Culture, direct mail, Government, Marketing, Media, USPS

Somehow, The Mail Still Goes Through

Since we last looked, in August, the USPS has broken through another quarter, and published its latest report on Revenues, Pieces and Weights. For you marketers and mailers, here are some stats, and following that, another look at the USPS’s ironic, weird situation.

The good news: direct mail was up by 337,627,000 pieces, a 1.8% increase over Q4 a year ago.  The surge was due to the mid-term election mail, and if you are counting, in the last three months it delivered one additional piece of mail to every addressable soul living in the country.

The Princess Diamond..lost?

The bad news: full year direct mail was down 1.4%, or missing by 1,066,486,000 pieces.  In fact, the shortfall totaled 115,925 tons of mail.  That’s the equivalent of losing the Princess Cruise Lines’ Diamond, which by the way carries 2,760 passengers.  Imagine if it had gone missing.

The bright spot on the USPS horizon however is the growth of parcel delivery.  Package service mail and parcel delivery revenues are up 12% for the year, a happy indication of the robust growth of online ordering.

“Just leave it in between the doors.”

But just when you are feeling that the USPS has a rosy future in parcel delivery, be warned that companies like Amazon, Walmart and Target, the post office’s largest three customers, are now researching ways to do their own “last mile” deliveries.  Watch out, a robot may drop through your roof sometime soon.

Indeed, the parcel delivery business has its own costs, not the least of which are fuel, trucks, planes and drivers.  Did you know that there is a shortage of truck drivers?  USPS transportation costs in the past year were up 8.6% , or by $623,000,000.

Overall, the USPS reported nearly $71 billion in revenues from operations, placing it just behind Target (#39 on the Fortune 500 with $71.8B) as a business enterprise.  As the media enthusiastically reports, the post office missed its bottom line by nearly $4 billion, half of which is owing to pensions and health benefits accruals.

Which is a major source of consternation at the USPS.  Indeed much of the company’s 10K discusses the burdens of pre-funding according to federal government department rules, much different than the private sector.  As a result, it takes the expense on the books, keeps the cash, and adds it to its liabilities.  To date, the USPS must pre-fund $67 billion to employees’ and retirees’ health and pension benefit funds.

For your information, there are 497,000 career employees and 600,000 retirees to provide for. The USPS is the #3 employer in the United States, right behind Amazon, USPS #1 customer, which had 589,000 on the payroll.  The country’s top employer: Walmart, #2 USPS customer, with 2,300,000.

The bigger irony of the USPS is that it is a business, run by business people, but by government rules.  By law, it cannot make changes in products, pricing or service without federal approval.  Its wages, health and pension obligations are modeled on federal department standards.   And isn’t it rich then, that its Board of Governors is subject to Senate approval, and has been short four governors since 2014, the last time the Senate voted to approve them.  It cannot raise a quorum.

In return for federal oversight, it is granted monopoly rights to make door-to-door delivery of mail.  Only recently has its parcel service entered the competitive arena, where it is growing nicely.

Remarkably, despite the USPS financial shortfall of $4 billion, it receives no tax dollars.  Compare that to 18 Federal departments which are entirely tax-funded.  In terms of tax-funded budget, the USPS’s closest federal cousin would be the EPA with a budget of $5.7 billion….nowhere near the Departments of Education $68B, Energy $28B, Homeland Security $44B or Health & Human Services $65B.

Compared to these budgeted costs, it is distressing to see the public criticism the post office endures.    Fortunately, the White House has taken initiative to turn the situation around.

Still, the business continues to grow and manage.  Last year it added 1.2 million new addresses to its rounds, and processed 37 million address changes. It delivered, and picked up 148 billion pieces of mail, six days a week. All in, it drives and walks by 157 million addresses every day.

At a supposed cost of $4 billion, that’s not bad!

 

PS. Another sign of change in our mailing practices, is the diminishing size of the package.  The “missing” 1,066,486,000 pieces of direct mail had an average weight of 3.47 ounces.  By comparison, what did get mailed, in 2018 and 2017, only weighed 1.52 and 1.55 ounces respectively.  Could the loss all be catalog mail?

Advertisements
Standard
Culture, direct mail, Economics, Government, Marketing, USPS

USPS: Hidden Good Fortunes

Every quarter the USPS publishes their Revenues, Pieces and Weights Report. For the numerical savants out there, this is a feast of numbers beyond one sitting, for sure.

But the big story is, the USPS continues to perform in a stellar fashion, despite the ravaging onset of online displacement of hard copy as we know it.

If you think the post office is in trouble? Have another think.

Q3 YTD Results–9 Months Only
~The bad news– and what is publicly perceived, First Class revenues have fallen from $22.7 billion in 2013 to $19.9 in 2018. (off $2.7B or -12%).

~In the same 5 years, Magazines and Periodicals dropped from $1.3 billion to $984 million. (off $276M or -22%)

These two categories accounted for a $3 billion shortfall in revenue.

~Direct Mail, which includes catalogs, has ceded $294 million over the past 5 years. (off -2%) to $12.5 billion in the first three quarters of fiscal 2018.

Now for the good news.

In 2018, competitive Parcel and Package delivery has grown from $9.8 billion in 2013 to $16.9 billion. That’s a $7.1 billion growth, or 73%!

So we can certainly see how internet and digital media have blasted the legacy paper and ink communications business to smithereens.

What we did not see however was that online commerce has grown so rapidly that the USPS has found its newest niche: order delivery.

Year to date, 9 months, FY 2018, the USPS has delivered 4.2 billion pieces. Compare that to 2.3 billion, 5 years ago.

The USPS has another interesting report available, entitled Public Cost and Revenue Analysis, Fiscal Year 2017.

I like this report because it tells you how well it covers its costs of operation.  For instance, First Class Mail has a cost coverage of 210%.  Basically, its revenues are double its costs.

Direct Mail cost coverage is 153%.  Magazines and Periodicals, only 69%.  But the Package and Parcel delivery business, in the competitive markets, cost coverage is 155%.

Overall revenues for 9 months are $53.8 billion, up 5% from $51.2B 5 years ago.

These numbers indicate the ebb and flow of the door-to-door, pick-up-and-delivery business, and how the USPS is responding to America’s choices in communications.  True, the numbers do not account for front office costs, and legacy benefit and pension challenges, where there is a different story to tell.

But for making their daily appointed rounds, no one does it better than the USPS.

 

Thanks for reading!  If you would like to see these reports for yourself, have at it!

Click here: Fiscal year 2018 Q3 Revenues Pieces and Weights

and here: Public Cost and Revenue Analysis 2017

Standard
Environment, Government

How High’s The Water?

“May the rains fall gently upon your fields” ~ Irish Blessing

We get rain; the DesPlaines gets big.

On a day like today, we are all content to stare out the window as indeed the rain does fall gently on our gardens. It has for two days now. The weather folks are enthusiastically dissecting their multi-colored maps showing this vast swath of water that circles the midwest, soaking us through the longest day of the year, and then some.

Waukegan will get close to 3 inches.

Closer to home, we can watch the steady building of Mellody Farms, at the intersection of Milwaukee and Townline Road in Vernon Hills. Traffic snarls along the roads, under the swinging makeshift signals. Meanwhile, trucks and trade vehicles pull in and out of the construction zone.

You can watch the construction cam: I have its URL down below.

Over 100 tankers for every inch of rain.

What is not first apparent, but might be some day, is the amount of water entering the site. Imagine over 100, 18-wheel tanker trucks coming into the site, and exiting too. You can only imagine it, because there are no tanker trucks. But that is how much water is being dumped on this site for every inch of rain that drops today.

Around 980,000 gallons of rainwater fall onto the 36 buildable acres in Mellody Farms for every inch of rain. You can do the math.

Once the rain falls onto the impervious surface of this new shopping center, it has to leave, and it does, coaxed into storm drains that take the volume down, or rather, just over to, the DesPlaines River.

From there, the rainwater disperses, much to the belated concern of folks along the river in Mettawa, Lincolnshire, and ultimately Wheeling. There may be some buildings, like Hollister, just north of Mellody Farms too who will be checking their basements.

And now be mindful, “May the river rise up to meet you.”

Thanks for reading!  I hope you will share this with anyone who ever wonders about the impact of development on our watersheds!

Click here for The Mellody Farms Construction Cam

 

Standard
Culture, direct mail, Environment, Government, Marketing

Don’t Leave The Lights On

Got a light?

Just a few days ago we received a handy tool from ComEd, our power supplier. We have a light bulb guide.

ComEd’s 3 steps to lighting your home.

What seems like 10 years back, somebody governmental decided unilaterally that we should do away with those high-energy-consuming incandescent bulbs which we have been using since Edison. No longer would we squint in the warm glow of a 60-watt bulb while reading the newspaper.

This was because someone, probably in Shanghai Xiangshan, thought we were better off screwing mini-helical fluorescent bulbs into our light sockets. Touted as energy-saving devices, the ‘cool light’ replacements would use less electricity, and last 5 times longer. Incandescents all but left the market, unless you looked in an old variety store off a back road.

So we were prodded into changing out all the old bulbs.

The bright idea: mercury infused fluorescence!

Once all the houses in America were transitioned over to the helix models, then the mercury sleuths woke up, and said we could not dispose of the bulbs. Because after all, they do burn out eventually, and to my disappointment, faster than claimed. But who’s going to China to file a complaint?

Terrific!

So now the incandescents have returned, like swallows to Capistrano.

From watts to lumens. At the speed of light.

But at the same time, another Edison protege has risen, to suggest disposing again of all incandescents in favor of LED bulbs.  The light-emitting-diode bulbs are very efficient indeed.  Not only do they use less power, but they are also blindingly brilliant.

ComEd has taken the initiative in nudging the switch along by mailing us a helpful little card.  On one side, it converts incandescent strengths to LED, which is like shrinking a bagel to a Cheerio.

It goes from watts… remember him? ..to lumens, which is like from energy consumed to instead, brightness delivered.

A Canadian bookmark for the 1970s, still in use today.

But before I go any further, I just want you to consider a similar transition from ancient Canadian history.  Back in 1973 the federal government, of course, decided to change from Imperial measure…remember the Queen?… to metric.   This was purportedly to rationalize and expand Canadian exports to the non-U.S. metric world of commerce.

I think the real reason was to hoodwink the car-owning public.  We shifted gas prices from 45 cents a gallon to 15 cents a liter overnight– without a shred of understanding.  To further bamboozle the public, the government then commanded that car fuel efficiency should shift from mpg, miles per gallon to… kilometers per liter?….no wait for it,  liters per 100 kilometers!

What the heck is that?

Lenticular: lighting your home, as Kelvin would like it.

Not un-coincidentally, while this huge shell game was in process, the Feds decided to start a government-owned company called Petrocan to sell us gas for our cars!  They bought up all the Sunoco stations, changed the signs, and raised the prices like great Caesar’s ghost.  We didn’t have a clue.

So back to ComEd, which so far is not a government entity.

Lord Kelvin

The other side of the ComEd lightbulb card is a lenticular lens which shows you what your home will look like using LED lighting.  It’s pretty clever, and a great device for direct mailers to use.  When you wiggle the card, it changes the brightness of the living room pictured on the card.

You have three exposures: DAYLIGHT, SOFT LIGHT and BRIGHT WHITE.  Below each setting a number tells you what the bulb’s color temperature is, in…Kelvin?…remember him?

Of course you do.  Water freezes at 32′ Fahrenheit, or 0′ Celsius, or 273Kelvin.

Anyway, we now have a card to buy the right bulbs, defined by lumens and Kelvins.

The only remaining question, how many civil servants does it take to change a light bulb?

 

Thanks for reading!  Please illuminate your friends by sharing!

Standard
direct mail, Government, Marketing, Media, Thank You, USPS

Their Appointed Rounds

The United States Postal Service closed out their fiscal year September 30.  Never mind that the rest of the world goes by the annual calendar; the USPS wanted to beat the Christmas rush.

All in, the giant continues to perform well, within the confines of its quasi-government walls.  I wish the rest of the Federal government departments spent as much time looking after their own performance and expenses as does the USPS.

But from the latest Revenues Pieces And Weights report, here are a few glimmers of surprise and excitement.

  1.  It is a $69.6 billion dollar enterprise.  In the Fortune 500 list, it hovers around #37, bigger than Target, and smaller than Procter & Gamble, both good neighbors.  Like both of these companies, the USPS is an indicator of the USA’s pulse rate, though we will admit that it has slipped a bit.
  2. In 2017, the USPS revenues fell $1.8 billion.  We know why.  The Web, social media, email have all disenfranchised much of the USPS core business: first class mail and standard mail.
  3. First class mail continues to fall, $1.9 billion.  Compared to last year, it delivered 2.5 billion fewer pieces of mail, a drop of 4.1%.  Why? Because we receive our invoices, checks and statements electronically.  We pay electronically too.
  4. Standard Mail, now called Marketing Mail, dropped 2.6 billion pieces, about 3.2%.  Why?  Last year was a mail-infused election year.  It was distinguished by huge volumes of mail, from you know who, despite his predilection for Twitter.
  5. Overall, in its market dominant categories, that is, where it holds monopoly rights, revenues fell just over $4.0 billion.
  6. In the open competitive markets, ie., parcels and packages, revenues were UP over $2.2 billion, a 12.5% increase.  Wow! Who knew?

The Web Taketh, And It Giveth

Here’s what I find impressive about the USPS.  Despite the constant nagging of the digital futurists who want to write the Obit for the post office, it continues to hold its own.  In an environment where Internet media are running rampant, the USPS has found a broad new niche: parcel delivery, a $20 billion business.  If anyone should be worried, it will be the brick and mortar retail stores. Ask Sears.  Ask Toys R Us.  Ask Amazon.

American consumers have taken to the Web in all respects, but at day’s end, they need physical product delivery, and the USPS has risen to serving that need.  After all, they were coming by our house anyway.  Their two main competitors are UPS and Fedex, the latter using the postal carrier to make the “last mile” delivery.

Neither Rain, Nor Snow, Nor Gloom of Night…

Postal carriers are the only American entity which visit 157,000,000 addresses every day.  They delivered, all in, 149 billion items in 2017.  They lifted 24 billion pounds, or 12 million tons, of physical product: mail, checks, magazines, parcels and yes, live bees and plants. The USPS has over 500,000 career employees and another 140,000 part-timers.  While this may seem like a wildly aggressive employer, I put it to you that the postal employee actually delivers, a claim many can’t make for other government institutions.

So hats off to the USPS.  It continues to fight the currents, and with astonishingly little help from its political friends, it far surpasses its governmental cousins.

Thanks for reading! If you would like to take a look at the USPS 10-K for 2017, click here!

Standard
Culture, Government, Politics

How Do You Like Your Eggs?

We don’t, as a social strategy, plan ahead to get involved in every thing that is beyond our comfort zone. We just want to live our lives. In local politics, that can be hazardous.

Once, a young couple were the parents of an infant boy, who from his first appearance in the world, never uttered a sound. Not a peep.  They worried over his silence as he grew into a young scamp. He had friends at school and played with the others, but without a murmur from his lips.

A long progression of doctor visits in those early years were fruitless. Specialists shook their heads, and told his despondent parents, “We don’t know what ails him, we are sorry.”

One morning, as his mother stood beside him at the kitchen table, he picked up his knife, and cracked his customary 5-minute egg. The yoke splashed out of its shell and onto the plate.

All at once, he exploded, “What the…?? What is this??”

Shaking his dripping fingers at the plate, staring at his mother, he spat out, “I can’t eat this! Look at the yoke! It’s all runny and gooey. The egg’s cold, and the toast is all soggy…yikes.. this is..this is… yucky, Mom!!”

His mother, at first shocked, stepped back, and then hugging her son, she beamed and looked up to the ceiling, and cried, “It’s a miracle! You can speak! Thank merciful heavens!”

Then she looked tearfully at her boy, and sobbed, “It’s wonderful! I am so overjoyed with happiness! What happened to you??”

The kid looks up, shrugs and says, “Well, up until now everything’s been okay.”

This may be a hyperbolic analogy of our times, but it certainly illustrates our typical lifestyle: as long as everything’s okay, leave it alone.

The continued public dialogue over the troubling, denuded 40-acre parcel of land that sits within our view is a good example of how we can be divested of our comfort zone.  And perhaps just in a nick of time.

After living for 27 years within the forest shadows of the sunsets over the property, we woke up one day to find the woods gone, and loggers carting away the trees in wood chip containers.  With the blessing of our village government, too.  Only then did I realize I should have spoken up earlier.

Regardless of my regrets, I now pay much more attention to those events that happen outside my daily environment, and in the process, extend my comfort zone to include them.

I suspect it is like that for many of us.

 

Thanks for reading!  I hope you too are mindful of how things pass us by without much ado, and how they often present themselves later in startling poses.  Thanks for sharing! 

Standard
Culture, Government, Politics, Thank You

Small Town Choices

img_4363

The bridge in the park at Butler Lake. Early freeze.

You know you live in a small town when people drop by without calling first.

Tuesday morning a smiling lady appeared at our door presenting a mardi gras King Cake. She explained it was thanks for speaking up at our town hall meeting.

A couple days before that we found a handwritten note in our mailbox from a gentleman a couple blocks away wishing for good luck.

This morning another note came the same way, saying thanks.

fullsizeoutput_3865

148 “lock and leave” homes for those just passing through.

The cause of these overt gestures is the disturbing proposal to plop 148 homes on 15 acres of a 40-acre parcel of recently cleared land at the edge of our pretty little town.

We call it a Village, which is kind of habit in these parts, but it’s a real town, not a little collection of thatched roof cottages with small people running around in leggings and buckled shoes.  Over 20,000 people live here.

Anyway, because of the collective rejection of the idea, we formed a group of residents in the Village to make our case for stopping the development.

I won’t bore you with the politics.

What I do want you to appreciate though is the essential goodwill of the people who live here, and who love our little town.

img_0986

Lunch in the park, on a sunny Friday.

We moved here 27 years ago.  It was a corporate move, and we had the benefit of shopping around the far north suburbs of Chicagoland.  Our first obligation was interviewing three school principals, each who presented their school’s achievements.   One school had computers in every room, which was pretty special in 1990.  Carpeted hallways.    Another school was brand new, and shiny.

2014-06-13_14-12-45_734

School’s out and the midway comes to town.

The third, was older, but in the center of our little town, bordered by a ball field, festooned with flags, and shaded by ancient maples and oaks.  As the vice principal marched me around the classrooms, the students all smiled and helloed.  It was a very warm May morning, and as we marched through the heat of the second floor, I offered, “Guess there’s no air conditioning?”  He bounced back, “Nope.  Isn’t it great?”  Rugged, smiling enthusiasm.

img_1266

Canopied streets and open space set the tone.

I have for years thereafter said that moving here was the best decision we ever made.  On the July 4th weekend when the moving trucks pulled away from our new home, two of the neighbors’ kids brought over a plate of cookies to welcome us.

A couple of years ago, after a car demolished half of our house, a lady from blocks away appeared at our door one day with a gift card from Panera’s.  She said, “I just wanted you to have this, and hope that you are okay.”  A complete stranger, but not really, in the greater sense.

img_3966

One very dog-friendly town, these two await their family in the Homecoming Parade.

For sure, the schools are great.  Top-tier nationwide, the high school is launch pad for our next generation of leaders.  The junior schools are our pride and joy.

But beyond that, our little town is a hive of busy optimism, set on a picturesque palette of heritage buildings, generous parks, a network of lakes, streams and wetlands, and threaded with neat roads and lanes through open, treed neighborhoods.

img_1172

Two young parade watchers celebrate the downtown alley.

In the summer the town square is thronged with picnickers and market vendors.  In the days leading up to Christmas, Santa is taking last minute orders, and come the end of school, there’s a pretty spectacular fairground set up with horrendously noisy and garish rides.  A great venue for kids to escape for a while as summer approaches.

Even though there are 5-lane roads quartering the Village, its geography exudes community: a oneness of safety, children, exceptional schools, careful planning, well-being and promise.

I mentioned the goodwill of the folks who live here.  Many came to the town hall meeting last week and in front of a couple hundred neighbors, gave passionate testimony in defense of their small town.

img_1183

The village’s architecture is preserved and treasured.

One lady made a simple statement, but with profound meaning.  Before her, the discussion had recalled the past,  and how developers had walked away from our village to build their shopping mall in a neighboring community.  Another developer took its plans for a millionaire’s subdivision complete with golf course to another neighboring village.

Clutching the mike with both hands, she said, “We chose this village to live in because of its character.   We didn’t lose the shopping mall.  We didn’t lose the golf community.  We simply chose not to develop, and not to have them.  They aren’t what our Village is about.”

The debate on whether the 148 dwellings will materialize will continue.  They are described as low maintenance, “lock and leave” buildings for the travel and retirement set.

In the mean time, we’ll still be here, and the front door is open.

 

Thanks for reading!  I hope you will share this with your friends who also treasure the small town.

 

Standard