Proposed Structural Changes May Be Advantageous to Direct Mail as Suggested by USPS
The United States Postal Service (USPS) is proposing various drastic changes to direct mail. Some of the changes include reducing mail processing equipment by half, laying off about 35,000 workers and either closing or consolidating around 250 processing facilities. These proposed changes look alarming for those involved in the direct mail industry.
Sharon Owens, the manager of USPS for the Industry Engagement and Outreach in Consumer and Industry Affairs, said in an interview with PrintWeek that they would be better partners for those direct mail printers when they would be cutting costs and improving their efficiency. She said that any changes in the network would be able to make their service much more reliable, thereby benefiting direct mailers in the process. They would also be able to make use of transportation more efficiently.
Owens also said that the proposed changes would enable printers to make better use of programs of USPS like the Reply Rides Free. This program allows billers to add messages like promotions to bills and statements. This also allows them to receive rebates for any additional weight for as long as they are able to meet their growth targets.
Bob Hackett, Lehigh Direct’s sales and marketing executive VP in the Chicago area said that the direct mail industry would need to adapt to the changes that the USPS service may implement. In his interview with PrintWeek, he stated that when there are changes, there would be repercussions to be experienced. He further added that direct marketers are really savvy business people and with the many changes that were implemented for the past years, most of them were able to deal with those changes.
According to Hackett, most of their printing is inline, and it focuses on really large direct mail campaigns. Their small runs usually start at 750,000 and the number could go up to tens of millions. He also added that they receive a log of calls for digital print and print-on-demand. Hackett also suggested that from a logistics standpoint in relation to direct mailers, the impact may only be small.
Post Master General Patrick Donahoe proposed the said changes to revamp USPS service because it has relied on revenues from First Class mail for a long time. In fact, over the past ten years, the rate of mails has dropped significantly, with First Class mail dropping by 25%. It was about less than a year ago when Donahoe took over the position of Post Master General. He proposed the changes due to the decline in the volume of mail, and because it was already impractical to maintain a vast infrastructure on a national scale. The proposed changes are currently in the hands of Congress.