Has First Class Mail’s Plummet Stabilized?

A new report from the Office of the Inspector General (OIG) of the Postal Service poses the theory that  single-piece First Class Mail volume—which plummeted 61% since 1995 to 23 billion pieces—may have found its base level.  What’s more, the investigation into First Class mail trends finds them regionally divergent, with some areas still mailing the same amount of letters that they did 20 years ago.

Thirty-six geographic areas including Grand Rapids, MI, Shreveport, LA, and White Plains, NY, have retained about 86% of the First Class volume they experienced in ’95.  Volume declines ranging on the high end—70% and above—were experienced in 196 areas that included larger metro areas such as Boston, Chicago, and Washington DC.  The largest number of areas, 269 of them, settled into medium levels of decline ranging between 30-60%. 

The OIG’s analysis finds, however, that the rates of decline across the board appear to be leveling out and, in fact, made a slight upturn in the low decline group. The spread between these areas’ volumes,too,  appears to be narrower in 2013 than in 1995. “The rate of decline is slowing or has stopped, even in many of the areas that have lost the most mail volume. This suggests that there may be a new base level of demand for First Class Mail nationwide,” says the report.

Older people and those who are better educated and better paid send more single-piece mail than the average. But those factors play little role in First Class Mail’s fall. No matter the demographic descriptor,  rates of decline are similar across all groups. Between 2003 and 2013, mail pieces sent by Americans 55 and older went from 4.3 to 2.2 billion, for example, and volume of people under 34 went from 2.5 to 1 billion.

The OIG’s investigation also concluded that level of Internet usage showed  no meaningful correlation to a downturn in mail volume. “This does not necessarily mean broadband use is not an important factor in [the]decline,” read the report.  “However, if it is an important factor, it may influence the types of mail being sent, but not their volume. For example, it is possible that increased broadband use across demographic groups drives some portion of [single piece First Class Mail] volume decline overall and increases the volume of parcels.”

The OIG suggests that Postal Service senior managers consider taking a segmented approach in its marketing and operational strategies going forward, noting that strategic planning based on national volume trends could end up neglecting the needs of regions that are either strong or weak users of the mails.

“As there is no single type of postal customer anymore, there must not be a single type of postal policy,”  concludes the OIG. “Policy applied nationwide to some mythical average customer will simply not work anymore.”

Areas with low or no decline in single piece First Class Mail volume

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