Postal Affairs Update, August 13, 2021

August 13, 2021

Mailer associations filed their response to USPS and PRC opposition to its request for a legal stay on August 29 rate increases — but customers should plan for price changes to take effect. And the Board of Governors approved changes to Service Standards on First Class mail, though there was vocal dissent in an open session.

Quad’s Postal Affairs team remains committed to keeping you up to date and informed. As a significant mailing industry partner, we are in a unique position to provide clear and accurate information regarding the state of the USPS and suggest best practices during this time. Please notify the Quad Postal Affairs team if you become aware of any changes, questions or something new related to how the USPS is conducting business. We will investigate and update all. Send inquiries to the Quad Postal Affairs Distribution list (Postal Affairs – Team) or ask your Quad representative.

Here are key developments since our last update:

Postage rate increase news

Following the official approval of the mid-year price increase by the PRC, several industry associations have requested a stay from the district court. The request included supporting documentation of the imminent harm to mailers that would result from the largest increase since PAEA was enacted in 2006. Both the USPS and the PRC have submitted comments opposing the stay request — and we do anticipate the price changes will still take effect on August 29.

At the same time, Congress is actively working to pass postal reform bills that currently enjoy broad support in both Houses. The legislation would further reduce the USPS’ need to increase postage rates. Right now, all mailers can assist with advancing legislation to curb postage increases. The more Congress hears about troubling aspects of the USPS’s plan, the more likely they are to push hard for changes with the Postmaster General and the Board of Governors. Please consider taking a few minutes to fill out a short form on this page, which will automatically message your Members of Congress. Or you can text MAIL to 52886. The process is a simple, extremely effective and efficient way to let Congress know your thoughts and tell your story about how important an affordable USPS is to you.

Quad is preparing as best we can to mitigate impacts to postal budgets. You can watch our July 28 webinar on demand to hear more about your options for better pricing. There you’ll also find a document that answers all questions we didn’t have time to address during the live event. Contact your sales reps to fully understand how rate changes could affect your marketing campaigns.

Note that the USPS announcement on temporary rate increases for the peak holiday season will not affect your mailings with Quad. This is on competitive products, including parcels, and is in line with what other carriers will implement to close out the year.

Service Standard changes

The USPS Board of Governors officially approved the Postal Service’s proposed change to Service Standards that will slow down delivery of First Class mail. The current standard of delivery within 1-3 days is being extended to 1-5 days — this allows the USPS to truck the mail across the country instead of flying it. They have not yet announced an official implementation date for the change.

At the August 6 BOG open session, we saw clearly that while the service standard change was approved, it was not an unanimous decision. New Governor and former Deputy Postmaster General Ron Stroman voiced his opposition to the Service Standard change, noting that it will hurt those who rely on the mail the most, and provide minimal savings to the USPS. He said the plan is “strategically ill-conceived, creates dangerous risks that are not justified by the relatively low financial return, and doesn’t meet our responsibility as an essential part of America’s critical infrastructure.” Stroman also noted that “rarely, if ever,” has a USPS policy change received such widespread pushback.

Delivery performance

The USPS is moving mail at a fairly good rate this summer. This is a big improvement over July 2020 when the USPS implemented cost-cutting measures that severely impacted delivery. The current performance is still quite delayed over 2019 numbers. We expect to see the current performance continue through August.

The wildfires in the northwest have caused the USPS to have to close some delivery offices for a day or two, reopening as the fire danger passes. When they do this, they either continue to deliver the mail where possible or offer it for pick-up. The impact should be immeasurable for most mailers. We have had some delays in delivering loads to postal facilities in that region, mainly due to train delays through the area.

The I-70 Glenwood Canyon CO closure due to mudslides has not impacted our logistics at this point, but is a concern as it may be closed for weeks.

Freight market update

The industry is still experiencing challenges due to capacity and slower or inconsistent service, especially in the LTL market. Supply chain disruptions remain heavily in effect, mainly through labor shortages and a low inventory supply that all industries are experiencing. Fuel costs remain higher across the board.

Postal volume

Mail volume for week ending July 31, compared to 2020

  • Total Mail: Up 9.7%
  • Packages: Down 18.9%
  • Single Piece: Down 8.2%
  • Presort First Class: Up 4.2%
  • Marketing Mail: Up 14.4%
  • Periodicals: Down 27%

Total Q3 volume:

  • Single Piece: Down 10.2%
  • Presort First Class: Up 5.8%
  • Marketing Mail: Up 38.6%