2021-2031 USPS POSTAL INCREASE PLAN HAS BEEN ANNOUNCED
An Unprecedented Change Is coming that will affect most of us in the weeks, months, and years to come!
The ACMA (American Catalog Mailers Association) has authorized me to pass along this very important “members only” article to you. It is important that anyone involved in direct mail, pays attention to the impending and drastic postal rate hikes being proposed. These are not small incremental ones. These increases, if implemented, will have such an impact that they will change the way we market and utilize direct mail in those efforts, and they affect more than just catalog mail.
The ACMA is in the trenches fighting the good fight to help keep Direct Mail going. Their mission is to blah blah blah. If you’d like to assist them in any way, please, CLICK HERE and become a member of the ACMA and help provide the funding it so desperately needs.
This movement by the USPS has been in the works for some time now and is a dire threat to the direct mail industry. While the pandemic has leveled the marketing industry, among many others, the USPS has been working its plan to regroup and restructure. The result could likely cripple an industry already mired in loss. At what point is it NOT feasible to pass the majority of the expense on to the marketers who rely entirely on them for their Direct Mail efforts and, focus their energy internally on efficiencies? This threat is real and has existed for years. Although we regularly see incremental postage increases, this change could likely rock our world in a way we have yet to experience.
The Postal Service unveiled its long-awaited plan today. It details how the USPS will avert a $160B projected 10-year loss:
- +$24B new revenue
- +$44B new pricing
- +$34B new cost improvements
- +$58B in legislative relief
We can speculate the following: The $44B in new pricing revenues could imply a 60% increase to rates on average, by the end of 10 years. But the PMG said repeatedly they “would be judicious” in the use of rate authority. No time horizon for increases was specified. PER The Washington Post, March 23, 2021: Postmaster General Louis DeJoy recently unveiled plans for the largest rollback of consumer mail services in a generation, part of a 10-year plan that includes longer first-class delivery windows, reduced post office hours and higher postage prices. Portions of the initiative, already made public, have raised alarms from postal advocates, who say they could further erode agency performance. Mailing industry officials warn that substantial service cuts could drive away business and worsen its already battered finances.
The plan, which he told lawmakers was eight months in the making, is meant to reset expectations for the Postal Service and its place in the express-shipping market. It is couched in the view that the historically high package volumes of the pandemic era will persist and reorients the agency around consumers who don’t rely on the mail service for letters, advertisements or business transactions as much as they once did.
The blueprint would have first-class mail ferried cross-country on trucks instead of airplanes and introduces new products to help commercial shippers move packages more efficiently.
The agency projects its package business will grow by 6 to 11 percent through 2025 as consumers maintain online shopping habits built during the pandemic. The Postal Service plans to open 45 package processing annexes nationwide to expedite shipping and will look to replace mail sorting machines with package sorters, infrastructure the agency has needed desperately for years.
The postmaster general also acknowledged in the interview the long-term declines in first-class mail volume, the agency’s most profitable product, but one that has been increasingly overtaken by more convenient forms of communication.
Between the price increases and slowing service standards, mailing industry officials have warned the Postal Service that they are prepared to find other ways to do business. When delivery times hit their worst marks in decades over the holiday season, banks, utilities, and credit card companies began encouraging customers to switch to paperless billing and statements, moves that could have long-term consequences on the Postal Service’s bottom line. Little in DeJoy’s plan seeks to stem those losses, and the plan codifies slowdowns for nonlocal first-class mail, adding as many as two days to delivery timetables for items sent further than 930 miles.
“I’m not competing for a change in medium,” he said in the interview. “I can’t stop electronic communications. What I can do is recognize that I cannot stop that. That’s kind of what we’ve done here. So, we are moving forward. I’m not chasing mail volume down because I’m going where we see growth.”
ACMA continues an aggressive daily outreach to members of Congress seeking support for our “Stop the Second 2021 Rate Hike” effort as well as to get more elements we feel are needed into the draft postal reform legislation under current consideration. It is particularly important to get aggressive constituent outreach, particularly to Republican offices.
The USPS has published more details in a 58-page write-up available here. The AMCA will continue to study this material, hold meetings with postal leadership, do analysis and compare notes with other mailing industry associations so they can report further thoughts and outcomes to their membership.
** UPDATE: Round 1 of the proposed increased is set to come into effect sometime in July 2021.
Other ways that you can help is write to your respective Congressional Representatives and ask them to ACT NOW and tell the Board of Governors and Postmaster General to stop the rate hike. We have the power if we all band together to stop this. This one WILL affect all of our lively hoods and force us to rethink our strategies. Please help!
Information reported by Laura Ellis in partnership with the ACMA