Understanding Postal: USPS Faces Unprecedented Economic Stress
As the USPS faces significant financial stress and mail volume continues to decline, catalogers must exercise vigilance on postal issues. While some of the changes the USPS is pursuing as a result of its unprecedented economic state are positive, others can do tremendous harm to catalogers and other
Like many businesses, the USPS is experiencing financial stresses unlike any in the past. This includes a $751 million net income loss in January, compared to a $44 million net income loss for the same period in 2008. Total mail volume declined by more than 16 percent during that time.
The volume of flat-sized pieces, such as catalogs, being mailed is at its lowest point since 1997, with a decline of 7.6 billion pieces since 2006. As a result, the USPS had to revise deployment plans for the Flats Sequencing System equipment, which processes and sorts catalogs and other flat-size pieces into delivery point sequence.
Some Good News
On the positive side, mail volume loss, particularly for flats, is leading the USPS to consider new ideas more aggressively — namely some new products, services and discounts designed to retain and generate mail volume.
One example is the new saturation mail initiative to be included in the May 2009 annual pricing change. For the first time, the USPS will include a significant price discount for growth in total mailed saturation volume or growth in market coverage within a defined market. The volume growth must be documented from the prior year to qualify for a significant per-piece price credit for the incremental volume over the one-year program period.
Push for Mail Volume
A joint USPS/industry work group has laid out ideas and recommendations to help retain and grow marketing mail volume. These include volume incentives, peak/off-peak pricing, the elimination of unnecessary mail preparation and entry requirements that present obstacles to using the mail for marketing purposes, reducing design restrictions, and bundled media offers.