Mailing/Fulfillment - Postal Trends

The House Oversight and Government Reform Committee Wednesday approved a measure that would end door-to-door delivery to 37 million residences and businesses and Saturday mail service to more than 150 million homes and businesses.

Ending door-to-door delivery—which will force millions to get mail at curbside boxes or neighborhood cluster boxes by 2022—would save up to $4.5 billion annually, said Rep. Darrell Issa, R-Calif. Ending Saturday service could save an additional $2 billion a year.

Mail delivery costs the Postal Service about $30 billion annually. Door-to-door delivery costs an average $353 per drop a year, vs. $224 for curbside service and just $160

The U.S. Postal Service is marching towards a more "centralized delivery," where residents pick up their own mail from clusters of mail boxes located in their neighborhood. Local postmasters are sending hundreds of letters to fast-growing communities, warning that cluster boxes will be the way mail will be delivered to new developments.

Delivering mail is the agency's largest fixed cost—$30 billion. Ending such door deliveries would save $4.5 billion a year. That's more than the $3 billion it would have saved from ending Saturday mail service, according to government reports.

Michael Makin, president and CEO of Printing Industries of America, issued the following statement, in response to the U.S. House of Representatives Committee on Oversight and Government Reform’s hearing titled “A Path Forward on Postal Reform.”

In his oral testimony before a a House committee yesterday, Postmaster General Patrick R. Donahoe said that the Postal Service continues to face systemic financial challenges because it has a business model that does not allow it to adapt to changes in the marketplace and it does not have the legal authority to make the fundamental changes that are necessary to achieve long-term financial stability.

The U.S. Postal Service (USPS) needs to cut its operating expenses by more than $20B to return to a balanced situation, but needs Congressional action to achieve half of this, according to executives.

The US Congress failed to reach agreement on postal reforms last year, with the House of Representatives proving the key hurdle to legislation being passed.

The issue of postal reform is set to return to the US House of Representatives tomorrow, as the Oversight and Government Reform Committee examines proposals for legislation to rescue the Postal Service.

House Oversight Committee Chairman Darrell Issa (R-Calif.) is reaching out across the aisle for suggestions on his new discussion draft to revamp the U.S. Postal Service (USPS).

Some Democrats working on postal reform initially cast a skeptical note on Issa’s discussion draft, with the ranking member at Oversight, Rep. Elijah Cummings (D-Md.), saying he had “serious reservations.” But both Cummings and Sen. Tom Carper (D-Del.), the chairman of the Senate Homeland Security panel, also applauded Issa for moving the ball forward on postal reform.

ABM, through its parent organization the Software & Information Industry Association (SIIA), has once again joined the Affordable Mail Alliance to contest the future rate increase proposals. “We are members of the reinvigorated Affordable Mail Alliance, and we are lobbying Congress regarding 'underwater' products and postal reform, and have engaged with USPS senior leadership to explain the impact these increases will have on mailers,” said Mark MacCarthy, vice president, public policy with SIIA. 

Representative Darrell Issa of California and Senator Tom Carper of Delaware, are overseeing efforts in the Senate and the House to come up with bipartisan postal legislation, an effort that failed in the 112th Congress.

Issa made a compromise last week in a draft version of a Postal Service overhaul bill, the Postal Reform Act of 2013. The draft from the House Oversight Committee would greatly reduce a financially crippling annual requirement to prefund health costs for future retirees.

In Issa’s draft bill, there would be an end to Saturday mail delivery while package delivery remains in place on Saturdays.

In order to solicit broad stakeholder input on the Postal Reform Act of 2013 prior to introduction, House Oversight and Government Reform Committee Chairman Darrell Issa is posting a discussion draft of new legislation.

"The release of Chairman Issa's discussion draft on the Postal Reform Act is the first step in a long process to achieve a new law—but it is a very important step," said Lisbeth A. Lyons, vice president, government affairs, Printing Industries of America. "We're pleased to see the draft discussion out now and hope to see actual legislation introduced and considered sooner than later."

The US Court of Appeals for the District of Columbia Circuit dismissed an attempt by USPS to overturn orders from the Postal Regulatory Commission to correct over-large discounts offered for presorted mail.

The regulator had said the discount being offered by USPS was greater than the cost-savings that the presorting activity provided it—thereby breaking US postal law.

Arguing its case, the Postal Service attempted to suggest that its legal restrictions on mail-sorting (workshare) discounts only apply to single-piece First Class Mail, and that presorted First Class Mail is a different product.