MAILERS VOW TO MAKE USE OF ACCELERATED REPLY MAIL

MAILERS VOW TO MAKE USE OF ACCELERATED REPLY MAIL

Major mailers say they will use Accelerated Reply Mail service extensively when the U.S. Postal Service rolls it out across the country later this month.

"We have built a business on the premise that Accelerated Reply Mail will exist," said Edmund Bartlett, president of Nationwide Remittance Centers Inc., a large payment processing company based in McLean, Va.NRC, like American Express Travel Related Services in New York, plans to take full advantage of ARM.

ARM service is designed to speed remittances so banks, credit card, mortgage and insurance companies can capture more of the "float" or interest that accrues during transit.

Receipt and deposit of remittances should be several days quicker than by conventional mail. Those that use the system should be able to record gains that more than offset the added fees and reshipment charges, Postal Service officials say.

The Federal Reserve estimates that major corporations lose as much as $600 million annually waiting for customers' checks to clear.

Supplemental ARM charges average from 2 cents to 5 cents a letter, depending on the option chosen, according to mailers.

ARM got an unexpected boost when the Postal Service recently chose to slow delivery of first class mail later this year.

"People are looking to ARM as an answer to uncertainty at the post office," Mr. Bartlett said.

Using ARM, mailers can circumvent the ill effects of a planned change in first class mail delivery standards, scheduled to take effect this summer. That modification effectively slows mail delivery for some intercity shipments.

As designed, the Postal Service will capture designated bar-coded payment envelopes at various post office "choke points" in 200 locations and then separate them for bulk pick-up or expedited reshipment.

The Postal Service charges $340 a year to trap mail at each location. In addition, the recipient pays a slightly discounted Express Mail fee to leap- frog shipments overnight from each major collection point to a central location, should it choose.

During the two ARM tests in which it participated, NRC reduced transit time for letters by 1.5 days, on average. It did so by retrieving mail at a central location, said George McQuain, NRC vice president, marketing. said.

NRC also saw "dramatic improvement" in the consistency of mail delivery during trials, he added.

"Our experience was excellent. The post office delivered what they promised to," said Lica Katz, vice president, American Express Travel Related Services.

The Postal Service views ARM as a way to generate regular, incremental additional high-margin Express Mail volume, without cannibalizing existing business. All letters, moreover, must have first class postage that's affixed by the sender.

The Postal Service is targeting large volume mailers for ARM services.