CHICAGO, Aug. 27 -- RR Donnelley is delivering postal discounts to magazine publishers by becoming the first printer to provide a new co-palletization service. Ideal for magazines with circulation or mailings under 100,000, the service combines pre-sorted, bundled magazines from different publishers on the same pallet meeting minimum pallet volume requirements and improving postal discounts for customers. Consistent with its industry leadership and advocacy of postal reform efforts, RR Donnelley played a major role in the development and execution of the co-palletization niche rate case. "RR Donnelley is one of the first printers certified for co-palletization by the United States Postal Service (USPS) to enable publishers to achieve the new co-palletization postal rate and ultimately reduce USPS costs," said Stephen M. Kearney, vice president, pricing and classification for the USPS. "The needs of our customers are at the heart of our business," said Daniel L. Knotts, president, magazine, for RR Donnelley. "We listened to the needs of our customers and identified an opportunity to leverage our distribution scale in the magazine industry to the benefit of our customers. We are working closely with our business partners within the USPS to reduce mailing costs and create postal discounts for our magazine customers on an ongoing basis. This is a great example of how we are applying our insight and knowledge to help our customers win." Publishers receive discounted rates when their mail is prepared on pallets rather than in sacks, which are costly to handle. When sacks are eliminated, the USPS realizes significant operational savings that can help avert rate increases. RR Donnelley has been actively testing the co-palletization service for two and a half months in its USPS-certified plant in Pontiac, Ill. During the test period, the company worked with five magazine publishers to transfer more than two million pieces of mail from sacks to pallets. This reduced the number of sacks required for those mailings by 99.7 percent -- more than 37,000 sacks were eliminated. By year-end, RR Donnelley expects to eliminate more than one million sacks. "Our team combined expertise in magazine distribution, deep insight into postal operations and a strong cooperative partnership with the USPS to develop an innovative process for inserting co-palletized periodicals into the postal stream," said Matt Bernstein, president of print services, RR Donnelley Logistics. "With co-palletization, the USPS lowers its costs, which translates into savings for the publisher." "The USPS needs leaders like RR Donnelley to shift large amounts of volume into more efficient processes in order to reduce the number and magnitude of future rate increases," said Kearney. "USPS costs and subsequent rates for handling flat mail are rising faster than the rate of inflation. We participate because it will enable small magazines to mail more efficiently, which promises to hold down postal rates in the future," said Nick Cavnar, vice president of circulation for Hanley- Wood Publishing, Inc. The benefits to Hanley-Wood through this new service include improved delivery time, increased quality of the magazine due to reduced material handling and postage savings. "This program works automatically -- it's practically invisible to us. And it ultimately provides faster delivery because mail on pallets is drop-shipped and therefore entered into the mail stream closer to its end destination," said Cavnar. "The mailpieces are handled less on pallets, so the quality of the delivered magazine is improved as well." Another RR Donnelley customer, Business News Publishing, has used the co- palletization service to gain postage savings while assuring quality delivery. "We can take advantage of postage savings and achieve improved quality for our readers because our magazine requires less handling on pallets," said Suzanne Reeves, corporate production director, Business News Publishing.