More US Postal Service News

I can't believe that my first blog of the new year ends up being about the US Postal Service. Gee, I guess I AM a direct marketing geek.

In November, I posted on a similar topic--ways the USPS may be able to save money through cost-savings initiatives (such as cutting out delivery days).

Today's slightly depressing postal news comes to us from National Public Radio: Postal Service Sees Less Mail In Slumping Economy. The article cites the serious decline in mail and revenues the USPS is currently experiencing.

The recession is reaching well beyond the automotive industry or the mall.

It's even hitting the U.S. Postal Service, the nation's third-largest employer. From holiday cards to credit card offers, mail volume is down. And the Postal Service is losing money.

I guess it's no surprise that companies (and even consumers) are mailing less. In the hey day of the mortgage boom, tiny mortgage companies were mailing millions of pieces a month. And the giant financial services firms were in the multi-million volumes (I remember one company, in particular, who mailed upwards of 10 million pieces each month--that's a lot of paper...).

What brought the postal decline home to me was this quote from the article:

Stephen Kearney, senior vice president of customer relations for the Postal
Service, says the drop in mail volume "accelerated throughout the year. ... Our
mail volume had its greatest decline since the Great Depression."

In the fiscal year that ended in September, mail carriers delivered 9.5 billion fewer letters and packages than the year before. Kearney says the Postal Service made aggressive cuts and still lost $2.8 billion. Fiscal year 2009, which started Oct. 1, isn't looking any better, he says.

My take on this: I do believe that direct mail will remain a viable channel for some marketers. However, I think that the trend of cutting mail volume is here to stay. Gone are the days of super-duper high volume direct mail, blanketing anyone who seems close to the target audience. DM will be used judiciously and only where it makes sense.

Should the USPS Change its Delivery Schedule?

I thoroughly enjoyed this article from DM News. It’s all about cost savings ideas for the US Postal Service, with the ultimate goal of keeping postage steady for direct marketers. The article cites two postal mail industry experts who have provided their comments on cost savings efforts.
Specifically, each expert discusses ramifications of the USPS cutting a day of mail service—cutting delivery from 6 times each week, to only 5.

Expert 1: C. Hamilton Davison, Executive director, American Cataloger Mailers' Association

Primary point: Thinks that other options should be considered first—prior to cutting a day of mail delivery. For example, he suggests that the USPS look at closing some branches. He provides an interesting comparison of USPS facilities to McDonalds.

“Do you think McDonald's is everywhere? Well, McDonald's has 21,000 restaurants
worldwide; the USPS has 37,000 retail locations in the US alone. Isn't it
possible that we have too many post offices?”

Bottom Line: Mr. Davison recommends exploring any and all cost savings options if it means keeping the USPS competitive.

Expert 2: William Burrus, President, American Postal Workers Union

Primary point: Mr. Burrus is adamantly opposed to a reduction of mail delivery days.

“If such a reduction leads to an increase in Priority, Registered, Certified,
FedEx, or UPS deliveries, customer costs would increase, and productivity
would decline.”

Bottom Line: He suggests that this change is too radical because it would delay mail significantly, especially in holiday schedules.

“This change would begin the process of dismantling the United States Postal
Service, which is the primary objective of those who advance this terrible
idea.”

My take: I believe that the USPS needs to explore any cost-saving idea it can come up with. In this economy, every single business is exploring ways to save. The USPS shouldn’t be any different.

And, the solution clearly isn’t significant postage increases. I hate to see the direct marketing industry (which is a huge cash cow for the USPS) continually hit by rate increases that seem overwhelming and unfair. Further, taking away a day of mail delivery would not be the end of the world to most consumers who no longer rely on postal mail to receive important personal and business communication.

So, if a day must be cut to keep postal mail flowing, so be it.