Tag Archives: Pieces and Weights

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!

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Culture, direct mail, USPS

Tremors At The Post Office

Spoiler Alert: Numbers That May Surprise You!

The latest USPS report on mail volumes is out, and magically, incredibly, it points up.    The number-laiden Revenue Pieces and Weights report January 1- March 31, 2016 tells us volume for the past quarter was up 1.4%.

Big Business

For many of you, the news is lame. After all, what is an additional 520,183,000 pieces of mail? Actually, it turns out to be 37,414 tons, the equivalent weight of 454 Space Shuttles.  Which again points to the enormity of the US Postal Service.

Critics tend to discount the post office for its supposed obsolescence, but if you hang around a mail sorting facility for a moment, you know this is BIG, massive business.

So I for one am excited that mail volumes grew this past winter.

 

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Direct Mail and First Class Up

The better question may be why are they up?   It turns out that Direct Mail increased 1.9% over the same quarter a year ago, 355,488,000 pieces.   That could be related to political fundraising mail, and a cautious optimism in the economy.

First Class mail increased by 0.8%, 135,253,000 pieces.   An astounding turnaround!  Mind you, that includes all business mail.  When it comes to individually stamped mail, like birthday cards, bill paying and charitable donations, it was down 2%.  There is more intriguing news on this personal category in a moment though.

The big winner is Parcels and Packages which are exploding, correction, booming, sorry, mushrooming 13.2%.   This past quarter the USPS delivered 1,121,723,000 parcels, total weight: over 1 million tons.

The Magazine Subscriber Fails To Renew

What the report also reveals is the continued slide of Periodical volume: magazine counts dropped by 5.6%– 81,070,000 pieces over the three months compared to 2015.   Magazine subscriptions continue their slide.

The eye opener in this display of numbers is how mail looked just five years ago.   In 2011, total mail count for the quarter was over 41 billion pieces.   Since then volumes have dropped 6.7%, about 3 billion pieces.

While this is a generally understandable result of internet and social media, it is worthy of note that direct mail dropped only 3.4%, thus illustrating its successful economics.   By comparison, First Class Mail dropped nearly 13% in the same period.  Magazines, down 22%.

Parcels On The Move

You have to hand it to USPS management for the growth in Parcels.   While the internet may have crushed letter mail volumes, it opened the door for USPS package delivery.

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In 2011, Q2 Parcels totaled 667 million pieces.  This past quarter, USPS delivered 1.1 billion parcels, up a whopping 68% over five years.  And revenues? $3.7 Billion, up 82% from 2011.  The more we buy online, the more the post office delivers.

The significance of Parcels growth is that these numbers represent the USPS position in a competitive market with peers like UPS and Fedex.

Is Internet Migration Finished?

The encouraging story about Stamped Letters is worth a peek.   Personal letter volume cratered in 2008 and 2009 by -17.2%, and in 2010 by another -16.3%.    Since then, like a plane pulling out of a disastrous dive, Stamped Letters have nearly leveled out this past quarter at only a -2% decline.

 

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This leads one to believe that the attrition of postal mail to email and social media has just about finished.

Next month marks the end of another quarter for USPS record keeping. It will be interesting to see how the impact of the recent 1-2 penny decrease in price might improve mail volumes.

The direct marketers will take note, and who knows, maybe someone will pick up their pen and write one or two more letters as well.

Here’s the report for you review.  Enjoy!

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direct mail, Economics, Marketing

USPS: The Report Nobody Sees

The USPS has published its quarterly Revenues, Pieces and Weights report (RPW) and some trends for both optimists and pessimists will start you thinking.  First off, understand that the post office doesn’t observe the normal calendar year, so the numbers shown here are normalized to January-December.

Revenues for the year, up 3.3% Slide1
First Class Mail, which includes all the bank statements and financial releases, plus personal letters and cards saw a 2.7% increase in revenues.   Pretty good, considering that the class took a 5% increase in price.

Standard Mail which is entirely promotional and non profit mail boomed 5.5%.   If nothing else, this is an indicator that the market was ready to invest in Direct Mail.

Periodicals revenues were flat, indicating the continued effect of online access to reading material.   Parcels were down as a result of a drop in media and library mail.

Pieces down, virtually flat -0.7% Slide3

The big win for the USPS was its ability to bag an increase in pricing without a significant drop in pieces.   In 2014 the post office delivered 152 billion pieces of mail, magazines and parcels, down a billion… but what’s a billion?   Fundamentally, piece count is the physical evidence: choosing to mail hard copy versus an alternative, such as email.

Drilling in to the numbers, Standard Mail grew a billion pieces, or 1.7%.   As can be expected, First Class dipped 1.5 billion.   Interesting, in Q4, which includes Christmas, volumes were up in all FCM categories except for single cards and letters.   Despite our best hopes, the Christmas season didn’t materialize on the kitchen tables of America as stacks of holiday greetings mail.

The most worrisome segment of the pieces category is Periodicals, which illustrate the rapid decline of magazine mail, the real victim of web communications today.  Periodicals dropped 4.7%.

Tonnage down 3.2%

Slide4While pieces are down slightly, the total weight hauled took a big dip: 500 million pounds or 250,000 tons.  For the record, the USS H.W. Bush Super Carrier weighs 100,000 tons.  Can you imagine losing 2-1/2 aircraft carriers in the mail?

But to the point, while mailers only backed off mailing pieces by 0.7%, they were much more careful to lower the weight of each package.   So the USPS still walked as many routes as last year, but their trucks didn’t use as much gas.

Slide5The drill down shows that Standard Mailers lowered their kit weights by 4.4% to 1.59 ounces on average.   Given that the postage is the same for up to 3-plus ounces, it is likely that printing costs drove down the weights.   That, and fewer Flat-sized kits.

Periodicals dropped 1%, which translates to fewer page counts, and less advertising.  Parcels and packages were down to 2-1/4 pounds.

Only First Class mailers upped their weights.

The Cost of A Stamp Up 4.1%

Slide6First Class postage took a real price increase of 5%, and watched its volumes decline 2.2%.

Standard Mailers took a 4.2% increase and grew their volumes 1.2%.   This is a clear indication that Direct Mail is enjoying the effect of its financial results in the market place.

Only Packages saw a price decrease, which spelled a slight increase in volume.

What’s Next?

We’ll see how the postage increase affects volumes and revenues after April, 2015.   Mean time, it’s a safe bet that Direct Mail is headed in the right direction, and may ultimately be the driving force in USPS revenue stability going forward.

Kudos to the USPS navigating its way through these changing times.   If you would like to see the RPWs they are available here…  http://about.usps.com/who-we-are/financials/welcome.htm

If you have a question, comment or observation about this report, let me know!

 

 

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