It’s been a busy first half of the year for those of us involved in postal issues. From concerns about postage rates, to operational changes that resulted in service performance challenges, to new options for connecting mail and digital, we’ve had a lot of moving parts to track this year. Let’s jump in and see where things stand.
It took three tries for the Postal Service to present a CPI-based rate proposal that passed muster with the Postal Regulatory Commission (PRC). Originally planned to take effect in late April, new CPI rates were not implemented until May 31.
On June 5, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision on the appeals of the PRC decision to grant the Postal Service a temporary “exigent” rate increase. We covered that news here. The court ruled that the PRC was correct in limiting the revenue to be collected by the Postal Service through the exigent rates, but questioned how the PRC calculated the amount of revenue to be recovered.
Based on the original PRC decision, the Postal Service was expected to reach the revenue limit from the exigent rates later this summer, which would have resulted in the roll-back of the exigent portion of postage rates. The PRC is currently reviewing its calculation of the revenue limit. The mailing industry has encouraged the PRC to act quickly to minimize the possibility of rate disruptions.
Operational Window Change
The Postal Service launched an Operational Window Change (OWC) in January that altered the cadence of mail processing throughout the day. This transition proved to be more challenging than anticipated, resulting in a greater impact on service performance and timely mail delivery than was expected. The effect of the OWC was compounded by the severe winter experienced in many parts of the country.
At IWCO Direct, we’ve seen significant shifts in the pattern of Standard Mail delivery once mail has been entered at Sectional Center Facilities (SCF). This led us to modify our modeling to target in-home delivery to accommodate some of these changes. The mailing industry has shared our collective data and delivery concerns with USPS management, and they have responded with a renewed focus on service performance. Additional facility consolidations planned for this year have been delayed to allow the USPS operations team to focus on delivery performance. Since May we have seen significant improvement in service performance and in-home predictability, and expect that trend to continue.
The Postal Service is moving toward trend-based evaluation of mail quality based on electronic mailing documentation and passive barcode scans as mail moves through the USPS processing network. This is replacing the physical review of mail using MERLIN equipment. The Postal Service has developed online Mailer Scorecards to allow mailers to track various quality metrics related to their mail.
Scorecards were a hot topic at the National Postal Forum in May, not just because more companies are interested in using it, but because the mailing industry is concerned about the quality of data in the scorecards. The Postal Service has been working to correct the data issues and has launched a robust testing protocol to verify the accuracy of the scorecards. The Postal Service will not begin using the metrics reported in the scorecards to drive postage assessments for errors above published thresholds until all stakeholders agree that the data is accurate.
Bridging Physical and Digital Communication
The Postal Service continues to encourage using marketing mail to link to digital experiences. Two of this year’s USPS promotions, Emerging and Advanced Technology and Mail Drives Mobile Engagement, are designed to reward mailers who use a variety of techniques to make direct mail the springboard into engaging with customers and prospects through compelling online or mobile interactions. The Postal Service will also expand the pilot of its “Real Mail Notification” test into New York City this fall. Real Mail provides participants with visibility into the contents of their physical mailbox before the mail arrives, including the option to click on images of mailpieces to get additional information about their offers.
Enjoy your summer break as it promises to be a busy fall in the postal world. We’ll continue to track all these issues and more, so stay tuned to SpeakingDIRECT for the latest information on postal issues that will affect your business.
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