Key Notes Volume 03 Number 04

Calls for Postal Reform Grow Louder – For years, proposals to reform the U.S. Postal Service have stalled on the Hill, but last week a congressional panel said the need for legislative action is more urgent than ever.  “Mr. Chairman, we need reform now,” Megan Brennan, postmaster general and chief executive officer of the U.S. Postal Service, told Sen. Ron Johnson (R-Wisc.).  Brennan said USPS should continue the exigent pricing surcharge, which she said is “crucial to our financial health.”  “Removing it will reduce our revenues by $2 billion a year, further worsening our already precarious financial condition,” said Brennan.  If the surcharge were removed, Acting Postal Regulatory Commission Chairman Robert Taub said the recent 10 percent bump in competitive product rates would not generate enough revenue to fill the gap left by the surcharge.  There was no call to cut Saturday delivery, which has been a contentious element of past postal reform proposals.  For more:  go to the hearing page (includes prepared testimony and archived webcast).  Source:  Fierce Government IT

Exigency and the Political Lose-Lose Situation – At the Senate Governmental Affairs  Committeehearing on the state of the Postal Service last week, Chairman Ron Johnson, said he needed tighter financials before discussion of a postal bill could be enjoined, turned the meeting over to Ranking Member Tom Carper, and left the room.  Carper then made a case for the immediate passage of postal reform.  Carper wove a clock-ticking sense of urgency around his new iPOST bill.  He set the deadline for its passage as the first week of April, the week that the 4.3% emergency postal rate surcharge will have collected sufficient recession-related payback to the USPS and be removed.  Carper and several of the witnesses at the hearing—among them Postmaster General Megan Brennan and National Association of Letter Carriers President Fred Rolando—think baking that 4.3% into the base rate is the only way to preserve mail-as-usual.  Source:  Direct Marketing News

Why Direct Mail & Marketing Print is Making a Resurgence – Whilst the digital revolution is set continue, print marketing is still an integral part of the marketing mix.  Today more than ever, tangible assets like direct mail and print marketing have more of an impact amongst today’s digital world, as 61% of people trust adverts in newspapers and magazines compared to 42% who trust online adverts.  Although technology continues to develop new innovative channels to promote brands digitally, print marketing is definitely not dead.  Did you know that 65% of customers made purchases after receiving a direct mail?  With more and more companies encouraging customers to switch online, the power of direct mail getting through the clutter of the mailbox has doubled. It also provides a way for people to unplug from the digital world.  Source:  Office Team

Postal Service Faces Massive Unfunded Liabilities for Retiree Benefits – The U.S. Postal Service is incurring unsustainable deficits and its financial condition has been classified as high-risk, according to aGovernment Accountability Office report.  The report finds that the agency’s financial condition continues to worsen because of two major factors: declining mail volume and rising expenses.  The large unfunded liabilities for postal retiree health and pension benefits may ultimately place taxpayers, USPS employees, retirees, and their beneficiaries, and USPS itself at risk.  Source:  Fox News

Survey:  Retailers Will Stick with Direct Mail in 2016 – Fewer retailers said they’d decrease direct mail campaigns than did last year, indicating a leveling-off in declining usage of the channel, according to a study from AgilOne.  While 33% of the marketers surveyed—mostly from bricks-and-clicks retailers with sales ranging between $50 million and $500 million—said they’d decrease direct mail spending in 2016, that represented a marked turnaround from the 39% who said they’d do so in last year.  Better targeting and personalization is the reason, maintains AgilOne, which sees the trend as a reversal in the drop-off of mail activity among retailers.  Source:  Direct Marketing

On Price Changes, Certainty Rules – Mailers have pushed for predictability in postage rates for seemingly as long as there have been postage rates.  The market-dominant rate increase of 2015 illustrates the frustration of uncertainty. Customers weren’t entirely sure when the new prices would take effect or what exactly those new rates would be, making it hard to budget.  In 2015, the Postal Regulatory Commission (PRC), which reviews proposed price increases, twice sent the market-dominant case back to the Postal Service because the PRC could not determine if the filing was legal. (Market-dominant products are essentially the monopoly products, such as First-Class Mail, Standard Mail, and Periodicals.) The USPS OIG recommended the Postal Service establish a documented and repeatable process to guide its Pricing group in preparing price change proposals.  Source:  USPS OIG