Pass the Aspirin: Mailers Prepare for 2012
Time to say farewell to a very interesting year for the US Postal Service, and hello to a year of that’s already full of unknowns for the mailing industry. As the Postmaster General Patrick Donahue says, “The Postal Service will endure.”
In 2011, we saw delivery times increase and postal finances plummet due to the decline of mail volume in almost all classes of mail. Politics have come into play more than ever, with several legislative bills in both the House and Senate regarding retiree health benefit pre-funding, closing of Post Offices, closing of processing facilities, and implementing revised delivery standards. There was also much talk about the elimination of Saturday delivery.
The year also saw an increase of 636,500 additional delivery points, even while the US Postal Service management managed to reduce overall operating expenses by approximately $4.8 billion compared to 2010. That’s a huge accomplishment, but more reductions will be needed for the success of the Postal Service. The USPS ends the fiscal year with a $5.1 billion loss. Ouch.
On to 2012! What does the future hold for the USPS and the mailing community? One thing we do know for sure: postal rates will increase to the new rate structure on January 22, 2012.
However, the unknowns for 2012 are many! Such as:
A possible exigent rate case filing. If some of the other cost-cutting issues on the table are not soon addressed, and with the $ 5.1 billion loss for the fiscal year 2011, the USPS will need additional revenue to survive 2012. If an exigent rate case were to happen, I’d say we would know by May or June 2012.
Service standard changes. The USPS filed new delivery standards with the Postal Regulatory Commission (PRC), increasing their delivery standard by one day. The PRC is reviewing the standard and will respond with their recommendations. However – and this is important - the USPS is not under any obligation to follow the recommendations and could just implement what has been proposed.
Closing of Post Offices. This big unknown falls under the political umbrella and is up against a fight from various members of Congress and the general public.
Closing of Postal Facilities. The USPS is reviewing the current 461 processing facilities to try to reduce the number by more than half, to approximately 200. These closures will have a domino effect on drop shipping facilities and overall mail delivery for both letters and flats-sized mail products.
Elimination of Saturday delivery. Daily newspapers and “News” publications with the end of the week in-home delivery will feel this proposed change the most. Adjustments for alternative mail delivery or change of production schedules may have to happen to keep publishers and advertisers happy.
These unknowns could affect everyone in the mailing industry. Spreading out the pain, so to speak!
In a nutshell…. 2011 was an interesting year, but 2012 will be very, very interesting with all of the challenges facing all of us in the mailing community. With all that is on the table, this will be quite a roller coaster ride. Just remember what the PMG said: “THE POSTAL SERVICE WILL ENDURE.”
Glenn Sollenberger – Director of Postal Affairs/Distribution
Bea Gabany – Presort & Mailing Manager