Willms, Arandell’s Vice President of Production Planning.

To read more about BCC Software, click here.

For additional information about Arandell Corporation, click here.

Don Landis, VP, Postal Affairs

Since John Potter’s (USPS Postmaster General) recent announcement that there will be no postal increase for 2010, I have been receiving a large volume of calls and e-mails from clients and prospects expressing their extreme delight over the issue. Mr. Potter made the announcement in mid-October that there would be no increase in 2010 for Market-Dominant Products, including Standard Mail, First-Class Mail, periodicals and single-piece Parcel Post. I was somewhat surprised at this decision based on the difficult financial situation facing the USPS, but hopefully, this move will be an encouragement for marketers to get back in the mail or to increase their current circulation. I have seen signs this may be happening as catalogers plan for their 2010 mailings. No postal increase makes that task a lot easier and less stressful.

Throughout the past couple of weeks, there has been some speculation as to whether rates could rise outside of a CPI increase or exigent rate increase. Please rest assured that the USPS has confirmed that there will be absolutely NO rate increase for Market-Dominant Products (again, Standard Mail, First-Class Mail, periodicals and single-piece Parcel Post) in 2010. So, lock in those marketing budgets now…no need to wait for additional postal rate updates from the USPS. Keep your postal budget as is and take advantage of this opportunity to increase your mailings to reach more prospects or to re-activate prior customers.

Questions? Call or email me any time!

Don Landis, VP, Postal Affairs

What is the Intelligent Mail Barcode?
The IMB is a new Postal Service barcode used to sort and track letters and flats; it expands the ability to track individual mailpieces and provides customers with greater visibility in the mailstream than the current POSTNET barcode.

When will the IMB be a requirement by the USPS?
Some printers and mailers have already started to implement use of the IMB, but it will not be mandated until May 2011.

Are there different types of the IMB?
Absolutely.

Basic Service: The Basic Service IMB is just like the existing POSTNET barcode, which is simply used for sorting mail.

Full Service: The Full Service IMB will include services such as tracking, free Address Change Service and Start the Clock.

What are the placement requirements for IMB?
The Intelligent Mail Barcode will be printed in the same place as the POSTNET barcode. On flats, the Intelligent Mail barcode can be placed anywhere on the address side as long as it is at least 1/8 inch from any edge of the piece.

Will I receive any sort of discount for applying the IMB to my mailpiece?
Beginning already in November 2009, mailers will start to receive a $1.00/M discount for electing to use the Full Service IMB on their printed pieces. By May 2011, those not printing the Basic or Full Service IMB will not receive automation discounts from the USPS.

Are printers ready to start applying the IMB?
Major printers and mailers started testing the IMB when it was first announced. Arandell started to apply the Basic Service IMB on some of its saddle stitching equipment in August 2009 and will continue to add the capability to all of its binding and mailing lines going forward. We’ll be ready to provide the Full Service option when USPS the discount becomes available in November.

How can printers ensure that they are applying a readable barcode?
The USPS tolerance expectations for the IMB are strict and if printers don’t meet those expectations, the USPS could immediately assess the mail owner (catalogers, retailers, publishers, direct mailers, etc.) for additional postage. The current compliance requirement is 70%, which means that 30% of your Full Service mailpieces could have non-readable Intelligent Mail Barcodes, but still pass USPS acceptance requirements. Do you want to take that risk, though? NO! If I were in a print buyer’s shoes, I would make sure that my printer/mailer of choice can ensure a high readability compliance. At this point in time, Arandell is being proactive by installing IMB evaluation systems on all of its production lines to ensure the IMB will exceed the USPS expectations. We are currently complying at 100%. I would not accept anything less.

Why is the USPS implementing the IMB?
The IMB is intended to benefit you just as much as it will benefit the USPS.

The IMB:

• provides more information than the POSTNET, but consumes no additional space on the mailpiece;
• allows for better marketing decision-making by encoding more detailed information about mailings;
• necessitates the printing of only one barcode on any mailpiece;
• gives mailers who utilize the Full Service option the ability to participate in multiple USPS service programs at no additional cost.

This is a very high-level FAQ about the IMB but hopefully it has you thinking about how this implementation will affect your company. For more technical information, you can click here or contact our Postal Affairs, reps, Don Landis and Susan Pinter at 800-558-8724 to answer any questions you may have.

Don Treis, CEO

It sure is hard to believe it’s already October 19 and we’re starting to think about the holidays!

Each year, as a way of embracing the holiday spirit and to show our gratitude, Arandell Corporation donates to the Make-a-Wish Foundation at year’s end. In the past, we have arbitrarily chosen the amount to be donated and this year we’re going to try to change things up. This year, YOU will be driving how much we donate. In fact, if you’re reading this blog post, you have already made an impact on the campaign.

For every unique hit that we receive on the Arandell Blog between today (October 19) and December 15, Arandell will donate $1 to the Make-a-Wish Foundation. We’ll be driving these hits by updating our blog posts even more frequently than we normally do. And not only do the blog posts appear here, they will also be linked on social media sites like Twitter, Facebook and LinkedIn.

Also, to thank you for visiting us and to prepare you for the year ahead, you can request a copy of our corporate calendar. Simply send an email to blogging@arandell.com with your name and mailing address and we’ll mail it directly to you.

Help us make this our most generous Make-a-Wish donation yet by visiting the blog from wherever you may be. The hits are based on IP address, so visit us from home, work or on the road. And don’t forget to forward the link to your friends and co-workers!

Our wish for you this holiday season is that the New Year brings you happiness, health and prosperity. On behalf of all of us at Arandell, we thank you for participating in this charitable giving campaign, and look forward to keeping you informed in the years ahead.

Blake Hutchison, Director of Purchasing

I recently read an article in Multichannel Merchant that detailed some ideas about how a cataloger can gain control of their paper spend for 2010 and how these ideas will always result in lower costs.  In reviewing these ideas, I found some of them to contain the truth, but not “the whole truth” as they say in court.  So I thought I would provide some perspective from a printer who supplies paper for many of our clients.

Idea #1:  Establish long term pricing now

Pricing levels have decreased some 20% YTD.  And while the buyers of paper have had the upper hand throughout the year, that will change in 2010.  The producers will be able to pass along some increases.

Printers have the upper hand when it comes to negotiating pricing caps.  When an end user is negotiating their prices with a mill (through a merchant), their only negotiating tool is their annual tonnage.  A printer has the ability to take the annual tonnage of all of their paper clients, combine them and use the whole as leverage with their mill partners, thereby increasing the paper buying power of their clients.  By being part of the whole, you can significantly limit your exposure to these increases.

Ideas #2 & #3:  Challenge your printer to reduce waste and use paper calculators

Paper waste is a natural part of the printing process. A printer is not only challenged on their waste factors by end users, but also by the industry as a whole.  The more they can reduce their waste factors, the better position they are in to reduce paper consumption costs.  A “paper calculator” is a very generic tool that some merchants have put together to try to challenge the printer on their waste and create an “in” with an end user. 

The printer knows their presses. They know the most efficient way produce a job on press.  They know what grades, basis weights, finishes and specific brands of paper perform the best on their presses.  They work everyday on ways to reduce paper waste factors.  Yes, it is important to consider waste.  But to use a very generic calculator to come up with tonnage numbers that really have no basis in reality is a good way to create contention. Trust me; the printer is doing their very best on your behalf.

Ideas #4 & #5:  Reduce your cover and text weights

Always a good thing to consider when looking for ways to reduce paper costs.  But BE CAREFUL.  It might not always be the best idea.  The USPS has just announced new “droop test” regulations that have a lot of end users scrambling to HIGHER basis weights in order for their pieces to pass the test.   

You also might want to consider how your printed piece will look.  As you decrease your basis weight, you are sacrificing opacity and creating “show through”.  Your printer should have plenty of printed samples of what downgrading in basis weight will look like.

Idea #6:  Ship rail

Remember the idea of combining purchases to leverage paper prices?  The same can be done with shipping costs.  The more paper you are ordering as a whole will dictate whether or not you are able to ship rail.  An end-user who prints three or four times annually only gets to combine those tons in a shipment.  But a printer who may have three or four other paper clients printing right around the same time can combine those tons and get them to ship rail.  A printer has the ability to forecast, well in advance, and is in a much better position to work with mills to achieve maximum transit cost savings.

Some other ideas not mentioned in the article:

• For those end users who purchase their own paper: pay close attention to your consumption reports. The leftover inventory that is listed on your report is REAL MONEY and should be utilized as quickly as possible. Make sure you work with your printer to find a home for it as quickly as possible.
• If an opportunity to use it isn’t readily available, work with your printer to get rid of the paper. They might have an opportunity to use it on another printing for another client and might buy it from you.
• Do you know what the storage and handling charges are at your printer? If not, you should. The storage and handling of paper is a real cost to a printer. If they aren’t supplying the paper, they are going to need to charge for those services.
• In many cases, if the printer is able to supply the paper, they will waive those charges.

Questions? Please feel free to contact me any time at 800-558-8724, ext. 165 or BJHutchison@arandell.com.

Don Landis, VP, Postal Affairs

The following was released from the Postmaster General this afternoon. Some great news for your Thursday afternoon!

For questions regarding this release or other postal issues, please contact Don Landis , Arandell VP of Postal Affairs or Susan Pinter, Director of Postal Affairs at 800-558-8724.

To Postal Service Customers:

Many of you have expressed concerns regarding mailing costs for 2010.  The tough economic climate has presented significant challenges to all of us and pessimistic speculation has suggested that postal prices could increase by as much as 10 percent.

As we begin a new fiscal year and as many of you, our business clients, are preparing your 2010 operating budgets, we want to end all speculation.

The Postal Service will not increase prices for market dominant products in calendar year 2010.

Simply stated, there will not be a price increase for market dominant products including First-Class Mail, Standard Mail, periodicals, and single-piece Parcel Post.  There will be no exigent price increase for these products.

This is the right decision at the right time for the right reason.  Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.

While increasing prices might have generated revenue for the Postal Service in the short term, the long term effect could drive additional mail out of the system.  We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace.  Changes in pricing for our competitive products-Priority Mail, Express Mail, Parcel Select, and most international products-are under consideration.  We expect to announce a decision in November.

We are committed to working with customers to find ways to grow the mail through innovative incentives like the Summer Sale and contract pricing.  Mail is the most effective means of communication and advertising and we will continue to work together to increase the value of the mail.  Mail is a smart investment for the future.

John E. Potter