Last week representatives from the mailing industry met with USPS in Washington DC. Here’s a quick recap of some of the topics discussed:

• The biggest announcement, in my opinion, was they finally announced the end of POSTNET! Starting January 2013, an Intelligent Mail barcode (IMb) will be required to get automation discounts. They’ve pushed this back many times before, but I think they really mean it this time.
• And second biggest was their announcement that Full-Service IMb will be required for Automation discounts in January 2014. While they were pretty confident about this date, I don’t think they’ve thought this all the way through, and this date is likely to slip. But that doesn’t mean mailers shouldn’t get started on this now. The goal is to have 100% of automation mail tracked using IMb by 2014.
• “Did you hear the one about the unstamped letter? You wouldn’t get it.” — CFO Joe Corbett, budding comedian
• The mobile barcode incentive will be back this summer. First-Class and Standard mailers who include an approved mobile barcode on their pieces will get a 2% discount on their mail. To learn more about this incentive, including the new requirements for where the barcode goes, see the documentation on RIBBS.
• Postmaster General Pat Donahoe laid out his new business plan for USPS. In order to get out of the financial hole they’re in, USPS wants to:
  • Pull out of the government healthcare system and self-insure.
  • Re-align the postal network, including several thousand office closures, along with closing over half the sorting facilities. This could also include eliminating Saturday delivery, pending Congressional action. For a complete list of facilities they want to close, see the network realignment page. Mailers should still be able to drop their mail at their existing centers and still get the SCF discounts.
  • Encourage more employees to retire (almost half of the staff is currently eligible to retire).
  • Increase the cost of a First-Class stamp to $0.50.
  • Eliminate retirement pre-funding (this would also require Congressional action).
  • All together this could save USPS $20 billion by 2016, which would ensure they stay in the black.
• Donahoe said “We have to act on this now. Putting a couple of pieces together and holding your breath is not the solution. We will be in an untenable position in five to six years. It is hard to get the message across. Everyone can’t have their cake and eat it too. When you look at our outlook and do nothing, we look like Greece.” And it’s interesting to note, Congress doesn’t seem as ready to assist USPS as the EU has been ready to bail out Greece.
• The PMG also noted that his big dream is to have all “large” mailers using “seamless acceptance”. Basically seamless acceptance is Full-Service IMb on steroids – the USPS will just take their mail, then bill them the rates later. This assumes that those large mailers are preparing easy-to-process mail, and that the USPS will bill them accordingly. For “smaller” mailers, he envisions them dropping their mail off at their local post office window, not the current Business Mail Entry Unit (BMEU). They didn’t define what makes a mailer “large” or “small”.
• Productivity is up, but they can only cut so much. USPS will pay their employees first, suppliers second, but won’t be able to make the $11 billion payment to the government for health pre-funding this year.
• At some point they want to move to a single account/single permit world, rather than have each company register a permit at every drop location. But this system hasn’t been built yet, and won’t be until 2013 at the earliest.
• The MTAC meetings are getting restructured this year to encourage more participation and communication. This means I’ll be a little busier at the next MTAC.

So big changes are afoot! We should hear a lot more about the IMb changes between now and NPF.

barcodes · direct mail · events · Full-Service · Intelligent Mail · mail preparation · mobile barcodes · MTAC · National Postal Forum · NPF · POSTNET · prices · QR codes · USPS

Last week at MTAC, USPS announced the official “retirement” date for the POSTNET barcode. Starting January 2013, POSTNET will no longer qualify mailers for automation discounts. If you haven’t made the transition to IMb yet, check out the Intelligent Mail resources on our website to learn more.

Stay tuned for a recap of MTAC coming soon.

barcodes · direct mail · Intelligent Mail · mail piece design · mail preparation · mailing software · MTAC · POSTNET · prices · USPS

Four times each year, USPS® invites members of the Mailers Technical Advisory Committee (MTAC) to Washington DC for updates on finances, operations and new projects on the horizon. The MTAC meeting was held this month, and here’s a summary of what was announced.

Finances

The financial situation for USPS is dire. Even after suspending their FERS retirement payment and continuing to cut costs and personnel, it’s anticipated that they will be insolvent as early as August of next year. However, USPS CFO Joseph Corbett has declared that postal operations will not stop at that time. Several bills have been drafted in Congress to try and right the postal ship. None have gone beyond the markup phase.

For a while there was talk of another exigent price filing, but USPS has decided against it. Instead, a normal price increase within the CPI cap is planned for January 2012. Expect postal rates to go up around 2%.

Operations

While Standard Mail® continues its slow ascent, First-Class Mail® volume is dropping at an alarming pace. By 2020, First-Class Mail could drop a staggering 48% from today’s volume. Today’s postal infrastructure is designed for much more volume, so they plan to cut the number of mail processing plants by over half. This could save up to $3 billion each year. However, mailers are concerned that the drop in service will result in a further drop in mail volume.

In the meantime, USPS is evaluating the way costs are attributed throughout the mail system, including costs for the Intelligent Mail program. Costing helps determine how worksharing discounts are calculated, so these discounts may change after the study is complete.

Service standards

USPS continues to struggle with meeting the current service standards. However, the USPS Inspector General thinks relaxing service standards by one day could save $1.5 billion. This would mean that local First-Class Mail, today delivered the next day, could take another day to deliver. Eliminating the night sort and prep would save quite a bit. And the mailing industry seems to be okay with that so far — as long as they are able to predict delivery.

Move Update changes

After pushback from several mailers, USPS will no longer count moves marked Moved Left No Address (MLNA) or Box Closed No Order (BCNO) when verifying mail for Move Update compliance. This reprieve will last one year. After which any MLNA/BCNO addresses older than 95 days will count toward the minimum.

USPS continues to push forward, cutting costs and trying to make more revenue. The next big update will happen on January 22, 2012, when they implement the new “two plus two” update schedule. Basically, there will be two major and two minor updates each year, giving mailers more advance notice of changes.

The next MTAC meeting is at the end of November. These big updates, along with USPS finances, are sure to be hot topics.

direct mail · events · Intelligent Mail · move update · MTAC · prices · USPS