Extended Coverage: USPS – Will It Disappear?

When your editor makes a decision to defend you in the comments section below a feature article, then the article must have hit a nerve! I talked to several mailers, and association leaders who represent them, in a feature this month in the magazine … as I should: mailers have a lot to say about goings-on at the Postal Service

When your editor makes a decision to defend you in the comments section below a feature article, then the article must have hit a nerve!

I talked to several mailers, and association leaders who represent them, in a feature this month in the magazine … as I should: mailers have a lot to say about goings-on at the Postal Service (and not-goings-on in Congress) leading some mail marketers to re-evaluate the medium. I’d say it is a timely premise—particularly with the recent exigent postage hike on top of the inflation-indexed hike.

Far more was offered than I could include in the feature. However, “Marketing Sustainably” has a bit of room and—with my editor’s permission—allow me to share a few more observations.

Let me be clear, every mailer I talked to wants the Postal Service to succeed. The prescriptions may vary. What may be unclear is how it will succeed…

Always the Postologist, Charley Howard of Harte-Hanks had these points to share on a future path:

“If the Postal Service is allowed to manage its own healthcare, get the pre-retirement funding relief from Congress that it is due, and get Congress to back off on leaning in on operations, I believe that we would have a USPS that is both viable and competitive. We should close post offices that only see 1.5 people a day, limit some mail delivery to five days (keep the parcels moving) and have the USPS become more sensitive to pricing. These outcomes require enabling legislation—and that’s a big ‘if’ and certainly not likely in an election year, never mind by 2020 or 2025.”

“I believe the leadership of the USPS, Postmaster General Patrick Donahoe in particular, has made the right decisions to try and save the post office,” says Paul Ercolino of U.S. Monitor. “Cost cutting, Network Rationalization and five-day delivery are all controversial decisions, but they are essential if the Post Office is to survive in the coming years.”

Hamilton Davison of the American Catalog Mailers Association spoke about innovation—but still sees challenges because of the process of oversight:

“Innovation on the revenue side, or improvements to [the Postal Service’s] cost structure, will only occur if it is given the freedom to experiment free from regulatory or political concerns. While it is right and proper that the enormous market power of the Postal Service not be unchecked, it should be given greater freedom in advancing markets or improving its cost structure without undue concern about these regulatory and political pressures. Management today is handcuffed in too many areas. Barriers to experimentation on a modest scale must be removed so the USPS can demonstrate pathways for greater innovation that can then be rolled out system-wide under the review of a regulator. Getting the regulator involved in early stage exploration of potential innovation is much more cumbersome.”

And Joel Quadrucci of Quad-Graphics spoke to mail’s role in a multichannel, digital-savvy world:

“We live in a multichannel media world, and print is—and will continue to be—a critical marketing and communications channel,” he said. “Print is especially powerful when connected with other channels. Direct mail is a critical channel because of its ability to drive action to numerous other media channels. Direct mail and digital marketing channels will move forward hand in hand, with direct mail creating a compelling call to action and digital marketing channels giving consumers a way to act.”

“The entire world of logistics is evolving along with retail,” Quadrucci continued. “More and more consumers are opting for the convenience of shopping online. We already see it with Amazon building distribution centers all over the country with the goal of facilitating same-day delivery of its products. The USPS could play a pivotal role in this evolving world of logistics; it is has many strengths. But in order to be competitive with alternative delivery systems, it must address its current challenges head-on.”

Clearly marketers must stay engaged with the Postal Service—and with Congress—as we tackle these challenges together. The Postal Service clearly has my support, too. Now if I could only sate Denny Hatch.

5-Day Delivery: Cost Cutting or Congressional Gambit?

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the 5-Day Delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the five-day delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here.

We all know that it is Congress and the White House—as a whole, not any lawmaker in particular—that largely caused the Postal Service’s recent default and current fiscal mess. Their inability or unwillingness to stop the mandating of 75-year pre-funding of USPS retiree benefits, and the subsequent raiding of those funds for the federal government’s own spending sprees elsewhere, deserves much of the blame.

Cost-cutting and diminishing services to U.S. citizens have been forced on the Postal Service, because a “fiscal cliff” already has arrived at L’Enfant Plaza.

Yes, there are other macroeconomic issues in play at the Postal Service—the digital migration of First-Class Mail, electronic payments and the Great Recession’s most recent effects and after-effects, for example. All the same, forcing such draconian budget mandates on the Postal Service is a serious miscalculation that was (unfortunately) included in the 2006 postal reform law. No other federal agency is held to the same pre-funding benchmark, and even fewer responsibly financed and accountable private pension schemes (there are still a few around) ever look to seven decades to the future.

This needed fixing five years ago, when the economy started to teeter and such rosy views of postal finances quickly began to sour. Here we are in 2013, and we’re still waiting for Congress to act.

The White House hasn’t been helpful either.

Now we’re faced with five-day delivery come August—and we’re left wondering if it can be stopped, reversed, prevented or mitigated, even if Congress and the White House were able and wished to intervene.

Will the reported $2 billion in said-savings really transpire—and make a difference? Has anyone considered the economic trade-offs? We all know many weekend advertisers that relish a spot in the mailbox on Saturdays—and this generates a lot of commerce. Can it all be simply pushed to a Friday?

The reality is that the Postal Service, as much as it seeks to manage itself as a business, remains a quasi-public institution, a part of our Constitution, and subject to both cycles of Congressional meddling and Congressional relief, the latter now being in short supply.

It’s quite amazing that the Postal Service is as efficient and as affordable as any postal service in the world, public or private—delivering communications to our homes six days a week. Still, it must deal with political representation that well may be intended, but which only seems to punt from crisis to crisis—or worse, after each crisis has rendered its most devastating effects.

Here we are in a downward cycle … again. This time our daily mail—and direct mail advertising along with it—is being expedited, by Congress, to the dilemma faced by dying daily newspapers in stagnant metropolitan markets—going, going, gone, at least on Saturdays.

Except this is our Postal Service, belonging to the citizens of the United States on paper. Is this squeeze on hardcopy communication inevitable—and our only choice? Or will some in Congress and the Obama Administration wake up to the fact that the Postal Service is a secret weapon for many brands (and political candidates), as well as a service to its citizens, and, therefore, do all their Constitutional best to ensure a viable future here?

By the way, I LOVE this recent piece in Esquire—required reading for our lawmakers: http://www.esquire.com/print-this/post-office-business-trouble-0213?page=all.