On October 1, 2021, the USPS announced that First-Class Mail would slow from one-to-three-day delivery to one-to-five-day delivery. While it stated that this change would not impact 61% of mail, this is only with respect to the organization’s targeted objectives and may not be the reality in terms of how your mail had been delivered. The change will be far more impactful because organizations are going to have to change their workflows to adapt to the reduced delivery times. Here are some steps you can take to prepare for these changes.
The main reason for the slowing of mail is the USPS wants to reduce its dependency on third-party air couriers that are expensive and make planning difficult. It wants to move most of the mail to truck delivery and be more in control of its delivery standards. This does not impact local deliveries already delivered by truck, but as items go farther throughout the country, this shift can make a big difference.
Here are the largest changes that mailers will see:
1. Although the USPS states that 35% of mail would be delivered in two days, this percentage was higher in the past at 43%, and many of these local items were delivered the next day. Now the USPS states only local presorted mail can get next-day delivery.
2. The cut-off for two-day mail went from 280 down to 140 miles, further reducing the amount of mail receiving this standard.
3. The remainder of mail (57%) that used to get three-day delivery has now been reduced to 35%, with many the remainder getting four-to-five-day delivery.
4. Not all mail will be delivered in the five-day delivery targets, and based on distances and remote areas, some could take much longer.
Largest Areas of Impact
Now that we are faced with this new reality, it is important that we adjust how we process our largest mail streams to adapt to these changes.
- Invoices and Statements – This is the largest single source of First-Class Mail and will have the greatest impact. Sending bills to customers is the lifeblood for millions of companies, and they will have to plan for these changes because it will impact their accounts receivable collections. If mail has slower delivery, they will get paid later, impacting cash flows.
- Accounts Payable – Most companies try to pay invoices at the latest times possible to maximize their cash flows. Payables going farther distances will have to be paid earlier or late fees, finance charges, and collection issues will accrue.
- Reminder Mailings – Many organizations send postcard reminders for services. These will have to be planned better to adapt to the slowing mail streams. On a positive note, the USPS just announced new size standards that allows these postcards to be bigger (increasing from 4 ¼” X 6” to 6” X 9”), so more information can now be displayed at the same rate.
- Outsourced Mail – Most of the large-scale mailings are not processed in-house but are done through third-party print and mail services. Where these services are located is now significantly more important. If you are mailing nationally and your service is in New York, it is going to take much longer to reach many of your customers than if the provider was based in the Midwest. Also, does your provider have one facility or do they have any ability to distribute your mailing through different locations scattered closer to your customers’ locations? Conversely, if your mail is primarily local and you are using a mailer in a different part of the country to save money, it may be costing you on increased delivery times.
Visibility Drives Change
The biggest issue we see in most organizations is they do not have the visibility of their mail across the enterprise to know what changes will need to be made. To gain access to the data to quantify the mail spends, implement these best practices:
- Start with accounts payable and get an export of the mail spends from the largest mailing vendors and the USPS.
- Get copies of key invoices to see the details on the accounts that are generating mail.
- Reach out to the mailing vendors to gain access to their web portals and link the identified accounts. This provides visibility to mail volumes.
- Go to the largest volume departments identified in the steps above to document their workflows.
Creating a Plan
Now that the largest mail streams have been identified, it is critical to come up with a plan to drive change. Here are some areas that need to be considered:
- Invoices may need to be mailed earlier or production times sped up to maintain cash flows.
- Mail volumes from different areas may need to be consolidated into single workstreams to get better postage rates through presort, which can have faster delivery.
- Accounts payable might want to set up more vendors for ACH payment and adjust payable time periods for vendors located farther away.
- Outsourced mail could be put out in a request for proposal (RFP) to identify where it can be produced closest to the customer or if more integrated planning needs to be done with partners to speed up when mail is sent.
- Reminder mailings are converted to presort services where there is a better chance for local next-day delivery.
- Clients can be given incentives for electronic delivery methods, eliminating the need to mail hard-copy pieces.
It is easy to be upset at the USPS for these changes, and no one likes reduced service levels. On the flip side, the Postal Service is adjusting to our rapidly decreasing mail volumes, coupled with more places it needs to deliver. If we expect the USPS to sustain itself through the future, it needs to become more cost-effective, and hopefully these changes help it achieve these goals. It is our job as consumers of the USPS to adapt to these changes, but to do it in a way where we are in the highest control to optimize our own environments. It will be interesting to see if these changes reduce mail volumes at a greater speed now that organizations are incentivized to develop creative ways to eliminate sending mail.
Adam Lewenberg, CMDSS, MDC, President/CEO of Postal Advocate Inc., runs the largest Mail Audit and Recovery firm in the United States and Canada. They manage the biggest mail equipment fleet in the world and their mission is to help organizations with multi-locations reduce mail and parcel related expenses, recover lost postage funds, and simplify visibility and oversight. Since 2011, they have helped their clients save an average of 58% and over $68 million on equipment, presort, avoidable fees, and lost postage. He can be reached at 617.372.6853 or email@example.com.
This article originally appeared in the November/December, 2021 issue of Mailing Systems Technology.