Association for Postal Commerce
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GET ANGRY...OR JUST LAUGH

The following is a perspective by postal commentator Cary Baer, who serves on the Board of Directors of the Association for Postal Commerce (PostCom) in behalf of Reader's Digest. Baer previously served as Chairman's of PostCom's board and was an active member of many other industry associations. The reader should note that the views expressed here are the author's and do not necessarily reflect the official views of this association.

I don’t know if I should get angry or just laugh at the recent USPS request inviting “commercial companies, entrepreneurs, and creative people  to inspire us” … . According to a USPS website, Innovations@USPS, the Postal Service is seeking suggestions for business concepts that relate to:

• New products and services
• Improved financial performance
• Enhancements to existing products, services or operations.

Clearly the Postal Service is asking for industry suggestions that would increase mail volume or reduce postal costs.

So let me see if I understand this. After:

• Increasing rates by 4% during a severe recession;
• Establishing new and, for some, difficult address location requirements to meet the more stringent requirements of a new and presumably better postal flat sorter;
• Establishing confusing and expensive to implement requirements to meet the intelligent mail bar code requirements, which provide little benefit to the average mailer;
• Establishing new address update requirements, known as move update, with severe penalties if a mailing fails a compliance test; and
• Establishing new requirements for “slim jim” mailing packages that could significantly increase the costs to use these popular mail piece formats.

After all these, and I suspect other USPS actions that will significantly increase mailer costs, impose mail package design constraints and restrict creativity, the Postal Service is now turning to its customers and asking for suggestions that would increase mail volume. That’s the definition of chutzpah.  

Before it embarked on many of the projects noted above the Postal Service should have reminded itself of the quote, often attributed to the Hippocratic Oath; “first do no harm”. 

However, with regard to the Postal Service’s request for ideas, it is in the industries own best interest to respond positively with ideas/concepts. However, in my view, for each idea/concept presented there is an obligation on the Postal Service to provide a meaningful response. Let me make my point “perfectly clear”. Just saying no to a concept/idea should not be considered an adequate response. Some explanation must accompany any rejection. I make this point because I’ve made, what I thought were a couple of worthwhile suggestions that were rejected without explanation.  

Since I believe one of my suggestions offered a very significant opportunity,  and because I’m stubborn, I will repeat that suggestion here in a more public forum. This  suggestion deals with an important address and mail processing issue. 

By its own accounting the USPS spends approximately $2  billion annually to handle, process, forward, deliver, return or destroy incorrectly addressed mail.  Unfortunately in spite of significant efforts(in my view many misplaced) on the part of the Postal Service this expense has been relatively unchanged over at least the last ten years. Although, given the current recession, we should expect fewer Americans to relocate this year. This should lead to a reduced USPS address quality related expense. However, it will still remain a huge expense.  

In an attempt to dramatically reduce this address quality related expense PMG Potter, in a major Postal Forum speech a number of years ago, set, as a goal, a 50% reduction in this expense. In the intervening years, as best can be determined, there has been no meaningful change in this expense. Indeed, about a year ago USPS Memphis address quality managers admitted that it had only recently been decided how to measure and determine if the PMG’s goal was being met.  

Why has the Postal Service been so slow to achieve any progress on this significant financial goal?  

In my view the basic reason, besides a lack of management leadership or Board of Governor oversight, is that the USPS has been acting as a regulator to try and solve the problem. All that has been done is to add additional and more stringent requirements regarding how soon before mailing a mailing list must be matched against a USPS approved NCOA based list.  

The reality is that there has been no fresh thinking on this issue.  

As you might expect I’ve got a thought on impacting this $ 2  billion expense. 

First, it has been revealed that $800  million, or 40%, of this $ 2  billion of expense is incurred by the return to sender, of undeliverable First Class mail. In other words, this undeliverable mail, from all across the country is returned to mailers, all across the country. This is sheer madness, and should be stopped, or correctly charged for. It must be noted that the very first NSA(negotiated service agreement) has provided the obvious solution to this problem. That is, provide the undeliverable information electronically, without returning the mail piece.  

Significant requirements are in place in order to receive the automatable First Class mail rate, the lowest rate available. Why not add one more requirement? That requirement is, if an automation rated First Class mail piece cannot be delivered or forwarded, the mailer, will not be permitted to receive the mail piece back, but rather must be electronically notified. The mailer should be provided with an electronic composite of the delivery address, including the addressee’s mailer provided account number. The Postal Service already does this for periodical(magazine) mailers. This will permit the mailer an easy, low cost update of their mailing list. The mail piece should then be destroyed. This was essentially the agreement in the very first NSA. 

If the mailer desires, or for legal reasons, needs the mail piece returned the mailer should pay the return cost. I would guess that this cost is at least $1.00. Given the $1.00 + charge, I believe those mailers would quickly determine how to process bad address information without the mail piece, and still avoid any legal consequences. Frankly most mailers would probably realize that it can be done at much less than their current cost. 

This change, the non return of the undeliverable mail piece for automation rated First Class mail, should eliminate a significant portion of that $800  million expense. 

To make it easier to gather support for this proposed change I would use much of the savings that will result, to reduce the rate for automation rated First Class mail. If automation rated First Class mailers share in some of the processing savings that the USPS will achieve it should make the program an easier sell. Indeed, a lower automation rate might entice more mail into this most efficient category.