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USPS 2016 Optimism Forecast

Take an upbeat look at what the United States Postal Service (USPS) has accomplished over the last two years. This article will encourage business owners and customers on how their USPS is working hard to find proactive solutions to keep our economy strong and viable!

The last few years journalists and industry analysts have been very critical of the USPS. When reporting mostly focuses on the negative, its easy to overlook the positives that’s turning our strategic national infrastructure around and within a very short time period.

Improved USPS Financials

On the heels of operating losses for several years, here are some numbers you should consider:

  • Two solid Fiscal Years (FY) 2014 and FY 2015
  • Controllable operating income
    • 1.357 billion in FY 2014
    • $1.188 billion in FY 2015.
    • November 2015, the Postal Service Fund held $7.588 billion in government securities
    • FY 2016 for October and November:
      • $800 million operating income.
      • Operating revenue up 2.1 percent
      • Operating expenses rose 1.4 percent
  • Positive forecasts of the operating net income will continue in FY 2016

Package shipping

The USPS is experiencing the highest volume increases from online shopping trends.

“So far, USPS is on track to scale a new high in holiday deliveries, as its volume is up more than 15% compared with a year ago and is forecast to reach more than 600 million packages between Black Friday and New Year’s Eve. Based on that number, the agency’s market share of holiday deliveries this year will increase to 40% from last year’s 35%, as it continues to push its way into an e-commerce market long dominated by United Parcel Service Inc. and FedEx Corp.”

The Wall Street Journal

The USPS is proving all the naysayers wrong with these supporting numbers.

Mail volume

The combination of a FY 2015 stabilized mail volume of about 150 billion pieces and the realized increases in commercial First Class Mail, allows USPS management to move forward with their planned procedural adjustments and take an entrepreneurial approach to growth opportunities in both mail and packages.

Improved Delivery

We all felt the impact of the January 2015 consolidation of mail processing with increased delivery times. What many may not realize is how quickly postal management was able to react and address the issues and help bring most types of mail back to normal.

General Rate Reduction

This Spring the USPS 4.3% “exigent” surcharge will end. The Postal Regulatory Commission (PRC) removal of the temporary surcharge should lead to a growth spurt for both the USPS and the retail community.

Clearly, the USPS knows that price reductions can and do spur growth, as it has signed numerous Negotiated Service Agreements (NSAs) in recent years with a variety of businesses. Most NSAs trade lower pricing for increased volume. The NSA model allows product, literature and catalog fulfillment centers to provide cost cutting measures to business owners which in-turn decreases the overall shipping costs passed on to their customers.

Today most mail is generated by businesses and organizations that factor postage costs and measure ROI in mail. The rate reduction should boost volume. Mailers are being urged by the USPS Acting Chief Marketing and Sales Officer Jim Cochrane to use the price cut as a opportunity to mail more. All profit and nonprofit organizations should take a close look into this unique product, literature, catalog marketing fulfillment cost cutting opportunity.

Literature & Catalog Fulfillment on the Rise

Tablets and phones have changed the retail landscape. Over the last two years many retailer started to eliminate traditional direct mail marketing tools to include post cards, flyers, coupon packs and catalogs. This faulty business trend is quickly reversing itself and retailers are again seeing increased revenue by implementing combination mail & email campaigns.

Here at TheMAILGroup, we closely and carefully track these trends and our clients have reported declines in order fulfillment after they cut back on direct mail marketing.

“… only 45 percent of seniors have Internet service. Furthermore, Market Scan found that the figure for available emails is around 20 percent of postal addresses, meaning that by avoiding direct mail you could be missing 80 percent of your target market. And people who do use email regularly have become savvier at blocking out sales messages with advanced filters. If in the event, email messages are actually read, they are quickly forgotten or buried by new messages. People also abandon email accounts and create new ones about once a year, so even solid leads expire quickly.”

Barbra Morris of the Huffingtonpost “Back to the Basics: Why Direct Mail Is Not Dead

TheMAILGroup marketing consultants have helped clients retool their marketing strategies with specialized campaigns combining the effectiveness of digital with hard-copy and yielding some amazing results.

The numerous industry success stories and studies all have the common theme of  print-on-paper is here to stay. Print-on-paper in many ways still performs better than digital marketing.

“Physical ads, though slower to get one’s attention at first exposure, leave a longer lasting impact for easy recall when making a purchase decision. Most importantly, physical ads triggered activity in the area of the brain (ventral striatum) that is responsible for value and desirability for featured products, which can signal a greater intent to purchase.”

USPS Inspector General Digital & Print Advertising Comparative Analysis

Consider these facts when you evaluate how you will blend print and electronic marketing for FY 2016 and beyond…

And as we have for over 30 year, we are happy to brainstorm marketing approaches for your company. Call us here at TheMAILGroup: (888) 624 5590.