Catalogers Offer Mixed Reaction to the Postal Service's 5-Year Profitability Plan

Catalogers were hopeful yet still cautious regarding the proposals laid out in the U.S. Postal Service's five-year business plan, which was presented by Postmaster General and CEO Patrick Donahoe at the spring 2012directXchange Conference by NEMOA in Boston yesterday.

"The USPS continues to endure the negative effects of electronic diversion combined with a weak economy and increased funding obligations," Donahoe told the packed audience. "This confluence of events has had financial impacts on the organization which have become untenable."

While Donahoe said the USPS has continuously sought to make operational improvements and improve efficiency, "the organization’s current financial position requires additional action to ensure viability and self-sufficiency."

The USPS's plan — which Donahoe said will result in more then $20 billion in annual savings within the next five years — is based upon several key restructuring objectives, including the following:

• preserve the USPS's mission to provide secure, reliable and affordable universal delivery service;
• create economic growth and enhance commerce;
• implement a comprehensive financial transformation for a long-term sustainable financial future;
• protect U.S. taxpayers; and
• continue to treat employees and customers fairly.

"Each of the initiatives is essential to restore the Postal Service to financial viability," Donahoe said.

While Donahoe and his presentation were warmly received by the NEMOA audience, most of the catalogers in attendance were more concerned with how the plan will affect their print and production schedules and whether the agency will offer a discount on prospecting mail under the new scheme. Catalog mailers have asked the USPS for a special prospecting rate for several years now.

"Simply put, if catalog mailers move their prospecting dollars to alternate media, such as email, it's likely that those prospects will come back to them via that same channel," said Hamilton Davison, president and executive director of the American Catalog Mailers Association, who was in attendance at the conference. "If the Postal Service gives catalog mailers an incentive to use the mail for prospecting, such as a discounted mailing rate, they'll likely use the mail more, which will bring more mail into the system."

Several mailers in the audience asked Donahoe about the possibility of a mail prospecting rate, and while he said the USPS has some concerns with it — namely, the fact that there's a high possibility of fraud within this kind of a framework — he did say that it's something the agency is looking into.