Postal Affairs Update, October 30, 2020

October 30, 2020

One week ahead of an election with more absentee ballots than ever, we look at how things are shaping up for the holiday season. Mail is moving well overall, despite a surge in political mail and COVID-19. We do see areas of concern, though. And three weeks after the USPS released proposed 2021 pricing, we have a sense of effects and options for mailers.

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 the developments since our last update:

Proposed 2021 pricing

Jeff Henke and Bob Schimek sat down with USPS VP of Pricing & Costing Sharon Owens for an hourlong conversation after the Postal Service announced 2021 pricing. Sharon was generous with her time, transparent and open about the thought they put into changes. Read the recap with key takeaways here.

Seamless Acceptance incentive

The Postal Service’s new Seamless Acceptance incentive isn’t a workshare price discount. Instead, it offsets some of the costs that Mail Service Providers (MSPs) take on to support program requirements.

Seamless Acceptance improves USPS operations by putting more work onto MSPs like Quad (39 C.F.R. § 3030.523(a)(3)). We have to make changes across our enterprise to comply with enrollment in the Seamless Acceptance program and maintain our MSP status.

  • Quad has invested significant resources through 2020 to move all letter mail facilities onto Seamless Acceptance
  • We’ll complete migration of all flats facilities onto Seamless Acceptance in 2021

Our customers benefit because Quad has more control over timing, when mail leaves our facilities — we don’t have to wait for on-site USPS clerks to accept mailings. This comes at no additional cost to our customers.

How Seamless Acceptance improves Postal Service operations:

  • The acceptance process for eligible Seamless Acceptance mailings switches from USPS clerks manually sampling and verifying mailings to a purely automated process.
  • Seamless Acceptance uses electronic documentation (eDoc) and the Intelligent Mail® barcodes (IMbs) on all containers, handling units and mail pieces required under full-service, to reconcile eDocs with barcode scans recorded on mail processing equipment and via handheld scanners
  • Mail piece scans collected from mail processing equipment (MPE) and samples from hand-held scanning devices are also reconciled to the mailer eDoc to confirm proper mail preparation for discounts claimed and confirm correct postage payment

MSPs like Quad assume permanent additional costs and responsibilities, including:

  • Aligning development of internal systems with Seamless Acceptance requirements
  • Establishing new processes and procedures for releasing mail
  • Ongoing integration with USPS updates
  • Creating, updating and submitting eDoc, while maintaining uniqueness across all containers, handling units and mail pieces
  • Finalizing and releasing of mail
  • Daily monitoring of the scorecard and quality control processes to prevent costly assessments if thresholds are exceeded
    • Receiving Mail Quality Data from the USPS on a daily and monthly basis for monitoring and investigation
    • Investigating and or analyzing seamless errors including undocumented pieces, delivery point piece errors, piece weight errors, postage errors and mail piece characteristic errors to determine root cause
    • Correcting and or appealing scorecard issues

Delivery performance

USPS processing is doing well overall, even with a sharp increase in Marketing Mail. October is slower than this same time last year, but not cause for alarm.

Some numbers are of concern, though. The list of facilities that have fallen short of the in-home service standard is much larger than we’ve seen recently. It’s common for FSS facilities to slow down this time of year. But several SCFs have been delayed 2-3 consecutive weeks, which is not typical.

We’ve also seen a steep drop for First Class mail in-home by Day 3. The Postal Service’s goal for FC is 93% — last week our tracking put it at 61%, compared to 83% this week in 2019. It’s been down during the pandemic due to fewer flights that carry this category of mail. But nothing close to this. The volume of political mail from candidates might be responsible — separate from ballots, which don’t drive enough volume to have an impact. We’re concerned and will continue to monitor closely.

Mail Volume

  • Numbers reflect change relative to the same period last year:
  • Total: Up 7%
  • Packages: Up 36%
  • Single Piece: Up 2.3%
  • Presort First Class: Up 61% — note that there was an error in data reporting from a major provider this week last year
  • Marketing Mail: Up 21.5% — this jump is due to political mail, with 1.4 billion pieces entering the system from October 1-19
  • Periodicals: Down 5%