Last week the USPS unveiled a 10-year plan to fix its budget problems. The initiative focuses on aggressive cost-cutting, primarily by moving to a five-day-per-week delivery schedule, and an exigent (emergency) price increase. Cost savings from the five-day proposal are estimated to be $3 billion annually.
While the Postal Regulatory Commission’s (PRC) decision process is expected to take six to nine months, approval from Congress is also required to switch to a five-day delivery schedule. If approved, the Postal Service hopes to begin implementing the five-day schedule later this year, although industry observers expect the approval process to push implementation to at least mid-2011.
At IWCO Direct, we support in principle the plan to drop Saturday delivery, especially now that the USPS has clarified that mail processing and transportation will continue on weekends. While businesses and consumers will likely require some initial adjustments, the USPS is confident that effective delivery of mail following a two-day weekend or a three-day holiday weekend should not be impacted. Mailers can embrace 5-day delivery by adjusting their response models accordingly.
The USPS plan also emphasizes the importance of the mailing community’s efforts to pass the Postal Reform and Accountability Act in 2006. At IWCO Direct, we worked diligently with our industry partners to inform legislators of the value of the postal service to the American economy. One of the most important measures of the Act was linking future postage increases to the rate of inflation. This provides companies such as ourselves – and our customers – the necessary time to plan for a postage increase. We are confident that new postage increases will respect the intent of the 2006 Postal Accountability and Enhancement Act.
Marketing Services Manager
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