5 Biggest Mailing Trends – From an Industry Insider

Most of the news you read about the USPS is typically dire and paint a terrible picture for the future.  In reality, I am not sure this is true.  Of course, volumes are changing and certain areas are hit harder than others.  But this is a slow progression that is adapting to our changing mailing habits.  The goal in this article is to step back and look at what is really happening, so you can see how these changes will impact your organization.

1.  USPS Volumes Continue to Decline – but at a slower pace – As you can see by the chart below, mail volumes especially around First Class Mail, are continually dropping.  This makes sense as we all move to electronic billing and payments or emailing vs. sending through the mail.  I expect that this trend will continue and the decreases will stay in the same range of -3 to – 7%.  The good news is it will be a slow decline and First Class Mail, the top revenue source for the USPS, is not going away any time soon.

Standard Mail, after a huge decline during the recession in 2007 and 2008, has leveled off and it is predicted that volumes will hold steady.  There have been huge efforts by mailers to combine print and digital together.  Promotional mail still holds a strong return on investment as we are all inundated with digital ads.

USPS Mail Volumes by Class 14 2. Packages will continue to be a growth driver for the USPS – If you have sat through any postal presentations, it becomes clear right away that their main focus is growing their package business.  It seems to be working and as you can see from the chart above, their volumes are growing.

This is an important trend for customers to pay attention to for the following reasons:

  • Priority Mail rates may be less money – Regardless of your carrier discount – packages weighing less than five pounds  may cost less with the USPS than the private carriers.  This is because they do not charge residential surcharges, fuel surcharges or Saturday delivery fees.
  • USPS Tracking has improved – They are now doing up to 11 scans per package to give you more information online and they are also offering free insurance.  Also, the USPS is providing day specific delivery for Priority Mail.  It is not guaranteed, but can help mailers plan.
  • FedEx announced they will start charging dimensional rates next year for every item which means based on size, some packages may be less through the USPS.
  • There are free to inexpensive tools to process USPS packages that can make it easy.  USPS.com and Postageanywhere.com offer free ways to process USPS packages.  Endicia.com, Stamps.com and PBSmartPostage (Pitney Bowes) all have enhanced PC Postage systems starting at around $10.00 per month.

3.  We are seeing dramatic shifts in the way we process mail in our offices – In 2008 there were 1.5 million postage meters used throughout the US.  By 2013 this had gone down to 1.2 million and I predict that this will continue to decline at 4-6% per year.  Here are the main changes and drivers that are causing this change.

  • Companies have gotten smarter on how they process their larger mailings to send electronically, or move mail to production facilities (Inside or outside) that can better handle these volumes.  We see this in the chart below that the largest “Commercial” meters (characterized as machines that can process over 150 letters per minute or more) are having the steepest declines.  This population of equipment has gotten cut in half over the last six years.  Many of these machines moved to slower mid-level machines that meet their new lower volume needs.
  • Entities are realizing that they have more equipment than they need and are downsizing to smaller levels.  We manage over 30,000 pieces of mailing equipment for some of the largest companies in the US.  We are averaging over 60% savings and the majority is from rightsizing equipment and getting rid of unused meters.
  • There is a switch to PC Postage whose volumes have increased by 350,000 users over this same time period.

Postage Technology Changes 14


4.  Death of the Digital Mailbox as we know it – There was a huge emphasis over the past 5 years on the Digital Mailbox and how it was going to change the way we send and receive communications.  This platform would allow us all to have a single inbox where we could receive our bills and statements electronically.  We could also choose which companies we wanted to get solicitations from and schedule payments. The senders would benefit by eliminating some of the physical piece costs (Stock, Printing and Postage) and would be able to learn more about customers viewing habits.  The big players in this space seem to be deemphasizing the service or getting out of the space completely.

Here are the reasons I believe this was not a success:

  • The USPS did not get behind it – In some smaller posts throughout the world they sponsored this service as a complementary offering.  This allowed a single platform to reach the scale of mailers and customers needed to make it viable.
  • Some people like physical mail – Many people still getting bills through the mail have done this on purpose.  They like getting the item to look at and store in their files.  Their vendors have been asking them for years to switch and they continue to hold out.  This type of platform was not going to change that.
  • Many already get mail electronically – Many people already get their bills and communications electronically and have all of their vendors set up to pay through their bank.  This crowd was not looking for a different solution.  The people waiting in line for the next iPhone have probably switched to electronic communications years ago and may not see the value in this platform.
  • Chicken and the Egg – In order to make this work, you need most of the vendors we all use on the platform so the customer could see the majority of their bills.  In order to get vendors to sign up for the platform, they needed to see huge numbers of users.  It is difficult to get both at the same time.

There are two potential bright spots for this technology that are being capitalized on now and you will see more in the future.

  • Using this digitizing capability to move mail streams to production providers.  With this technology, you can simply transform print streams into electronic communications.  This allows mail to move to where it can be produced at the lowest costs.
  • Scanning incoming mail to manage content electronically inside organizations.

5.  Continual USPS Changes – As mail volumes continue to decline, the USPS is forced to make cost cutting and efficiency practices that will allow them to sustain service for the future.  The hardest part for the consumer is keeping up with all of these changes.

Here are some important USPS changes for you to know:

  • Intelligent Mail Barcode – This was supposed to be a mandate by the beginning of 2014, but many mailers were not ready and the USPS withdrew this requirement. We do not have firm dates at this time, but feel confident they will implement this rule.  There are clear benefits with having these barcodes (mail tracking, discounts, and electronic address changes) on your mail pieces and it is strongly recommended that you migrate when possible.
  • Intelligent Mail Package Barcodes – These are being mandated by January 2015 and postage meter users will have to change the way they are processing Priority and Express Mail if they want to keep their Commercial (Discounted) rates.
  • Postal Facility Optimization – Between 2012 and 2013 the USPS consolidated 141 mail processing facilities.  They just announced that they are consolidating another 82 sites.  This may change the drop off locations, speed and movement of your mail.
  • Mail is slowing down – The USPS has set new delivery standards that impact the amount of First Class Mail that will get next day delivery, where the majority will be at their 2-3 day standards.  This is based on drop off times, distance travelled and how mail is prepared.
  • Who knows about Saturday – This seems to have come on and off the table so many times that it is hard to keep track of.  The good news is everyone is in agreement that it would not impact packages.

The only thing that we can count on in life is change.  As to the what, where and how we mail continues to migrate, the USPS and industry providers do their best to adapt.  The good news is mail is not going away and it is just morphing into different areas to remain relevant and cost effective.


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