Postal Affairs Update, January 21, 2021

January 21, 2021

We’ve seen some performance improvements in the first weeks of 2021, though several hubs are still behind as volume remains high. Things might not be stable as soon as hoped given the pandemic’s continued spread. This is a short week with the MLK holiday, and the annual pricing increase goes into effect next week. Meanwhile, the industry continues to send clear messages to USPS leadership that further price increases later this year would hurt the Postal Service and its customers.

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:

Performance delays

Although we see signs of improvement in many USPS locations, others are still struggling badly to get the mail through. There are even a few very isolated instances of mail with December in-home dates still outstanding, presumably sitting somewhere in a postal facility where it can’t be tracked.

The USPS is still handling a very high number of parcels this month with holiday returns, year-end statements, stimulus-related mail and continued higher package volume due to the pandemic. Widespread sick leaves present additional challenges. Improvement might not be linear given all the factors contributing to delays. But we hope to see slight improvement every week for the next several weeks as they continue to recover from the historic volume of December 2020.

Facilities that are still significantly delayed (3-7 days) include: Albany NY, Harrisburg PA, Baltimore MD, Cleveland and Akron OH, Lehigh Valley PA, Detroit MI, Southern ME, Wilmington DE and Philadelphia PA. Others are delayed 1-4 days with at least some mail in-home within the Service Standard window.

The USPS has redirected mail for Baltimore MD to an alternative location from Jan 15 through Jan 20. This is an effort to manage the volume coming into that facility, which might result in further delays in processing and delivery.

Other locations continue to ask drivers to wait several hours or to return the next day to unload due to labor issues at the docks in postal facilities. We are involved in daily calls with the USPS regarding this problem and hope to see improvement soon.

Pricing and funding

The Postal Service’s annual pricing increase takes effect on January 24. The question we all want answers to, though, is whether there will be another increase later in 2021.

The Postal Regulatory Commission recently granted the USPS greater pricing authority. Quad and other industry leaders have clearly communicated that further rate hikes will have a negative impact on the Postal Service and its customers. We urge them to both forego an additional increase this year, and to publicly state as such soon so that our customers can plan accordingly.

Additionally, the mailing industry has stepped up its efforts to fight the PRC rate proposal and have filed a lawsuit in federal court urging a stay of the PRC order. This request is pending before the court and we are watching these developments closely. We’ll provide updates as the court proceedings progress.

We do know that work has begun on drafting the comprehensive postal reform bill that Quad has advocated for. Our Chairman, President & CEO, Joel Quadracci has testified on Capitol Hill in favor of such reform, and we’re pleased to see it taken up by the new Congress. We’re optimistic that a new bill would address the misguided and financially catastrophic mandate that the USPS pre-fund employee retirement benefits. But introduction of that bill is likely still a few weeks away.

As for other income avenues, December’s pandemic stimulus included a $10 billion appropriation for the Postal Service. This isn’t a loan that the USPS has to pay back, and helped offset losses for 2020. The next similar bill likely won’t include anything for the Postal Service — but it will have an overall positive impact on the US economy.

This helps the nation’s biggest postal customers, allowing them to continue marketing through the mail. Especially if there are no further pricing increases in 2021.