An Editorial
The job I’m best known for – and don’t earn any money for doing – is evaluating overall USPS service performance based on the data we see for our customers’ mail. Every Monday, I post the performance statistics for the prior week and add a little snappy patter in an attempt to make it interesting. Follow SnailWorks on Linked In and you can see it every week. You’re welcome!
Based on those observations, and the deep dive into the weeds that such analysis requires, I want to share a few general observations and even a couple of opinions.
First, the Bad News
First-Class Mail delivery is getting slower. From 2021 through 2024 to date, First-Class letters and flats have slowed down each year, and that pattern shows no signs of breaking. I must expect that it will be slower in 2025. Today, on average, a First-Class letter takes about a day longer to deliver than it did in 2021. Delivery of First-Class flats have become very unpredictable since the FSS machines were taken out of service.
Volumes are dropping. First-Class Mail continues its precipitous drop in volume, driven largely by the continued conversion to online billing and payment. Marketing Mail volume is dropping as well, driven by several factors. Certainly, the ever-increasing postage rates are a part of it, but there is also far less marketing mail from financial verticals – specifically credit cards and mortgage refinance. Interest rates are the driver there. Similarly, insurance marketing is way down as insurance companies reevaluate their business models in light of costly natural disasters. Presumably, these volumes may return as interest rates drop and business conditions improve. We’ll see.
Postage is continuing to climb. PMG DeJoy has shown no inclination towards exercising anything less than his full rate authority. While there will be no rate increase in January 2025, there most certainly will be one in July 2025. The PRC has signaled that they are not pleased with the rate of increases they have been seeing and may reevaluate the rate-setting process.
On the Other Hand…
First-Class Mail delivery was supposed to slow down. The PMG was clear that by eliminating most air transportation mail would be slower. That’s why he changed the First-Class service standards. As such, it is hardly a surprise that First-Class Mail has slowed down one day. Most mailers use First-Class Mail because they legally need to (invoices, statements, etc.), or to heighten the perceived value of advertising mail. As Mr. T would no doubt say, “I pity the fool who uses First-Class Mail for speed!”
But First-Class flats? I’ve got no other hand for those.
Marketing Mail delivery remains strong. First-Class Mail gets all the press, but Marketing Mail is very reliable if you truck it to a destination facility. In almost all cases you can expect Marketing Mail to be delivered in two or three days from induction at a destination SCF. Work share works! We have not seen the corresponding slowdown that we’ve seen on FCM.
The 2025 USPS Promotions will let you save significant postage all year. The promotions for 2025 are totally different than they have been up to this point (read the other article in this newsletter). In virtually every case you will be able to “stack” Informed Delivery and Sustainability promotions on top of a “primary” promotion. It’s easier than it sounds but does require planning and thought. You can plan and think, right? Executed well you should be able to knock at least 5% off postage all year.
So, There’s Plenty to Worry About
There is certainly a lot of uncertainty facing the mailing world, and there are things to worry about – the erratic network update will most likely create isolated crises through its deployment, and prices are likely to continue rising, threatening future volume.
Still, direct mail remains a unique marketing and communications channel. And all the other channels have problems of their own – digital and social channels are getting more expensive and crowded all the time.
In a sense, it’s always the end of the world as we know it…but it’s not the end of the world.