Postal Affairs Update, September 30, 2020

September 30, 2020

The USPS again exceeded its revenue plan in August due to increased parcel volume. Last week the Postal Service delivered Quad customers’ mail earlier than we’ve seen recently. But for these and other factors, “better” does not mean a return to peak performance. We look ahead at how these trends are taking shape in the biweekly postal update — and in our free webcast on Thursday, October 1. “Prep for Delivery Performance: How to Make the Most of USPS Changes” reviews what we’ve seen in the four phases of 2020, relative to the pandemic. The team will then forecast what will happen between now and the election, and for the holiday season.

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:

USPS Releases August 2020 Financial Results

Preliminary financial performance results for the month of August 2020 tell us that the Postal Service continues to exceed revenue expectations. It’s overall revenue was up 4.2% over August 2019 and expenses declined 16% versus last year. The net loss was “only” $278 million — last August’s net loss was $1.7 billion.

While this looks like good news, the USPS is still losing hundreds of millions of dollars per month. We renew our call on Congress to act in the Postal Service’s best interest, which is in the best interest of our nation’s economy. For more on what the government has and has not done for the USPS, watch a recording of Quad’s first postal webcast on-demand.

USPS proposes new rule for data files

Per the USPS: “The Postal Service is proposing a database product cycle that aligns with the release of other mailing products. This will provide consistency across all mailing products and the method by which the data files are available and distributed. This proposal would require the use of monthly updates for both carrier route and non-carrier route mailings and would reduce the risk of using data that is no longer current.”

This proposal has generated internal discussion at Quad about what it means for our customers. From the standpoint of best practices, the rule makes sense. It will improve mail quality. But it will likely affect customers that produce and presort mail that doesn’t go out immediately. Quad representatives will work closely with our mail customers to determine the best course of action for each business’s goals.

Quad meets with the PRC and OIG

Quad leaders met with the Postal Regulatory Commission and the Office of Inspector General to discuss our own experience with mail through COVID-19, and how the Postal Service’s handling of the pandemic has affected mail programs for our customers. We’re grateful for the opportunities and look forward to the OIG’s full impartial report on how the USPS has handled the current crisis. They’ll publish findings in early 2021.

Join the Thursday webcast to learn more about what we shared and discussed with these important and influential government bodies.

Postal volume

As always, weekly numbers reflect change from the same period last year, and are not indicative of trends. Note that these numbers don’t reflect the entire week yet. And while periodicals are down significantly, they should be viewed over an entire month — most magazine titles publish monthly.

  • Single Piece: Down 11.5%
  • Presort First Class: Down 4.7%
  • Marketing Mail: Down 4.7%
  • Periodicals: Down 39%

Quad USPS performance data

Our Postal Solutions teams tracked Quad customer mail at about the same rate last week as the week of Labor Day. That’s significantly slower than we’ve seen since mid-August.

The USPS did deliver more pieces in-home earlier, on the first two days after it received mail from Quad. However our data indicates that this was because Quad transported mail to Postal Service facilities faster.

Quad’s Delivery Tracking Senior Manager, Maureen Noe will join the discussion on Thursday’s webcast with detailed information about what her team has seen, and what she anticipates for delivery performance through the end of this year.