Second quarter Revenue, Pieces and Weight data released by the US Postal Service this week confirmed the continuing decline in mail volume, especially first class mail. While revenue for the three month period ending March 31 was up by 3.5% from the prior year, the increase was entirely due to last year’s price hike, as total mail volume dropped by 3.3%.

First class mail was also down by 3.3%, but virtually all of the decline was in the highest priced sub-class, single piece letters, which declined by 5.8%. The average revenue per single piece was 51 cents. By contrast, first class automation presort volume remained about the same as the prior year, dropping just 0.2%. The average revenue for each automated presort piece was 34 cents.

Standard mail pieces continue to slightly outnumber first class, with about 51% of the total volume. Standard mail declined slightly less than first class, down 3% from 2007. The average piece of standard mail brought in 21 cents in revenue.

The steepest decline in volume was in the Postal Service’s highest priced product, Express Mail, which declined by 14.3%. While Express Mail is the most expensive option offered by the USPS, it now represents just 1.2% of total revenue.

Priority Mail declined by 4.3%, reflecting the softening of the overall package delivery market. Each piece of Priority was worth $6.23 in revenue. Interestingly, while the average weights of first class and standard mail pieces dropped slightly from the prior year, the average Priority Mail piece was heavier, possibly reflecting increased usage of Priority Flat rate boxes.

We noted the bizarre editorial in the Wheeling News Register a while back that accused the USPS of having a ’sleazy strategy’ to take advantage of the apparently incredibly unwitting population of West Virginia. While criticizing the Post Office is a time honored tradition in this country, telling your subscribers that they’re too stupid to buy stamps seemed a risky strategy, especially considering the shaky finances of the newspaper industry these days.

The Molokai Dispatch, way out there in Hawaii, also expressed surprise at the Register editorial, and thinks the stamps are a good idea. But the Dispatch then proceeds to go off on a peculiar tangent of its own, touting the stamps as an investment opportunity! “An investment of a few hundred dollars worth of stamps may not pay off significantly in three or four years, but over a longer period of time- like a decade- people will start realizing several dollars worth of saving every month.”

How this is supposed to happen is not explained. If prices rise in the next ten years at the same rate that they did over the last ten, we could expect the price of a stamp in 2017 to be about 52 cents. So if you buy the “few hundred dollars worth of stamps” that the Dispatch recommends, you would, in 2017, save about 11 cents for every letter you send.

I don’t know about you, but if I mail ten letters a month, I’d be surprised. There were 42 billion single piece first class rate letters mailed in the US last fiscal year. If you divide that by 300 million Americans, that gives you a total of 140 pieces of mail per person, which works out to just over ten letters a month. At 11 cents savings per letter, that gets you a whopping return of $1.10! And of course, you could have just put the money in a run of the mill savings account.

I’m waiting for an editorial that finally puts the ‘forever’ stamp in perspective. That editorial would point out that the real story of the rate case is the shift to shape based pricing, with all of its myriad implications. It would also point out that ‘forever’ stamps are old hat in many European countries, where no one has grown fabulously wealthy from speculating in them, and no postal authority has gone bankrupt because of them.

That editorial would conclude that ‘forever’ stamps are convenient, and do just what they advertise- allow you to buy the right to mail a letter any time in the future. If that’s what you’re in the market for, buy some. If not, don’t. End of story.

It just gets weirder. I thought I’d heard it all when that West Virginia newspaper editorialized that the ‘forever’ stamp was a ’sleazy strategy’ on the part of the USPS to hoodwink the innocent consumers of West Virginia. Now a letter to the editor of the Boston Globe explains how the stamp is actually a scheme to benefit the wealthy!

The class system in postage stamps

Update: But wait! There’s more- the Corvallis Gazette Times gets points for noting that the real story was the rate increase, not the ‘forever’ stamp, but they lose them quickly for a couple of clueless comments: -

-”What does it say that the U.S. Postal Service actually rolled out its idea for a “forever” stamp in May 2006, and it’s only now being delivered as news? ” Ummm, aren’t you the people who deliver the news? Are you saying you weren’t paying attention back in May?

- “Unresolved is the question of how often and whether “forever” stamps will be updated with new, different editions at the same rate.” OK now I’m not being sarcastic here- I really have no idea what this is supposed to mean. Is the editor afraid that the stamps will always use the same design? Why would you need “new different editions”. All the PO does when the rates go up is to start selling the ‘forever’ stamps at the new rate. We’ve already done that several times with the Breast Cancer stamps. What does he think is “unresolved”.

- Last and certainly not least, there’s this puzzler:”U.S. stamps already are valid forever; it’s the postal rate that changes with increasing frequency. But with no denomination on the forever stamps, perhaps we won’t notice it as much. In fact, our guess is that the Postal Service is counting on that.” Yeah, I guess the fact that I’ll actually have to pay for the stamps at whatever the current rate is wouldn’t be enough of a reminder.

‘Forever’ stamp’s real value is marketing

… or maybe ever?

The Wheeling News Register apparently thinks its readers are too stupid to be trusted with “forever” stamps. The paper somehow comes to the conclusion that offering customers the option to buy a stamp that will always be good for the first class letter rate, regardless of how much that rate goes up, is a “sleazy strategy”.

Why? Good question. Apparently it has something to do with a roll of “clear tape” the editor bought on sale a long time ago, that he seems to have misplaced. Or something like that. See if you can figure it out.

‘Forever Stamp’ Not Bargain for Consumers

Most of the reaction to the rate case decision yesterday was pretty predictable, but as Postcom has pointed out, the fixation on the ‘forever stamp’ was surprising. The predictable is typified by the blogger who noted “I can remember when postcards were only 4 cents each. 1963..”. Well yes, and candy bars and sodas were 5 cents. And gas was 19 cents. And the minimum wage was $1.25. And your point is…?

Probably the most worrisome comments were found in the Salt Lake Tribune story that found customers really weren’t that concerned about the rate increase. Not because they felt the USPS deserved the money, but, as one customer at the PO put it, ‘”I’m here to get my passport,” she shrugged. “I rarely mail anything anymore. I do everything online.””

The PRC issued the following press release today:

WASHINGTON, DC, FEBRUARY 22, 2007: The Postal Regulatory Commission will announce its Recommended Decision to the Governors of the U.S. Postal Service at 11 AM, Monday, February 26, 2007 in its Hearing Room located at 901 New York Avenue, NW, 2nd Floor, West Tower, Washington DC.

The decision will include recommendations on postal rates and fees affecting all mail users. The decision will also address the request to establish a “Forever Stamp” that would allow consumers the opportunity to purchase a non-denominated, non-expiring stamp that would be valid regardless of future rate changes.

From the USPS:

DMM Advisory

Pricing and Classification — keeping you
informed about the prices and mailing standards of the United States Postal
Service

We updated our proposed mailing standards that accompany the price change proposal currently before the Postal Regulatory Commission (PRC). The revised standards, published at www.usps.com/ratecase, respond to comments we received on previous versions.

In addition to the updated proposal, you can find our earlier proposals and side-by-side comparisons of today’s prices and those that are currently under review by the Commission. Our Web site also provides helpful information for mailers, including frequently asked questions, press releases, and Mailers Companion and MailPro articles related to the pricing change. We encourage you to review our proposed mailing standards and use our electronic tools as you prepare for the pricing change.

Press release from Window Book:

Cambridge, MA February 15, 2007 — USPS Regulation changes in the Spring of 2007 will be transforming the mail preparation method once again. In 1996, Mail Classification Reform was implemented, with new categories and mail classes introduced to meet customers’ needs and simplify postal operations. These categories described the type of communication, delivery speed and the extent of sorting. The cost structure for these various services encouraged mailers to prepare proper addresses, use barcodes and presort their mailpieces for faster processing and lower costs. Mailers who were running the most efficient mailing operation possible were able to save more on postage with worksharing discounts and smart addressing.

With the upcoming 2007 Rate Case, the Postal Service will be placing more emphasis on mailpiece shape in setting new rates. 2007 rates have not been finalized at this time, and mailers are still in the dark as to what the final new qualification and preparation rules will be. It is more critical than ever for mailers and shippers to rethink their packaging choices, and to make changes to current systems to maximize efficiency.

Preparation is key, but that doesn’t mean that mailers will have to spend more time on manual labor, if they utilize the right software. The need for quality mailing software has increased dramatically over the last several years, and will continue to do so with future rate cases planned by the USPS. Mailing software that manages all postage payment methods, reduces labor, and increases transactional speed and accuracy is no longer a luxury, but now necessary to help organizations avoid the profit leaks that can compromise successful businesses.

Until processing categories are defined by the USPS, any rate estimates would be purely speculative, but you need to inspect both the new requirements and your system to make sure your software has capabilities to easily adept to upcoming changes in the industry. Software should have the capability to calculate the new rates and generate updated PAVE-approved USPS forms. This information is essential to improve management of your postage funds in preparation for the new rates. Invest in software that has these features integrated. Don’t settle for a short term solution because you will end up spending more time and money in the long run.

Make certain that your software choice has the capability to change preparation methods to meet the incentives of the new rate case. Check to see that you can automate your mailing system for getting the best drop ship discounts at the correct delivery point, barcode, and able to make last minute changes including removal of spoilage. Automating these operations will benefit both you and the postal service by maintaining low cost for everyone.

Expedite mail acceptance and verification with USPS. Utilize programs such as drop ship scheduling via FAST, and electronic postage payment with PostalOne!®. These programs are designed to make mailing and drop shipping more efficient, and to save mailers time.

Examining your software to see if it can adept to the new changes will reveal your operational strengths and weaknesses, helping you make better management decisions for greater productivity. Software that has the capability of handling all mailing activities and lets you exchange postal data among in-house systems and end-users for acceptance and transportation planning makes it easier for your organization to deal with an ever-changing workforce and postal regulatory and rate changes. Be prepared.

National Postal Forum
Window Book will be showcasing at the National Postal Forum again this year. If you plan on coming, make sure to visit our booth #623 and learn about how you can stay ahead of the postal changes in 2007. Window Book participates on many committees, advisory boards, and mailing associations, including MTAC (Mailers Technical Advisory Committee), and is in the position of providing you with the latest and the best practices to help you keep on top of the ever-changing mailing landscape.

About Window Book
Window Book (www.windowbook.com) is the premier mailing and shipping software partner to lettershops, corporate mailers, and fulfillment houses. Window Book’s best-in-class postal solutions include: Mail.dat®, post-presort data management, entry planning, drop shipping, postal documentation & statements, postage accounting, meter and stamp management, delivery confirmation, manifesting shipping system, FAST, and PostalOne!.

Contact information
Lisa Bowes, 617-395-4570
Sooyoung Han, 617-395-4573

CINCINNATI, OH  To help U.S. commercial marketers understand the new postal rate structure and plan for new rates when they are anticipated to take effect next spring, Harte-Hanks, Inc. (NYSE: HHS), a worldwide direct and targeted marketing solution provider, will host a complimentary, scheduled one-hour Webinar on Thursday, December 7, at 2 p.m. EST.

To register, visit: http://harte-hanks.com/Webinar

“Marketing organizations have many questions about how they are going to cope with increases that — as proposed — are striking in some niche categories,” said Robert J. Colucci, corporate officer and vice president, Harte-Hanks. “This is a difficult rate case. Marketers need to understand that whether or not a mail piece is a letter, flat or parcel, and whether or not existing postal automation can accommodate that mail piece, create a huge difference in what mailers will pay once the new rates take effect as early as May next year. We know that marketers are making decisions now about their media mix, mail design, and how they plan to leverage the mail medium in mid-2007. This Webinar is intended to give clear, proactive direction on how marketers can optimize their direct mail resources.”

Experts scheduled to address the Webinar audience are Colucci, who also serves as a member of the Board of Directors for The Mailers Council, a coalition of more than 50 corporations, non-profit organizations and major mailing associations who represent for-profit and non-profit mailers and rely on the U.S. Postal Service to deliver correspondence, publications, parcels, greeting cards and payments; Charley Howard, vice president, postal affairs, Harte-Hanks, and Sharon Daniel, manager, mailing standards, U.S. Postal Service (USPS). Howard also serves as an industry representative on the Mailers’ Technical Advisory Committee, an advisory group on postal issues that includes USPS representatives.

PRESS RELEASE Harte-Hanks: Complimentary Webinar on December 7 to Help Marketers Plan for Proposed Postal Rate Structure

In a letter to USPS Chief Operating Officer Pat Donohoe, BMG Columbia House VP Clifton B. Knight Jr. says that the proposed new Postal rates and regulations “will make it impossible for us to remain in the business of selling music and video products by mail”. Knight asserts that his company will face increases of “62% to 115%” in its product shipments. And if the company is “constrained to stop using the mail for product shipment”, it will “inevitably reduce, if not entirely eliminate” its “use of mail for marketing and promotional purposes”.

Knight says the problem isn’t just the rates- it’s the fact that the USPS is reclassifying his company’s product from flats to parcels, even though Knight claims BMG has gone to “considerable expense” to make sure that their CD and DVD shipments meet the requirements for automated flats.

Letter from Clifton B. Knight Jr to DPMG Pat Donohoe