Key Notes Vol. 02 No. 05

USPS Revenue Rose 4.3% in Holiday Quarter – The Postal Service ended fiscal 2015’s first quarter (Oct. 1-Dec. 31, 2014) with a 4.3 percent increase in operating revenue compared to the same period one year earlier. The net loss was $754 million. The operating revenue increase was partially driven by the record number of packages delivered during the holidays. Shipping and package volume rose 12.8 percent compared to one year earlier. The net loss included a $1.4 billion expense accrued for the mandated prepayment to the Postal Service Retiree Health Benefits Fund. Other year-to-year highlights:

  • Standard Mail volume rose 3.5 percent, driven by an increase in political mail volume.
  • First-Class Mail volume decline slowed to a 1.1 percent decrease.
  • Standard Mail revenue and First-Class Mail revenue were up 7.6 percent and 3.7 percent, respectively. Source: USPS

Budget Seeks to Aid Postal Finances – The administration’s budget proposal would provide some immediate relief and the prospect for more from several obligations that the U.S. Postal Service holds largely responsible for its financial problems of recent years. One main issue is the obligation under a 2006 postal reform law requiring pre-funding of retiree health insurance costs, a roughly $5 billion annual obligation over 10 years on which USPS has defaulted for several straight years. The budget would stretch out the obligation, including the missed payments and the payments due for 2015 and 2016, over 40 years starting in 2017 providing some $13 billion in relief through 2016. The budget also proposes to give USPS authority to reduce mail delivery frequency from six days to five days if mail volume falls below 140 billion pieces for four consecutive quarters (the Budget assumes this will occur near the end of 2018); allow it to shift more to centralized and curbside delivery rather than door-to-door; allow USPS management to respond more quickly to market opportunities; and make permanent a two-year rate increase approved in December 2013. Source: FedWeek

Mysteries of the New Postal Rates – It sounds like a small price increase, but the new rates could have large implications for publishers, marketers, printers, and even paper mills. Nearly three weeks after the U.S. Postal Service proposed hiking most postal rates, mailing experts and regulators can’t figure out what the proposal means. Some mailers are skeptical of USPS’s calculation that the price increases, especially for the Standard and Periodicals classes, are just shy of 2%. But until USPS answers an extensive list of questions about the new rate structures and the new rules that will accompany them, no one can evaluate whether the proposed rate hikes are legal, the PRC said. The author of the Dead Tree Edition blog provides seven mysteries worth reading. Click here.

Staying Alive: Direct Mail Continues to Thrive – Speaking at the DMA headquarters in New York City recently, Keith Goodman, VP of direct mail solutions provider Modern Postcard, said “Every time something else came along, futurists would say ‘oh, now this is definitely going to kill direct mail. But here we are, after the radio ad, and the television ad, and the Internet, and email marketing, and the banner ad, and content marketing and so on and so forth.” And, year upon year, direct mail continues to be an integral part of almost every well-rounded direct marketing campaign. “Email marketers will brag when they have open rates of 15 to 30 percent,” he said. “But if you send something in the mailbox? As long as someone picks it up, that’s an open rate of 100 percent!” The recipient is almost guaranteed to see it, as mail already has an established and trusted place in the daily life of a home. While unknown emails are quickly deleted as spam, direct mail is an accepted form of advertising new products and services to consumers and businesses. Source: Target Marketing

Catalogs: Cashed out, or making a comeback? – About 58% of online shoppers browse catalogs for ideas, and almost one-third (31%) have a print catalog nearby when making purchases online, according to a 2013 study from global management consulting firm Kurt Salmon. Among the most diehard catalog fans, women 18 to 30, 45% say catalogs have stimulated their interest in products, while 86% reported having bought something after seeing it in a catalog. Flipping through the pages of a glossy mailer is more engaging (and often less frustrating, even on the fastest websites) than searching for a product online, and can help structure a search before the customer reaches for the mouse. Few buyers are going to tear out an order form and mail it in with a check these days, but it turns out that they will log on or call a toll-free number to learn more. Source: RetailDive