Postal decline worsens due to delivery flaws

According to the unaudited numbers released by the US Postal Service last week, the agency faces a net loss of $2.67 billion year-to-date.

The agency has seen a 11.9% decrease year-over year for the quarter ending April 2009. Mail volume decreased by approximately 7.6 billion pieces in the same period for a decline of 14.8%.

Problems with mail delivery was one factor identified as a threat to the direct mail industry in a new forecast from Borrell Associates. Advertising revenue from direct mail is expected to plunge 39%, from $49.7 billion in annual spending in 2008 to $29.8 billion, by the end of 2013, the report added.

If the forecast turns out to be right, direct mail would fall from the No. 1 position for ad revenue to No. 4, behind the Internet, broadcast TV and newspapers, it continued. Cutting the frequency of postal mail delivery and increasing postage rates would spell more trouble for direct mail, according to Borrell's report. “Put all those things together and it's a formula for disaster for the USPS and direct mailers,” said Kip Cassino, VP of research at Borrell.