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National Postal Policy Council

NPPC is the trade association for large business users of letter mail, primarily in First Class.  NPPC is committed to ensuring that a postal system to serve business mailers and the public comprehensively, effectively and efficiently be sustained.  With the Postal Service under severe financial stress, NPPC is working with Congress, USPS and the Postal Regulatory Commission, as well as other postal stakeholders, to achieve a solution that will address the
financial challenges.

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First Class Importance

It is a fact that First Class Mail has declined substantially from its heyday of more than half of the Postal Service’s volume and revenues over the past decade-plus.  And it’s a fact that First Class continues to decline in the face of diversion to the internet and mobile.  But with apologies to Samuel Clemens, reports of its death have been greatly exaggerated.

First Class today still nicely exceeds 40% of Postal Service revenues.  It remains in heavy demand from certain demographics, and for certain purposes.  It is capable of exploitation for advertising or promotions.  And it surely provides more safeguards against identity theft than can generally be found in the electronic environment.

So, why is the Postal Service virtually writing First Class off?  Postal executives have publicly pointed out that they expect further dramatic declines over the next decade, to the point that single piece will be a thing largely of the past, and commercial categories will have shrunk considerably. Their strategy is geared to developing the tools to survive in that new world.

While adjusting strategy to respond to changing conditions is admirable and necessary, it should hardly be an all or nothing proposition.  Downward jawboning, combined with beyond inflation rate increases, and imposition of additional preparation requirements, runs a great risk of creating a self-fulfilling prophecy.  Yes, some electronic diversion will continue, irrespective of any of the foregoing three factors. It’s hard to compete on the cost structure upfront, although some are raising questions about overall cost comparisons when overlooked emails, texts and other communications, calls to help centers to iron out digital communications glitches, and more are factored in from the consumer side.

Yet, it is not as if there aren’t ways USPS can realistically attempt to slow First Class decline, and maybe even entice some new volume into the mailstream.  In fact, it has tried, for example, several promotions, and regularly consults with mailers about potential initiatives.  But much more, bringing much more energy and investment, can and should be done.  Spread out or even suspend additional preparation requirements, and their costs to mailers. Speed up and broaden incentive programs.  Promote NSAs.  Intensely market the protection of First Class against identity theft.  Find a place for First Class Lite or other experimental rates.  And even – gasp! – reduce prices (e.g., instead of marking First Class up some 200%, mark it up, say, 150 or 175%) in a bid to recover and even build market share.  There are no doubt many more ways than some or all of these; if one or more don’t work, try something else.

First Class remains important to the postal system.  It ought to be treated with First Class Importance, and not prematurely consigned to the dustbin of history.

 


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