There has been a lot of negative press recently about the United States Postal Service and whether or not they can remain a viable ‘business.’ Yes, they are a business. They are a semi-independent federal agency that does not get budgeted tax-supported funding, so they run on their own revenue – like a business. It is easy to arrive at the conclusion that the USPS doesn’t run their business very well because they are struggling and they are in the process of implementing another postage increase. And, of course, the press is very good at spreading the negatives of any situation. There is more to the story however….
Government Throw Down
The USPS has been self-supporting since 1971. Even though mail volume has declined over the recent past due to the Internet and email, the USPS was doing quite well until 2006 when the federal government decided to ‘pass another law.’ In 2006, congress passed the Postal Act of 2006 which included requiring the USPS to wholly pre-fund its retirement health package. In this legislation, the USPS is required to cover the health care costs of future retirees, in advance, at 100%. This put a huge burden on their budget. Businesses do not pre-fund such benefits at more than 30%, and the percentage is typically lower than that. No other government agency is required to fund future health benefit packages to that extreme. This pre-funding amounts to $5.5 billion a year for 10 years. This is a huge obstacle to the USPS running a solid budget in the black.
There are actions the USPS is taking to reduce their operating costs such as consolidating facilities, using existing businesses such as grocery stores to operate from, and possibly going to a 5-day a week delivery. The bottom line is the USPS is not going away. The government will find a way to retract their ridiculous law or otherwise help fund the USPS. Rest assured, the USPS will deliver our mail like they have been doing since July 26, 1775, when the Second Continental Congress named Benjamin Franklin as the nation’s first Postmaster General.
The United States Postal Service knows mail. They know how to get the mail in the mailbox in a timely manner. They are very good at what they do and are not going away. Direct mail is still one of the least expensive lead generating tools in the marketing industry and people still like to sort their mail and look for goodies. The tactile experience of opening letters and feeling the gloss of a well-designed mail piece, combined with a great offer, works to generate interest and phone calls.
MSI’s own John Millet has been on the Postal Customer Council for the Greater Sacramento Area for over 10 years and was Board Chairman for a total of 5 years during that period. We are consistently up to date on USPS news and special offers, such as the QR Code postage discount that many of our customers used recently. If you want the best postal rates possible for your particular mailing, call your sales representative or our receptionist at 916-631-7400 to speak to a representative.