UAA Mail Costs USPS $1.5 Billion

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CHICAGO - Handling Undeliverable-As-Addressed mail in fiscal 1998 cost the U.S. Postal Service $1.5 billion, according to results of a cost, volume and characteristic study on UAA mail, which was released at the Fall Postal Forum here this week.


Michael L. Murphy, USPS address management manager, said the cost to the USPS has decreased $100 million since 1995. The study, which was compiled by PriceWaterhouseCoopers, Washington, DC, attributed the largest costs to forwarding mail ($438 million) and returning to sender ($768 million), with the remaining cost going to mail waste, address corrections, change of address processing and other miscellaneous costs.


Murphy cited a percentage decrease in UAA volume since 1995, from 2.84 percent in 1995 to 2.72 percent in 1998, which represents more than 237 million pieces of mail at a rate of 11 percent. This decrease in UAA, as compared to an increase in total mail volume, means that the USPS' address quality programs are working, he said.


He said Move Update helped to reduce total UAA mail. This program, instituted by the USPS in 1997, encouraged mailers to use the USPS' address correction and quality programs - such as FastForward, Address Change Service and The National Change of Address Service - by offering mailers presort and automation discounts when they use the services.


"Without the program, the UAA volume would have probably doubled and the cost would have doubled what we saw in this study," he said.


Murphy said that out of 118 billion addresses in fiscal 1998, NCOA licensees are getting a 4.1 percent match rate.


However, even though Move Update is working, addresses are being corrected and postal costs are decreasing, Murphy warned that costs are still there and will ultimately trickle down to the customer.
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