Industry Supports Proposed USPS Delivery Cutbacks

The U.S. Postmaster General John E. Potter ticked off a lot of businesses and consumers with his Jan. 28 appeal to Congress to let him reduce postal delivery. Somewhat surprisingly, most in the catalog mailing and printing community side with Potter on the issue.

Potter asked Congress to allow the U.S. Postal Service to cut mail delivery from six days to five days a week to help combat the agency’s rising costs and falling mail volume. (Federal law has mandated a six-day mail delivery schedule since 1983.) If Congress and postal officials approve the measure, it could eliminate mail delivery on either Saturdays or Tuesdays, the system’s slowest days.

A reduction in mail service is inconvenient, admits John Rogers, vice president of multichannel marketing for outdoor gear and apparel merchant The Orvis Co. But he supports the USPS’s need to reduce expenses. “The alternative is an exigent postal increase that is not good for anyone, including the USPS, as evidenced by the downward trend in mail volume since the last major increase.”

The Postal Service is projected to lose more than $6 billion for this fiscal year. Thanks to the increase in e-mail use, as well as the general economic slowdown, USPS said mail volume dropped by 4.5% — or more than 9 billion items — in 2008, to about 202 billion pieces.

Potter also requested that Congress alter the USPS’s payment schedule for funding retiree health benefits. (The USPS must prefund health care benefits for all its retirees.) In 2008, these costs came to $7.4 billion — nearly 10% of the annual operating budget, he said.

If the five-day delivery plan is implemented, it would save the USPS in fuel, vehicle wear and tear, and wages paid to city and rural carriers, says Dan G. Blair, chairman of the Postal Regulatory Commission. “The primary risk is that mailers of time-sensitive items such as bills or bill payments may be concerned that the reduction in delivery will delay the receipt of their mail,” Blair says.

For catalog mailers, a key disadvantage would be the limited in-home dates available for catalogers causing marketing strategy changes, says Don Landis, vice president of postal affairs for printer Arandell Corp.

What’s more, he adds, “the possibility is printer and mailers would have limited drop shipment appointments available, causing potentially not meeting an in-home date at all.”

But most catalogers say they will learn to live with one less mail delivery day. Gifts cataloger Miles Kimball fully supports Potter’s request for shaving a day off delivery — providing it cuts a slow volume day, like Tuesday, says its president/CEO Stan Krangel.

He encourages the Postmaster General to continue to work on taking cost out of the system. “Our lives depend on it,” Krangel says, “and, quite frankly, so does the viability of the Post Office long term.”

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