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Postal Affairs Update, February 3, 2021

February 3, 2021

The Postmaster General made news at the MTAC public forum last week, which might signal mid-year price increases. USPS delivery performance has improved in the past week, though some facilities remain far behind.

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 reacting to the pandemic. We will investigate and update all. Please 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:

Pricing

Postmaster General Louis DeJoy told Mailing Technical Advisory Council (MTAC) public forum attendees that a decision on using new pricing authority is imminent. Some outlets have misinterpreted this to mean that a price increase is imminent — that could well be, but PMG DeJoy was referring to a decision.

The USPS head did say he’s heard customer concerns, and will balance their needs with Postal Service budgets. Unfortunately, it’s likely they will exercise the new pricing authority as soon as it’s available, in July or August. The question is now, how much will prices increase?

The Postal Regulatory Commission denied our industry’s “stay” request to challenge the new pricing authority it granted the Postal Service. Quad and most other major USPS customers signed onto that stay, though its rejection was expected. The action was a necessary step in the process for possibly more effective legal challenges. The industry already officially filed for a stay and expedited consideration with the DC Circuit Court, and provided justification for the appeal.

While President Biden has designated Michael Kubayanda as the new PRC Chairman, it doesn’t change the make-up of the Commission or its priorities.

We continue to work with USPS customers across the industry to explore further legal options that prevent the Postal Service from potentially making poor mid-year pricing decisions. Quad remains in regular contact with customers for how the situation might affect 2021 budgets.

Delivery performance delays

The USPS has slowly improved throughout January. Mailers expected to see better delivery performance immediately after the New Year — it really took all month to get even close to the turnaround times that Postal Customers typically expect, though.
This past week showed the greatest improvements. But some facilities (Cleveland and Akron OH, Hartford CT, Lehigh Valley and Philadelphia PA and FSS Springfield MA) are still working mail that should have been in-home weeks ago.

Quad continues to see severe delays for letter mail in AADC trays, and any mail on Mixed pallets or in Mixed bundles (mainly DMU/Local mail). We continue to work with the USPS to help them identify areas of concern. The number of USPS employees on sick leave is reportedly decreasing, which should help service performance in the coming weeks.

It is important to note that First Class mail is still severely delayed, averaging only 50-60% in-home by the third day after the mail is entered into the USPS. The exact reasons for these severe delays is not entirely clear, though it’s certainly related to fewer flights and USPS sick leaves.
Postal Service officials told the industry last week that any old mail they find will go to the front of the line, keeping consistent with first-in, first-out prioritization.

EPS Outage

Quad clients should be aware that the USPS will have an Enterprise Payment System (EPS) Trust Deposit Outage from February 12-16, 2021. This means the system will not be able to post trust deposits made to the EPS account during that timeframe.

This outage affects those depositing funds via ACH Credit, Fedwire and Mobile deposit. Quad clients should make deposits prior to those dates. Otherwise, we’ll need a copy of the deposit that includes the EPS account number, deposit date, deposit amount and trace ID.

Postal volume – latest numbers

Week Ending January 23, compared to 2020

  • Total: Down 2.5%
  • Packages: Up 44.7%
  • Single Piece: Down 9.3%
  • Presort First Class: Down 2.9%
  • Marketing Mail: Down 20.4%
  • Periodicals: Up 3.2%