Outlook 2006: Mailers Face Some Changes To Stay in Step With the USPSBe prepared for more change this year than in any of recent memory.
We will have another rate case, and it will contain structural changes to the rates. It will reflect the needs of standardization as the U.S. Postal Service deploys more and different types of automated processing equipment. It will reflect direction from the Postal Rate Commission to be more cost-based. Finally, it will reflect the postal service's initiative to move more mail out of sacks and onto pallets. We have not seen this much change in the rate structure in more than four years.
A key issue for mailers is address quality and mail list management. As the USPS focuses on undeliverable as addressed mail, and as it depends more on automation to process the mail, the value of a good address increases. This will raise the bar for mailers on maintaining good, correct addresses, especially for catalogers who buy lists to prospect. Expect rule changes on address quality from the postal service this year.
For printers, the key issue is the postal service's deployment of the Automated Package Processing System. This new piece of bundle-sorting equipment is more productive than previous equipment and uses optical character recognition to "read" the address on the top piece of the bundle. As a result, the USPS issued a rule that the address cannot be obscured in any manner by strapping or shrink-wrap.
As the printers don't control the location of the address, they will be challenged to keep it visible at all times. The implications are increased packaging cost and lower productivity.
Opportunity always exists in a changing environment. My advice to mailers and printers: Stay informed and be proactive about rule and rate changes. The changes will be significant enough to create new business opportunities.
"Intelligent Mail" is coming, and it should offer a chance to change the relationship among mailers, printers and the USPS by establishing service standards and improving the entire mail processing system. Intelligent Mail is essentially using one barcode to track all mail: letters, periodicals, catalogs and direct mail pieces.
Today we have only fragmented data from seed programs and some limited reporting from the USPS. The best way to improve a relationship is to have a common language and exchange of data understood by all parties involved.