Faint Applause for Postal Service Cutbacks

The Postal Service's plan to slow down mail delivery isn't, to put it mildly, wildly popular in many quarters.  Besides being an inconvenience to consumers, slower mail delivered only five days a week is a serious threat to many businesses, particularly magazines and newspapers, already hard-hit by the digital revolution that has eroded USPS' franchise.

Perhaps most threatened are weekly newsmagazines that try to get their magazines into readers' homes in time for the weekend, when they presumably have more time to read them.  

"We know that our readers value getting The Economist and reading it on the weekend," said Paul Rossi, managing director at The Economist,  which gets 55% to 60% of subscriber copies to homes by Saturday. "There's a direct connection between renewing customers and delivery. So it's important to us," Rossi told Advertising Age. 

Time changed its publication schedule a few years ago to try to ensure weekend delivery but there's only so much a magazine can do to move up its deadlines and stay current.  It's pretty hard to write the week in review on Tuesday, after all.

Some magazines won't be waiting around to see what the Postal Service does next. Bloomberg Businessweek has been working on an  alternative delivery system since last year and now uses newspaper carriers to deliver some 200,000 of the magazine's roughly 900,000 subscriptions in larger markets.

Still a monopoly

Of course, there is a big drawback to setting up alternative systems, since the Postal Service, which claims to be entirely self-supporting, nevertheless relies on its status as a federally-protected monopoly to make mailboxes off-limits to anybody but USPS letter carriers.

That means magazines and other privately-delivered items often end up being tossed on lawns and driveways, where they're peed on by dogs, run over by cars, rained on and otherwise mistreated.

While announcing its plans to abandon Saturday delivery and slow down weekday service, the USPS hasn't said anything about opening mailboxes to whatever uses their owners assign them.

Movies by mail

The USPS cutbacks may seem like an odd sort of serendipity to Netflix, the giant video rental chain which delivers movies both by streaming video over the Internet and via mailed DVDs.

Netflix has lost about 9 million of its DVD customers following a 60% price hike last summer and about 75% of its new customers subscribe to the streaming service, so the post office cutbacks won't be an unmiitigated disaster for Netflix. 

Netflix has also located DVD shipping centers near postal processing centers, which means the change will probably only add an extra day at most for a vast majority of subscribers.

Direct marketing

Also fuming is the Direct Marketing Association (DMA) and others who flood mailboxes with catalogs and other advertising and direct marketing material.

In a letter to the Postmaster General, the DMA complains that the Postal Service is seeking a $2.3 billion rate increase that is over and above increases already scheduled to take effect in January. 

"Although USPS has told its customers that it will not raise postage above inflation, it continues to pursue an above inflation postage increase before the Postal Regulatory Commission," said Jerry Cerasale of the DMA. "This action requires mailers to plan for an exigent postage increase which lowers the amount of mail they will send.  

"At a time when mail volume is falling precipitously and USPS cannot shed excess capacity quickly enough, USPS should send no signal through its actions to customers to mail less," Cerasale said.

Consumer sentiment

Consumers aren't exactly taking to the streets to support the USPS, which has seemingly been on the brink for most of the average American's lifetime.

ConsumerAffairs.com performed a computerized sentiment analysis of more than 380,000 comments posted on Twitter, Facebook and other social media and blogs over the last year and found USPS sporting a rather dismal 8% positive net approval rating, up slightly from November, when it was at zero.  

Postal employees, not surprisingly, are perhaps the most hostile to the plan.

"The Postal Service plan will hasten the demise of the USPS,” American Postal Workers Union (APWU) President Cliff Guffey said.

“The USPS should be modernizing and striving to remain relevant in the digital age, not reducing service to the American people,” he said. “Dismantling the Postal Service’s processing and distribution network will devastate mail service, damage the economy, and drive customers away.

“The USPS network is still a vital part of the nation’s infrastructure and destroying it will hurt, not help, the Postal Service.

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