Mailers Council's Robert McLean on the State of U.S. Mail Delivery

In late January, U.S. Postmaster General John Potter played a game of Mother, May I with Congress, asking for the ability to reduce the delivery week from six days to five. “The resounding answer from Congress was, ‘No, you may not have the authority to do this,’” says Bob McLean, executive director of the Mailers Council, in Arlington, Va. And, he emphasizes, Congress has a long track record of supporting six-day delivery.

But with the USPS hemorrhaging money—it lost $2.8 billion in its last fiscal year and anticipates a $5 billion revenue shortfall for the fiscal year that ends Sept. 30—solutions must be found to the continuing conundrum of solvency. Here, McLean weighs in on the current postal rate case, the importance of H.R. 22 to direct marketers and where the USPS should look for cash.

Target Marketing: The average postal rate increase for direct mail marketers under the May 2009 rate case is 3.8 percent. But when delving deeper into the classes and categories used by direct marketers, are there instances of higher rates?
Bob McLean: There's only one that I noticed. I think it's called Standard Parcel—and I may have to hunt to find this number—but it was a lot more than [3.8 percent]. That's the only one, and I don't even know what that rate is for, to be honest with you. Most of them are pretty close to the 3.8 percent average, some a little below and some a little above.

We also got the first indication of what the savings will be from the Intelligent Mail Barcode, and they were as depressingly low as most people expected. It's going to be very hard for some mailers to justify the expense of investing in IMB software, given what it will give them in return.

Some of the benefits of IMB, quite frankly, are not price-related. [They have] to do with some of the information you'll get back [about mail delivery], the speed of delivery and that sort of thing. So there are benefits to IMB other than price, but if you were looking for a big discount for IMB in this rate case, you didn't see it.

The costs [to implement the IMB] are substantial. Some very large mailers are spending a half a million to a million dollars; some more than a million dollars. So the cost invested depends on how many classes of mail are involved and how large a mailing operation you have—but the costs are significant. So I think that a lot of people had taken a wait-and-see attitude, fearing the discounts would be minimal. And, unfortunately, that's what they found.

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