The July 2025 USPS Marketing Mail rate increase is here, and it’s reshaping the economics of direct mail. While many marketers are focused on rising postage costs, fewer realize that how and where you enter mail into the USPS system now matters more than ever.
Enter SCF dropship: a critical cost-saving tactic that can make or break your direct mail ROI moving forward.
The New Economics of Direct Mail
On July 13, 2025, USPS implemented an average 7.4% increase in Marketing Mail rates, up to 15% for some formats. And while that’s a challenge on its own, there’s a second, equally important change flying under the radar: the elimination of Network Distribution Center (NDC) entry discounts.
That means marketers who used to benefit from NDC dropship rates are now facing higher costs for those same mail pieces, unless they shift strategy.
The solution? SCF (Sectional Center Facility) dropship, which is now the deepest discount level available for most campaigns.
What Is SCF Dropship?
SCF stands for Sectional Center Facility, a USPS mail processing hub that handles a specific group of 3-digit ZIP Codes (like all ZIPs starting with 606 for Chicago). Marketers, or their direct mail partners, bypass earlier USPS handling steps when they dropship mail directly to an SCF.
There are three common entry strategies for Marketing Mail:
| Entry Point | Cost | Speed | Status Post-Hike |
| Origin Entry | Highest | Slowest | Still available (most expensive) |
| NDC Dropship | Mid-range | Moderate | Discount eliminated |
| SCF Dropship | Lowest | Fastest | Now most cost-effective |
By delivering mail closer to its final destination, SCF dropship unlocks lower postage and faster in-home dates, which is now more important than ever.
How SCF Dropship Helps You Save
Here’s why SCF is a smart play for 2025 and beyond:
- Postage Discounts: SCF entry qualifies for some of the lowest rates under the new structure, often $0.02 to $0.05 less per piece than Origin Entry.
- Faster Delivery: Fewer processing steps mean more predictable in-home dates, especially critical for time-sensitive retail, subscription, or nonprofit campaigns.
- Operational Control: By skipping intermediary facilities, SCF dropship provides greater control over when and where your mail lands.
This provides a two-pronged strategic advantage for marketers.
Why SCF Entry Matters More After the 2025 Rate Hike
Here’s the bottom line: NDC discounts are gone. If your campaign relied on NDC entry for cost efficiency, you’re now looking at significantly higher postage unless you pivot.
That makes SCF dropship the new baseline for marketers who want to keep costs down and performance up. For high-volume B2C mailers, even a $0.03 savings per piece can translate into tens of thousands in annual savings.
The Catch: Not Every Campaign Qualifies
There’s one caveat: You need enough mail density per SCF region to qualify for dropship discounts. If your mail is scattered across too many ZIP Codes without sufficient volume per cluster, USPS may treat it as Local Entry, at a much higher cost.
This is where some marketers get stuck: their audience isn’t concentrated enough to justify SCF dropship on its own.
How Commingling Unlocks SCF Benefits
Commingling solves this problem.
When you commingle, you combine your mail with that of other marketers targeting similar ZIP Code regions. This creates the necessary volume to qualify for SCF dropship rates, even if your individual campaign wouldn’t make the cut.
At sg360°, our clients benefit from one of the industry’s most advanced, in-house commingling operations. We aggregate and sort mail by ZIP Code across campaigns, enabling even mid-sized or lower-density mailers to access deep entry discounts and faster delivery through SCF entry.
How to Make SCF Dropship Part of Your Strategy
To start taking advantage of SCF entry:
- Audit your mail file for ZIP Code density. Where are your recipients concentrated? Are you clustering enough volume to hit SCF thresholds?
- Evaluate your current entry mix. Are you still defaulting to Origin Entry or using outdated NDC plans?
- Explore commingling options. If your list density is low, commingling may be your key to unlocking SCF savings.
- Partner with a logistics-savvy provider. The right mailing partner can simplify SCF strategy, manage transport and drop scheduling, and ensure compliance. In our opinion, you can’t go wrong with sg360°.
Final Thought: Logistics = ROI
SCF entry is foundational to running cost-effective, post-rate-hike direct mail. Brands that optimize their entry strategy will not only save money, they’ll gain an edge in delivery speed, consistency, and attribution clarity.
sg360° can help you assess, plan, and execute an SCF dropship strategy tailored to your program goals.
Ready to Find Out if SCF Dropship Can Work for You?
Request a free direct mail entry audit. We’ll analyze your ZIP Code density, postage mix, and drop strategy and show you exactly where you can save.
