Mailing/Fulfillment - Postal Trends

The U.S. Postal Service’s cash crunch could cause a “catastrophic” disruption of mail service this year, according to a government official who wants USPS to reveal its crisis-management plans.

The Postal Regulatory Commission “should request a description of the Postal Service’s priorities and plans for providing service across the Nation and across classes in the event cash shortages require services to be reduced,” PRC staffer Kenneth E. Richardson told the commission Friday.

Keeping an open mind, recognizing profit potential and identifying a point of entry was all the fodder that Quad/Graphics needed to embark on its mobile technologies platform, Interactive Print Solutions (IPS). Actually, it was a direct result of QIC (Quad Idea Catapult)—the company's innovation process management framework—vetting the technologies and creating IPS as a vehicle toward delivering mobile technologies to customers. It helps that Quad/Graphics CEO Joel Quadracci not only gave the endeavor his full blessing, but acts as an evangelist for the mobile technologies.

USPS invested more than $1 billion in FSS machines to automate the labor-intensive process of handling catalogs, magazines, and other flat mail, but so far the results have been mixed at best. Meanwhile, the agency continues to seek special rate increases on some types of flat mail, such as Periodicals, on which it claims to be losing money.

The USPS debuted a new app this week at CES 2013 that worked well and could increase a company’s interest in sending mail again. The app, which was developed with Aurasma, scans a piece of mail and uses augmented reality to make the paper an interactive ad.

“We worked on this to show companies that hard copy mail can be a part of their editorial content,” Chris Karpenko, head of USPS outreach, told me on the CES show floor. “It’s all about the customer experience.”

Karpenko said the app will likely be released “before the end of 2013.”

Offering a money-back guarantee for major corporations to try out direct mail campaigns has not proven successful for the U.S. Postal Service. It launched the “Mail Works Guarantee” trial in June 2011 with the hope of giving cast-iron proof to large potential customers that direct marketing through the mail brings a good return on investment for the average marketing dollar.

But alerting regulators to the end of the trial, USPS conceded that its offer was not taken up by any suitable corporations.

USPS had been hoping for as many as 16 major advertisers...those firms that spend at least $250 million a year

The (Postal Service) review by the nonprofit National Academy of Public Administration will analyze the benefits of restoring the agency’s financial health by using a “hybrid” model, which would farm out to the private sector postal operations other than the last delivery mile. A letter carrier would still drive or walk that last part, dropping letters and packages in mailboxes.

The idea of taking postal operations private is popular in conservative circles but will be a non-starter in others. It is staunchly opposed by congressional Democrats and postal unions, which stand to lose tens of thousands of members.

The U.S. Postal Service has said it will adopt above-inflation rate increases for its loss-making Standard Mail Flats service each year up to 2016. The move is prompted by the Postal Regulatory Commission’s 2010 order that rates should rise towards full cost coverage.

To make the Flats rate increases without violating its inflation-based price cap, USPS said it would be unable to increase rates for other Standard Mail services by quite as much as it would like.

One key reason USPS has shied away from increasing Standard Mail Flats rates…it would push catalog publishers into finding alternative distribution channels

I’ve always been a proponent of clean mailing lists. Why would you want to ship your or a client’s direct mail piece or catalog to anyone that is not remotely interested? So, as we approach the New Year and resolutions are bound to be made:

The U.S. Postal Service, at the urging of publishers, is planning to sell magazine subscriptions on its website and to promote them at post offices. “The USPS is moving forward on a plan to offer magazine subscriptions for sale on usps.com,” says Idealliance’s summary of the recent Mailers’ Technical Advisory Committee (MTAC) meeting, a joint USPS-mailers group.

Postal officials’ interest in promoting magazines may seem odd in light of the Postal Service’s claim that the Periodicals class is its most unprofitable type of mail. But that supposed unprofitability is the result of allocations for fixed costs, some questionable cost accounting,

Direct mail is still considered the marketing channel of choice by a vast number of marketers across verticals ranging from telecom and utilities to nonprofit, publishing and financial services. According to the Direct Marketing Association's “2012 Response Rate Report,” the rates for letter-sized direct mail (3.4 percent) were 30 times higher than those for email (0.12 percent). The belief that direct mail is dead or dying will have to be suspended for the time being.