Postal Reform Passes: What It Means for Direct Mail

by | Mar 9, 2022

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Overview

The U.S. Senate passed the most significant postal reform bill in 16 years on March 8. Making changes that promise to put the U.S. Postal Service (USPS) on a better financial footing, the Postal Service Reform Act is expected to be signed into law by President Joe Biden.

Summary

USPS reform has been sorely needed since the last big reform measure was passed way back in 2006. Providing relief to burdensome requirements should help lay the groundwork for other needed changes.

Reporting

From Federal News Network:

[Michigan Senator Gary] Peters, however, said the final version of the bill reflects compromises from all sides, and only includes USPS reforms that have been “overdue for over a decade.”

“This bill is limited to absolutely essential consensus, bipartisan reforms that are necessary to ensure that the Postal Service can survive and can continue delivering for the American people. Everything in this bill has bipartisan agreement,” Peters said.

Our Point of View

Postal reform has been the proverbial can kicked down the road since 2006, when the Postal Accountability and Enhancement Act was passed during a lame-duck Congressional session. It saddled USPS with a mandate to prefund its retiree health costs 75 years in advance. No other federal agency has had a similar requirement.

With the prefunding now gone, what does this overhaul mean for marketers?

Not much. But, let’s see what we’ve got.

1. Prefunding Burden Gone

Members of Congress in both parties (as well as industry stakeholders) have long said that reform had to include ending the prepayment requirement. So, chalk one one up for finally doing the right thing after so many logjams over postal policy.

Congress can continue to do the right thing by confirming the president’s nominees for the two open spots on the USPS Board of Governors, bringing it back up to the full strength needed to help guide the agency.

2. Saving Some Money

Requiring future retirees to enroll in Medicare will save USPS $50 billion over 10 years. The missed prefunding payments have been wiped off the balance sheets, and the benefits will now be pay-as-you-go.

That’s not nothing. Just a few years ago, USPS was actually running an operating profit minus the prefunding requirement. Changing the narrative about the postal service is a positive thing. Let’s make sure marketers know about it when presented with every opportunity to jump into direct mail.

3. Six-Day Delivery Preserved

Six-day-a-week delivery is still required; efforts by USPS management over the years to end Saturday mail delivery has always run into stiff opposition from Congress. But with an emphasis on package delivery and shrinking volumes of First Class and Marketing Mail, this one may have to be revisited and adjusted.

4. New Delivery Time Dashboard

USPS must create an online dashboard showing delivery time data. This isn’t a terrible idea, though keep a grain of salt handy. Last year, USPS relaxed its service standards that extended guaranteed First Class delivery dates from three days to five days. Some of this change was to account for mail being shipped now by trucks instead of planes over long distances. Has it saved money as promised? And because those figures are based only on mail scanned on entry to the system, how reliable are they as an indicator of USPS performance?

5. Non-Postal Services Boosted

Though postal banking hasn’t been revived, USPS can now offer state and local government services at post offices. For underserved consumers (especially in rural communities) as well as solopreneurs, there are opportunities for USPS to be one-stop shopping.

Wrapping it up

The passage of the Postal Service Reform Act of 2022 is an example of when doing something really is better than doing nothing. Let’s pat ourselves on the back for taking a step as an industry to correct one mistake.

But this should be only the beginning of reaching a national consensus on the kind of postal system we want for our country’s future. Let’s build on this victory to tackle more, bigger challenges in the system.

This is also a good time for marketers, especially large mailers, to get more engaged with USPS at the local level. Joining your regional Postal Customer Council (PCC) gives you visibility to postal authorities and keeps you informed of service issues and opportunities in your area. And in this election year, let lawmakers and candidates know what your position is on additional changes to post office operations.

At mailing.com, we’ve had a long-time partnership with USPS. With in-house USPS staff and our track-and-trace solution, you can always be sure that your mail will meet service standards and be delivered as soon as possible to your prospects and customers. Please reach out to us! We’d love to show you how you can put today’s direct mail to work in your next campaign.

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