Resources

Postal Affairs Update, January 8, 2021

January 8, 2021

The peak postal season is over, but the USPS continues to dig itself out — severe delays remain, especially in the northeastern US. A new year and vaccines bring hope to the country, even as the pandemic continues to hurt major Postal Service customers. And we look ahead to how the USPS might use its new pricing authority later in 2021.

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

Quad tracking shows severely delayed mail based on scans at USPS facilities from the Northeast to Southern Atlantic states, and into the Midwest.

Albany and the Mid-Hudson region of New York have been slowed since the December 16 winter storm. Mail in Cleveland and Akron is beginning to move after nearly four weeks of it appearing to be warehoused at redirection sites. Mail that was redirected to Elmira, N.Y. hasn’t moved to Rochester since it reopened on December 29. Buffalo mail is at a similar standstill.

Additionally, Wilmington, Del. pallets delivered to NDC Philadelphia for in-home dates the week of December 14 still have not moved. And some NDC New Jersey pallets from that same week appear to still be warehoused somewhere.

Other locations are starting to get better, but are still extremely delayed. These sites include Southern Maine, Harrisburg and Lehigh Valley in Pennsylvania, Greensboro, Greenville, Detroit, Cincinnati and Baltimore. In some cases, we are seeing facilities process mail that they received in the last few days — but not mail that they’ve had for more than a full week. Mail out of Wisconsin that sat in Milwaukee for weeks has started to improve.

The USPS response to inquiries has been a blanket statement that they have had unprecedented volume and are being impacted by Covid-19 and to please be patient. Quad communicates daily with USPS managers and executives to better understand their challenges. And we’re committed to ongoing collaboration to find efficiencies and ways to improve performance in the future.

We remain hopeful that USPS customers will see improvement in the coming weeks. We will note that this is contingent upon operations running at full-power, without implementation of budget-tightening measures like eliminating overtime.

Pricing

The USPS filed its Annual Compliance Report with the Postal Regulatory Commission, which included its calculations of supplemental rate authority based on Density and Retirement Liabilities. According to the USPS calculations based on FY 2020 results, the Postal Service has gained 4.5% density authority and 1.062% retirement authority. Those calculations are similar to what others in the industry had calculated. This could possibly show intent to use its new authority as soon as it is available to the Postal Service. The filing is still subject to review by the Postal Regulatory Commission, which will issue a determination, likely in late March.

Additionally, several Industry Associations have filed a “stay” requesting that the Postal Regulatory Commission hold the implementation of its final order in the 10-year review docket. Quad is a member of these associations — we support the stay, as we’re committed to assuring fair pricing for our customers.

The goal of the stay is to provide additional time to design an overall legal strategy to block the implementation of the PRC’s latest rate proposal. Additionally, the stay will give Congress the time it needs to take action on reform legislation that will reduce the overall U.S. Postal Service costs.

Such legislation is being developed, and we are hopeful that committee leadership will introduce it early in the upcoming legislative session. This legislation must address the growing costs of the USPS and put it on a path to overall sustainability. This would in turn support additional volume from the mailing industry.

There are common sense reforms that the USPS supports, along with the employee unions and the mailing industry. It is well past time for Congress to act to protect the 7 million jobs throughout the United States that depend on the USPS.

Quad is actively working with our champions to advocate for these reforms with the new Congress and will continue to do so until the reforms are signed into law.

Mail for week of Dec 26, compared to previous year:

  • Total: Down 2.8%
  • Packages: Up 61.5%
  • Single Piece: Not available
  • Presort First Class: Down 2.3%
  • Marketing Mail: Down 19.9%
  • Periodicals: Down 19.3%