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Insight for Marketers – How USPS 5-Day Delivery Will Affect Planning

Bob Rosser

Last month, the Postal Service updated its website with more detail on the effects its five-day proposal would have on delivery times by product. Fortunately, this is still only a proposal. But it is one of many initiatives included in the USPS’ Strategic Plan to reduce costs and maintain its financial viability. Initially, many marketers looked at the proposal and thought it would have little impact on how they used the direct mail channel, as long as they could continue to enter mail at the destination entry points on Saturdays and Sundays.

Undesirable Consequences

Well, the USPS website now provides a much clearer picture of the five-day proposal and reveals undesirable consequences for marketers. Based on the scenarios described on the USPS website, it is easy to see how the five-day proposal would create many additional peaks and valleys for Standard Mail delivery, in addition to those that currently occur around federal holidays. For marketers using direct mail to drive activity to call centers, websites or retail stores, navigating USPS distribution under five-day delivery would require a shift in planning to achieve the in-home delivery results currently experienced.

Current Approach

With the current six-day per week delivery and processing schedule, the direct mail industry has used consolidated freight and transportation methods to earn Destination Entry Drop Ship postage discounts and achieve fairly predictable in-home delivery. To keep costs most affordable, consolidators build volume for specific USPS entry points and deliver to those points on a volume-based frequency. National Distribution Centers (NDCs) receive more frequent deliveries as mailers qualify more mail to those NDC destinations. Sectional Center Facility (SCF) entry points get less frequent deliveries as more time is required by a consolidator to aggregate volume to those entry points in order to build an efficient load.

The USPS is advising Standard Mailers that they need to plan for changes in answers to its Frequently Asked Questions for Advertisers. “You will need to evaluate what changes you will need to make in your printing and transportation schedules and contracts to support that day of delivery. You will need to assess what, if any, changes need to be made to the days of the week your drop-shipped mail is entered at a postal facility. Based on your evaluation, you will need to plan for the changes.”

Helping our Clients

IWCO Direct is committed to helping our clients maximize the value of their postage spend. Should the five-day proposal actually become a reality, the change of plans called for are non-trivial and require a thorough understanding of the end-to-end value chain.

Stop back next Monday when we’ll post a special Part II that examines how marketers can fully appreciate the impact of the proposed five-day delivery to their current approach and mail drop strategies.

– Bob Rosser
Director – Postal Affairs, Products and Services

link https://www.iwco.com/blog/2010/11/03/insight-for-marketers-how-usps-5-day-delivery-will-effect-planning/
Bob Rosser

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Bob Rosser

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