Trends in Print and Mail

Last week, the U.S. Postal Service (“USPS”) announced the first rate change for 2015. The rate adjustment was filed just days after the Postal Regulatory Commission (“PRC”) published a notice outlining the steps the USPS needed to follow when removing the exigent surcharge they approved in December of 2013.

In August, we published a blog post recommending that mailers budget for a 2% postage rate increase in 2015. A few months later, the USPS announced they wouldn’t file for a January increase and many mailers reduced their 2015 postage budgets accordingly. Those mailers will be facing budget shortfalls as the new rate case brings a 1.9% to 2.7% increase for commercial First Class mailers and an average 1.9% increase for Standard Class mailers beginning April 26, 2015.


Many of the pricing tables in the rate case can cause confusion. The figures in the rate case are based on what mailers would be paying without the exigent rate increase. As such, the tables include pricing that is actually lower than the current rates. For example, here’s the First Class Mail breakout:


Current stamped single piece mail is priced at $0.49 and AADC Automation mail costs $0.406, not $0.47 and $0.389 as shown in the charts. This difference makes it more difficult for mailers to accurately assess the impact of the increase on their budgets. We recommend ignoring the prices and using the percent changes for each category of mail that your company produces. Here’s the chart for Standard Mail:


While better charts will be forthcoming (we hope), mailers need to act now to prepare for the April rate increase. Here are 5 steps every mail operations manager can take now:

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My friend Karyn is a high school physics teacher. To start the school year, she assigned her students a challenging project. She gave each pupil an unbroken Pringles potato chip. The assignment: package and mail the chip back to Karyn – unbroken. The goal would include creating the smallest and lightest package possible that would keep the chip intact.

As she was taking questions from the class, one student asked, “Miss, is that your home address?”

“No.”

“Then what address is that?”

“That’s the address of the building you’re in right now.”

It would be easy to dismiss this exchange as another example of the lack of awareness of the younger generation. After all, how could you not know the address of your school? Or your workplace?

After decades of working in the mailing business, I can assure you that there a lot of people that don’t know their correct business mailing address. And for companies that use internal mail codes, many people don’t know those either.

The mailing address for a company may be different than the physical address for many reasons. Companies may not use the street address, but instead use Post Office boxes to speed up delivery and sorting of the mail. Or, a person may work in one building within a complex, but the centralized receiving and mail center may be in another building. Sometimes a company may want all employees to use the headquarters’ address, regardless of where they work.

Internal mail codes add to the complexity of addressing. Many companies use a unique code indicating the physical location within a building. For example, a company may build a code based on floor, plus cardinal direction, plus aisle. If a person’s cubicle is located on the 2nd floor, west side of the building and the 4th aisle, then their mail code would be 2W4. Large companies may have more complex codes, depending on the number of cities or buildings.

The proper placement of the internal code for mail being received is important. If an internal mail code is placed on a separate line below the street address, the U.S. Postal Service’s automated sorters may decode it improperly, and send the mail to another company. Follow the guidelines set in the Mailing Standards of the United States Postal Service (aka Publication 28) to ensure your mail is processed accurately.

Clearly defined mailing addresses, combined with internal mail codes, help speed the delivery of inbound and interoffice mail. However, unless employees are properly informed about their proper addresses, and why those addresses are important, they won’t use them.

Mail center managers must take responsibility for educating their fellow employees. Not just on the first day of orientation, but on a regular basis. Growing up in the 60’s, I remember the ads from Post Office Department featuring Mr. ZIP, encouraging consumers to use the correct ZIP Code on their cards and letters. The ads may seem “basic” or “cheesy”, but they worked. A similar internal campaign may work for your company.

Physical mail continues to play an important role for businesses, government and educational institutions. Properly addressed mail will make sure that the right piece – will get to the right person – at the right time.

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In the springtime, many mailers attend the National Postal Forum to hear from United States Postal Service (“USPS”) officials and fellow industry professionals about the current state and future of our industry. In the fall, the focus shifts to National Postal Customer Council (“PCC”) Week, which takes place September 8 – 12 at multiple locations throughout the country.

In the past, this event was called “PCC Day” and was held on the third Wednesday in September. The Postmaster General would participate in a live simulcast from the city that had won the PCC of the Year award. PCCs needed to hold their events at a location that could broadcast a satellite feed of the speech. Usually after lunch for the East Coast, and breakfast for the West Coast.

A few years ago, “PCC Day” transformed into a week-long event. The Postmaster General pre-records his speech, and distributes it to the districts. This allows PCCs greater flexibility in selecting the location – and the day of the week – that works best for their organization. The result has been better turnouts across the country.

PCCs are an underutilized resource – by both the USPS and mailers. I know of no other industry where the customers volunteer to organize, and then pay for, educational events on how to use a vendor’s service better. USPS management needs to better use the PCCs as a two-way communication platform. The PCCs are a great way to distribute information to business customers, and educational seminars are needed.

But management needs to listen to the customers as well. Not just parry comments with prepared defenses of postal policy, but attentively listen and react to what the customers are saying. Large mailers may be represented by professional organizations, but the PCCs represent the small and mid-sized mailer as well. Business mailers – First Class, Standard, Package and Periodical mailers – represent the overwhelming majority of the USPS income. Their voice deserves to be heard, and their opinions matter.

Too many mailers don’t take advantage of the opportunities presented by their local PCC either. There are classes on postal regulations, USPS initiatives and industry trends. We’re in an era of transformative changes on how we create, print and prepare mailings. We owe it to our organizations to keep ourselves educated. And PCCs provide that educational opportunity.

To find more about your local PCC and their National PCC Week event, check out the PCC Locator on the USPS website. Or, call your local USPS District Business Service Network representative for more information. Most of the events are more than reasonably priced, so bring some of your co-workers with you. The benefits far outweigh the expense.

PS – I believe in practicing what I preach. I’ve been a member of the Greater Boston PCC for decades, and currently sit on their Executive Board. During National PCC Week, I’m presenting for 3 different PCCs – the Omaha PCC Advertising Expo on September 10, the Greater Kansas City PCC event on September 11, and the Carolinas (all 5 PCCs) Postal PCC Forum in Charlotte on September 12. As always, I’m waiving my speaking fees for these mailing organizations.

Hope to see you at a PCC event soon!

 

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Last December, the Postal Regulatory Commission (“PRC”) conditionally approved the US Postal Service’s (“USPS”) request for an exigent rate increase. That meant on January 26, 2014, postage rates increased an average of 6.0%.+ Read More

For several years, the leadership of the United States Postal Service (USPS), the postal employee unions, and the mailing industry have clamored for postal reform. Under the Postal Accountability and Enhancement Act (PAEA) of 2006, the USPS has had to pre-fund future retiree health benefits, creating a $5 billion annual liability. Adding to the problem, the USPS has overpaid billions into the Federal Employee Retirement System. And mail volumes have declined (but not as much as many people think).

Congress has responded quickly – by doing nothing. There are over 30 bills in the House and Senate dealing with different aspects of postal reform. Only two bills – H.2748 and S.1486 – have been approved by the respective oversight committees. That was months ago, and neither have been brought to the floor for a vote. Probably because there are competing bills in each chamber that have more supporters, including a lot of bipartisan agreement.

The USPS Board of Governors is the equivalent of a board of directors of a private corporation. The Board is composed of the Postmaster General and 9 members who are appointed by the President with Senate approval. Since President Obama has taken office, the terms of 5 Governors have ended, and he has submitted the names of Republicans and Democrats as nominees. And waited. And waited.

Last week, the Senate held a confirmation hearing for 4 of the nominees. The committee chairman, Senator Carper, began the hearing with a statement on the importance of the USPS to the nation’s economy and the millions of people who work in the print and mail industry. He was the only member of the committee present. His Republican co-chair’s plane was delayed, but there was no explanation for the absence of the rest of the committee. Nor has a date been set for a vote on the Senate floor to finalize their confirmation.

The passage of a postal reform bill will be a contentious issue. While everyone agrees change is needed, there’s little agreement on what those changes should look like. It will take tremendous effort and compromise by all parties to create a solution that will resolve at least some of the issues impacting the USPS. It will be hard work.

However, the Congress has allowed the USPS Board of Governors to dwindle to less than half of its required appointees. The confirmation process wasn’t held up by the filibuster or other procedural delays. It’s just that nothing happened. Two more Governors’ terms expire in December.

If the routine procedural confirmation of these nominees can’t be completed in a timely manner, if committee members can’t make the time for these hearings, is there any hope for comprehensive postal reform in the near future?

 

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News stories about the United States Postal Service (“USPS”) usually include a statement about declining mail volumes. Often prefaced with, “due to diversion to the electronic communication” or “because of the internet”, the reporter or columnist will paint a dreadful picture of the state of the USPS. Hard copy bills and statements are derided as “snail mail”.

If posted on a news website, the readers' comments that follow are even more derisive. “I receive and pay all of my bills online.” “Who needs mail delivered to their house?” “The USPS is like buggy-whip factories in the age of the automobile.” Of course, these commenters have an active online presence, so their view is slightly skewed.

Mail volumes have declined considerably over the last decade. First-Class Mail – bills, statements, letters and payments – has been significantly impacted by online options. The USPS delivered 35% less First-Class Mail in 2013 than they did in 2004. However, the types of mail that have declined, and the rate of decline tell an interesting story.

The largest components of First-Class Mail are “Single Piece”, “Workshare” and “Post Cards”. Single Piece mail is composed of mail being deposited with the USPS at the full postage rate, with either a stamp or meter imprint. Much of this mail are payments being sent from consumers to companies and banks. Workshare mail is when companies presort their mail by ZIP Codes, and then receive a discount from the USPS. This is mail sent by companies to their customers. Post Cards can be sent at full rate or at a discounted rate.

The biggest drop in mail volumes has been with Single Piece mail. In 2013, the USPS processed 23.6 billion fewer pieces of Single Piece mail than in 2004. This makes up more than 73% of the total decline in First-Class Mail volumes. Much of this decline is caused by more people paying bills either online or through automatic withdrawal from their bank accounts.

Workshare mail has also declined significantly, but not as much – only 18% over the last 10 years. Some people have elected to have their bills and statements delivered electronically, just not as many as reporters seem to think. And not as many customers as most companies would prefer.

But electronic diversion is only part of the reason for the decline in hard copy mail. The most significant drop in mail volumes occurred during the Great Recession (2009-2011). The USPS saw a loss of over 19 billion pieces of First-Class Mail during this time period, representing 60% of the decline for the entire decade.

As the chart below shows, mail volumes continue to fall. However, the rate of decline has slowed considerably. In 2012 and 2013, there was only a 5% and 4% drop in First-Class Mail volumes respectively. The first 2 quarters of 2014 shows the trend continuing, with only a 4% reduction in volume. Significantly, Workshare mail is down only 3%, with the 2nd quarter of 2014 having almost the same number of pieces as 2013.

What does this all mean for the USPS and its customers? The drop in First-Class Mail volume is significant, but the rate of decline has slowed considerably. People are paying more bills online, but prefer to receive paper copies of their bills and statements. Mail volumes being delivered to businesses and banks will fall quicker than mail being delivered to households.

Physical mail remains a critical link between businesses and their customers. Companies need to remain flexible, offering their customers the ability to receive communication in their preferred format – electronic and paper. The USPS must remain committed to accepting and delivering physical mail in a cost-effective, customer-centric and timely manner.

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It’s a nice message. But when PMG Donahoe says “We are stronger together”, who does he mean by “we”?+ Read More

In the age of the Internet, budget cutbacks, and increased demands for time, are trade shows and conferences still relevant? The answer is a resounding “Yes!”

My good friend, Paul Balbastro, has a time management tip for getting the most out of a conference: the "30-30-30-10 Rule". Paul says you should spend:

• 30% of your time at the exhibits,
• 30% of your time in classes,
• 30% of your time networking, and
• 10% of your time enjoying the host city.

Trade shows like the NPF provide the best opportunity for face-to-face time with vendors. Nothing can replace seeing a product, touching it, and talking to a vendor about it. And at a trade show, you can go down to a competitor’s booth three aisles away to compare products. All within a few minutes. The information is fresh in your mind, and you can easily compare apples to apples.

You’re able to attend some great educational sessions. Best of all, you’re learning from fellow managers – people who have actually used the tools and techniques they’re talking about. When you ask questions, you’re not talking to a professor with abstract ideas, but a fellow professional with real world experience. Whether you’ve been in the business for 2 years or 20 years, there’s still a lot left to learn.

Speaking of fellow professionals, it is important to expand your network. Whether it’s renewing acquaintances or making new contacts, conferences are the best place for networking. There’s so much to gain by building relationships with your peers in the industry. You’ll know who to call when facing problems for the first time, or checking references on a vendor. Who better to talk to than someone you already know? Your network can become the best tool in your personal development drawer.

Before attending the show, prepare a schedule. Choose the classes and presentations that will help you meet challenges today and tomorrow. Have a plan on which vendors you need to meet on the trade show floor. If possible, schedule appointments with sales people in advance. Remember – leave some free time on the schedule to recharge your batteries.

Keep track of what you accomplish during the shows, and prepare a written report for your manager when your return to the office. Highlight what you learned and how you plan to implement changes in your organization. Include any money savings ideas that you picked up – especially if they’re greater than what it cost you to attend!

When faced with budget cuts, it is often easy to eliminate the trade shows and conferences because they are “optional” expenses. However, if you want to be aware of the latest technologies and products, improve your knowledge of the industry, and establish a solid network of fellow professionals – then consider your attendance mandatory.


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