The buzz surrounding the United States Postal Service is focused on the recent proposed price changes filed with the Postal Regulatory Commission, just one of the many steps being taken to tackle the crisis situation surrounding the USPS. Traditionally, the Postal Service is limited to rate increases of no more than the rate of inflation, which as of May stood at 0.9%. The recently proposed rate increase filed by the USPS was at 5.6%, which further reflects the severity of its economic condition.
Based on the findings of three well-respected outside consulting firms, it has been determined that if no action is taken the USPS will face a cumulative shortfall of $238 billion by 2020. Additionally, the most recent statement provided by the USPS reported a net loss of $2.9 billion for the first eight months of its fiscal year. It was also released that the volume of mail delivered has plummeted from 213 billion pieces in 2007 to 177 billion pieces in 2009.
The extreme drop in mail volume is accredited mostly to the increased use of the Internet as a means of sending and receiving documents. To continue providing a reliable and affordable avenue for business communications, the USPS is considering ways to adjust its business model to fit in today's evolving world. The need for a 21st century postal service is eminent as the fact for all of us is no company operates today as it did 30 years ago.
While we know there is no one single answer or quick fix to the current crisis, the proposed change receiving the most attention is the reduction of mail delivery to five days, eliminating residential delivery on Saturdays. This proposed change is leaving many business owners, to whom the USPS plays a critical role in daily operations, with many unanswered questions.
Business owners make up 90% of USPS business between mailing statements, bills, payments, newsletters and catalogs. To gauge the attitude of businesses towards the change, the Postal Regulatory Commission is currently holding a series of hearings across the nation to discuss the five-day delivery plan and get feedback. They are finding the reactions to be mixed and business owners can't help but wonder what exactly the switch will entail and how best to prepare.
According to its website, the postal service plans to provide businesses with a variety of options to send and receive mail on Saturdays, including the following:
Mail addressed to P.O. boxes will continue to be delivered on Saturday.
Post offices will remain open on Saturdays and will accept outgoing mail-it will just remain unprocessed until Monday.
Express mail will continue to be delivered seven days a week.
Any bulk mail acceptance that now takes place on Saturday and Sunday will continue.
If this happens, it is entirely possible that none of the above options will work for your credit union and the way it operates. If this is the case, you may simply need to adjust the targeted delivery day of your mail to members. You can begin evaluating what financial statements and notices you currently have targeted for Saturday delivery to street addresses and determine which could be delivered on Friday or Monday. You will also need to evaluate what changes you will need to make in your printing and shipping schedules to support that delivery day.
For example, if your company currently targets delivery of your statements or notices on Saturday, you may alter your print and distribution schedule to deliver on Friday instead. This is a practice you could test now, allowing for a smooth transition into the five-day delivery model should and when it happens.
Staying informed as to the status of five-day delivery is critical to helping your credit union prepare. The USPS has developed an operational plan that will provide businesses critical details about how, upon approval, the five-day delivery will be implemented. This information will be available at the organization's website.
If you currently rely on an outsourced service provider to distribute your statements, notices and other mission-critical business communications, remain in constant communication to ensure the company is taking necessary steps to ensure your business will be able to smoothly transition into a five-day delivery schedule when the time comes.
Harry Stephens is
president/CEO of DATAMATX.