Why Mail Remains Important In The Digital EconomyAugust 1, 2019
“Email is faster and cheaper than snail mail.”
“I pay all of my bills from my phone.”
“The only mail I get is junk mail.”
Sound familiar? These comments and similar statements are often made in arguments against the need for the United States Postal Service (USPS). While there are elements of truth in each, mail remains a relevant and integral part of the country’s economic and legal engines.
Most reports about the decline of mail go back to 2005, the last year the USPS saw an increase in First-Class Mail volumes. In 2008, the recession hit, significantly impacting the volumes of mail, especially from financial institutions. As the recovery strengthened, the decline in mail slowed.
In the last five years, First-Class Mail volumes have dropped from 63.8 billion pieces to 56.7 billion pieces, or about 11%. This is a significant decline, but not a steep off-the-cliff drop. Most of that decrease has been in single-piece mail. The majority of these pieces are not personal letters, but bill payments. Companies have successfully convinced almost 50% of their customers to either pay their bills online, or have the amount directly withdrawn from their checking accounts.
However, far fewer customers want to only receive bills and statements electronically. The volume of commercial First-Class Mail – the mail companies send to their clients and partners – has only decreased by 10% during those same five years. Despite offers of incentives or the threats of additional fees, most people still want a paper copy.
USPS Marketing Mail, that is direct mail from companies and non-profit organizations, remains almost constant, with a slight decline of 4%. Marketing and development professionals have seen higher sales and other responses when they integrate postal mail with online marketing and other online outreach. When companies take advantage of the USPS Informed Platform – combining the benefits of Informed Delivery and Informed Visibility – they more effectively communicate with prospects and customers.
Many legal documents, like insurance cancellations or utility shutoff notices, must be delivered through the USPS. Some laws stipulate the class of mail or special services (e.g., Certificate of Mailing) that must be used when sending the notice. And while the USPS offers electronic signatures, many companies still attach the PS Form 3811 (aka “Green Card”) to obtain physical evidence of delivery.
Changing those laws will not occur overnight. While some states have passed legislation providing for alternative notification methods, there have not been many court cases upholding the changes. Without case law to back them up, most companies are resistant to be the first to move away from communication via physical documents, i.e., mail.
Lastly, with concerns surrounding voter turnout and the security of polling systems, there is a renewed interest in vote-by-mail. Over 20 states have passed laws allowing certain elections to be conducted by mail. Oregon became the first state to conduct elections entirely by mail, followed by Washington and Colorado. In 2018, Oregon had almost 63% of eligible voters cast a ballot, compared to the nationwide average of 47%, a 50-year high. An added benefit is that vote-by-mail is up to 40% less expensive than in-person voting.
However, the USPS, like the rest of the country’s transportation infrastructure, is not in the best shape. An aging vehicle fleet needs to be replaced. Processing plants require significant investments to upgrade and automate. The ratemaking system is mired in controversy. And the Board of Governors has fewer than 25% of the appointed members mandated by law.
There has been a great deal of focus on the USPS and the delivery of packages. This includes claims of improper allocation of expenses to the discounted deals for companies like Amazon, FedEx and UPS. These issues are important but miss the larger picture. Two-thirds of USPS revenue comes from mail, not packages.
Companies need statements, bills and payments to thrive. Marketing mail drives online sales and charitable donations. Legal notices protect companies and consumers. Ballots ensure free elections. The common thread is that they all rely on a vibrant and financially stable USPS to complete the delivery.
About the Author: Mark Fallon is President & CEO of The Berkshire Company, an independent management consulting firm that specializes in the print-mail industry. For additional information visit www.berkshire-company.com.