Postal Reform...And More

The following is a perspective by postal commentator Gene Del Polito for the Baltimore Postal Customer Council (PCC). The views expressed are the author's.

It won't be long before we will be observing the first anniversary of the enactment of the Postal Accountability and Enhancement Act (PAEA). This might be a good time to take stock of the impact the new postal law has had on our way of doing things.

To be honest, this year has been a period of transition. Some of our postal business has been conducted under rules stemming from the Postal Reorganization Act, and some business has been done in accord with the nation's new postal law. For instance, the recommendation, approval, and implementation of this year's new rates has been done in accordance with the 1971 Reorganization Act. The rate changes were preceded by a full-blown cost-of-service postal rate case, and the new Postal Regulatory Commission (PRC) fulfilled its function as if it were the old Postal Rate Commission, where its role was central to postal ratemaking as opposed to the more oversight function stipulated in the 2006 postal act.

Shortly after the 2006 postal rate case was brought to a close, the PRC and the U.S. Postal Service (USPS) began working (with customer input) on the development of new rules pertaining to the setting of rates for market-dominant and competitive postal services. The development of new rules has been given priority because of postal management's intention to secure another round of postal rate increases by mid-2008. The Postmaster General has said publicly that if the new ratemaking rules could be made effective by the end of November 2007, he would recommend to the Governors that the 2008 rate increases be conducted in accordance with the new postal law's inflation-cap rules, rather than pursuing new rates through the option provided in the new postal law for one last full-blown cost-of-service rate case.

Work also has been underway on the development of the new mandatory service performance standards for all market-dominant services required under P.L. 109-435. The PRC is expected to publish in the Federal Register its proposed recommendations for these new standards. In the meantime, however, work still needs to be done on the methods that will be used to measure and report on the USPS' mail service performance.

Sometimes, it's easy to forget that the call for the Postal Service to develop service performance standards is really nothing new. Service performance measurement has been part of the postal reform debate for well over a decade, and the Postal Service and industry representatives have been discussing the formulation of realistic service performance measurement standards and tools for quite some time.

From the outset, those who have engaged the Postal Service most intensely on this issue have made their views on this matter abundantly clear. For instance, it has long been maintained that service performance standards must reflect the Postal Service's real-world performance, and not goals that either are too stringent or too lax. Second, a viable service performance measurement scheme should be derived from the very tools the USPS itself needs to measure and improve its own levels of performance. Finally, since the vehicles for service performance measurement should be virtually identical those needed by USPS management, the cost to mailers for participating in and gaining access to information on service performance measurement should be minimal.

As exciting as new ratemaking and service performance rules might seem, it's important for everyone to remember that it's often the "little stuff," the seemingly niggling changes in postal mail make-up rules that can cause more a rise in the costs of mailing than some inflation-bounded rate increases. As one of PostCom's board members likes to describe the consequence of postal rulemaking: "Either God or the Devil can be found in the details."

One area that recently has garnered a great deal of Postal Service attention is addressing. This should not come as a surprise, since the address is the single most important mailing element as far as delivery is concerned. Think about it. If the whole purpose for sending a mailed communication is to make contact with the intended recipient, getting the recipient's address right makes obvious sense.

You'd never know that, though, judging by the volume of mail that still is considered undeliverable-as-addressed (UAA). Recent Postal Service data show that by 2008 UAA mail will reach some 10 billion pieces with a cost of some $1.6 billion. This is far from small cheese, and it's just one of the reasons why Postmaster General Jack Potter has made elimination of UAA a Postal Service priority.

Bad addressing (i.e., any address that's erroneous or incomplete) creates other adverse effects, which, if ignored, can cost a mailer a great deal more than just the cost of postage on mail that will never get delivered. Believe it or not, very few mailers cull their lists of names of deceased persons. Mailing to the dead, particularly after survivors have asked to have such mailings stop, leaves one with the impression that either mailers are insensitive louts, or that the cost of their postage is still too cheap. Mailing to people no longer alive, to someone's underage children, or to Bosco the dog serves only to stoke the ardor of those who believe that government should stem the flow of unsolicited, unwanted mail by creating mandatory "do-not-mail" lists, just as is the case today with "do not call," "do not fax," or "do not email" lists.

Every medium that's used for business communication and commerce must be designed to accommodate those constraints that are unique to that medium. An advertisement you'd publish in a newspaper is often nothing like the ad you'd air on television. Likewise, the ad you'd air on the radio often will have remarkably different characteristics than the written offer you put in the mail.

Mail is a medium, and it requires those who use that medium to observe constraints that are its own. For mail, the address is the equivalent to the ten digits used when we dial the phone, or the email address that's used to route email to its intended recipient. In today's increasingly automated mail processing and distribution environment, the error tolerance in postal addressing will be no greater than the tolerance for errors with phone calling or emailing. Postal addresses increasingly will be read by machines. Addresses that are wrong in any regard will fail to provide modern mail sorting equipment with the information they need to ensure proper routing and distribution.

In short, both the Postal Service and the Postal Regulatory Commission have taken seriously their charge by Congress to provide the nation with a modern system of postal rates and rules. Mailers have been intimately involved in all aspects of the work undertaken thus far. Just as the PRC and the USPS still have work cut out for them to do, now's the time for mailers to step up to their obligations within a system that will rely much more on automation than it did in the past.

Clearly, closer attention needs to be paid to high-quality addresses. The tools available to accomplish this are many. Now's the time to take those steps that will help ensure that every penny you invest in doing business by mail has the greatest potential of adding to your company's bottom line.