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Episode 28 – Industry Corner Podcast

IN THIS EPISODE: MTAC Part 1 - general session with Postmaster General, financial and informed delivery updates, the vice chair election results

Links to the resources mentioned in the podcast.

Household Diary Study


Chris: 00:00 Hi, this is Chris Lien.

Anita: 00:01 And I’m Anita Pursley. Welcome to Industry Corner, a podcast where we share postal industry news to help you stay informed.

Chris: 00:11 This will be part one of a two part podcast series. Recapping the August Mailers Technical Advisory Committee meetings. On part one we’re going to talk about the general session with Postmaster General, we’ll talk about the financial and the informed delivery updates and the vice chair election results. So let’s get into it. Welcome to the podcast. Hi, Anita

Anita: 00:32 Hi Chris, how are you today?

Chris: 00:34 I am doing great. I was able to make it back from MTAC this week, so I was glad to be able to sleep in my own bed for awhile, but you know, is always MTAC is just full of a lot of information. In fact so much that we’re going to split the podcast into two parts. And so I thought today you and I can kind of recap the general session.

Anita: 00:50 It’s nice to be recording right after the MTAC meetings too because it’s fresh on our minds.

Chris: 00:54 It’s fresh on our minds and there was a lot of stuff. And why don’t we start first with the way that MTAC typically begins, which is on a Tuesday afternoon and the first presentation in almost every MTAC meeting is from the postmaster general so it’s a great way to kick things off. And as a reminder to all of us that go to MTAC, this is the postmaster general’s mailer’s technical advisory committee. We are there to provide technical advice to the postmaster general, so it’s nice to hear from her first as to what’s going on. But at this time, Anita I sensed a real frustration for her. She’s usually very upbeat, but there was just some things that she was sharing that makes me think she’s kind of caught between a rock and a hard place.

Anita: 01:31 Yeah. Her first remarks were, you know, finances are deteriorating. And I was just thinking about how tough it must be for her to get in front of her audience, her major customers, and tell them over and over again, we need legislative reform. We need pricing flexibility, we need this, that and this that. But she did have some positive things to say.

Chris: 01:51 Let’s start with the board of governors. Right. So she talked about the fact that now we have a quorum, right? And all three of the nominees have not only been confirmed by the senate, Anita, but they’ve been sworn in now, right? They’re official.

Anita: 02:02 Correct. They are official, and they’re going through orientation. Can you imagine that?

Chris: 02:07 The governor orientation, right? Yeah, it’s back to school and back or back to school time.

Anita: 02:12 Talk about drinking from the water hose or whatever that phrase is.

Chris: 02:15 No doubt, because a lot of the governors are not from this industry with this vast knowledge of how the mail supply chain works and everything around that. So it’s a lot to to understand very quickly to come up to speed, because one of the first things that we want to see is that 10 year plan that we’ve heard so much about, but I can understand the postmaster general wants to have an opportunity for the governors to take a look at that. I think the first real time that they’re going to look at that, or at least comment on it would be that October 3rd board of governor meeting. Right?

Anita: 02:42 Correct. Publicly on the third that they have a closed door session on the second. We don’t know exactly where that’s going to be, but I’m guessing it’ll be in Washington. Um, but we’ll see. I would think that they’d be looking at it right now.

Chris: 02:55 Hope so. Yeah. That would be on your, your pile of, uh, you know, welcome to the board of governors position and by the way, here’s this 10 year plan that uh, ameliorates the $125 billion projected loss. So you know, I know we’re kind of chuckling, but it’s a very serious matter and it’s not just what the postal service is going to do in the long term as mail volumes change and fluctuate and we’ll talk more about that. But it’s also what can they do in the short term. And Anita. That’s where I’d have to say, and I know the PMG talked about this, that I’m very glad that they’re focusing on the logistics supply chain and specifically asked Robert Cintron to look at that and to use his vast knowledge of logistics and supply chain information to see if he can find a way to reduce those costs with it. I can’t think of a better person in that job. I have been a big fan of Robert for a long time. Congratulations toRobert Cintron, he’s the right person to work on that.

Anita: 03:45 And did you notice he’s not acting, I mean Megan made these decisions. He is VP of logistics and she mentioned of course that this transportation is their largest expense at $8 billion I think she said.

Chris: 03:56 That’s right. Yup. 8 billion is what I wrote down too. So it’s a large piece of it and in the list of things that are controllable costs and there’s not a lot for the postal service. They’ve done such a, a tremendous effort over the years under prior PMGs as well to try and get those costs down as much as they can into those controllables. But it’s, you know, more and more it, it comes down to where they’re trying to find any stone unturned, right. To be able to look and see where they can do that. And I’m glad that Robert is the person that’s working on that. The PMG also talked a little bit about the UPU, right? The Universal Postal Union.

Anita: 04:28 Right. But before we talk about that, there were two other announcements. Remember Luke Grossman? He was promoted to senior VP of finance and strategy. I don’t know. Do you know Luke? I do, but not real well.

Chris: 04:39 No, I don’t. I don’t have the pleasure of knowing him yet.

Anita: 04:42 He’s one of those people that really makes an impression right away. Kind of like Isaac Cronkhite. He’s young, he’s sharp, and apparently he’s obviously very highly thought of since he’ll be a senior VP reporting to Corbett. And then the other change was I like to joke, Dr Collin, you know Joshua Collin who’s the former AVP of the eastern area, he too is not in an acting role. He’s going to be the new VP of mail processing and maintenance. So apparently he, I think what Megan said was he leveraged the data that’s available to him to lead the country and service in the eastern area. So he must have been at the top of the heap for this position.

Chris: 05:21 I agree. And I’ve had the pleasure of going to a couple of PCC events and Areas Inspiring Mail where Dr. Collin was presenting and he definitely leverages the data. He’s a data-driven person and always has been. I think that’s why he, he ran the eastern area so well. So that’s another one where it makes a lot of sense, right person for the right job. So, so it looks like, you know, the PMG is making the right moves in terms of trying to get people into these positions to very quickly work on sort of the short term things. While we’re still waiting to see what that long term plan looks like.

Anita: 05:48 So the UPU. She addressed the uncertainties regarding that, the postal service directed by the US State Department to exit from the UPU and there’s an extra ordinary congress meeting set up. I think that’s in Bern, Switzerland. So that’s next month. And so we’ll know whether or not the postal service will be doing that or whether they’ll be declaring self-declared rates.

Chris: 06:14 Right. And we heard a little bit about that too. When Joe Corbett, the chief financial officer got up and spoke as well. And you know, certainly there’s some angst in the room, particularly around votes for a military servicemen and women that are stationed abroad that are trying to get their votes back through the United States postal service. You know, how is that going to work if we’re not part of the UPU. And you know, again, they talked about the fact that the postal service is part of the administrative branch of the government and the State Department absolutely has authority as outlined in postal accountability enhancement act in 2006 but it’s really all about trying to create, as Joe was saying, a level playing field. There’s a disparity right now for certain countries that are getting a lower postage rate effectively for mailing within the United States. You know, they’d ship it overseas, say for example, from China, it’ll land here in the states, and then from the point of entry in the United States to its final destination, the postage to cover that distance is quite a bit less than somebody that’s here domestically and so that creates an unbalanced situation and I think that that’s really the part that the administration is trying to address.

Anita: 07:17 Yeah, it was brought up quite a bit. Corbett mentioned it as you said, they have a worldwide RFP which is in house now and they’re evaluating the commercial options that they have if they do leave the UPU. So quite exciting times. We might have to talk about that again on the next podcast depending on the outcome.

Chris: 07:34 I agree. Well, let’s talk a little bit about what Jakki Strako had to say and again, before we get in the numbers, I was like to hear from Jakki. She’s very enthusiastic, she’s passionate about mail. I love the postal passion and she had some great information to share, too. Of course she started out by talking about the postal customer council events that are coming out. There’s a hundred events across the country that third week in September with 140 PCCs involved and it’s all going to be focused on growth. And that’s really what we need as an industry is to continue to focus on how do we grow awareness, attention and certainly volume for mail because mail absolutely works.

Anita: 08:09 Right. And then the disappointing thing when she said that their research shows that mail is losing its seat at the table.

Chris: 08:16 It is, we talked about that and that was in the household diary study as well, that it’s dropped from what was a relatively steady 12% of the general marketing budget that a chief marketing officer would spend. That mail was about 8% now. But what seems to go against that is some statistics that they talked about from the mail moment study, where they survey 2,500 people and it talked about how mail is still very favorable in terms of the way that people interact with it and engage with it. Particularly amongst the millennial demographics.

Anita: 08:48 Those charts that she showed where mail is dropping and digital is increasing, but their research shows that when they combine them, that’s really the most effective way to promote.

Chris: 08:59 It’s a 3X ROI three times. So if you have physical and digital combined together strategically, and of course now with informed visibility through mail tracking service providers like BCC software, you can strategically time that digital complimentary message. And when you do that, you’re looking at a 3X ROI, s o very powerful.

Anita: 09:20 I didn’t know that they conduct this study twice a year and they’ve been doing it since 2012 I believe they said.

Chris: 09:26 That’s right, yup. A couple of key takeaways that they talked about. 77% of consumers check their mail five days a week. 59% read their advertising mail before discarding it. So think about that. You know, how much digital advertising is in your delete box, your email that you never even looked at. Right,

Anita: 09:43 Right. Quite a bit.

Chris: 09:45 And they can be falsely a given some kind of an attribution score to it because they arrived at your inbox. Well you never even read it. Here 59% are actually reading the physical mail before they make a decision of what they’re going to do with that. And they’re spending on the average 10 minutes working through the mail sorting and opening it, looking at it. It’s just crazy when you look at that. And when you think about it Anita informed delivery as a digital complementary to the physical piece, informed deliver campaign, it’s at 11.8% national saturation, meaning that nearly 12% of every household in the United States has at least one person receiving an informed delivery email. So this is all starting to grow to a point where I think we as an industry have an opportunity to start promoting it much larger and louder than we’ve done before.

Anita: 10:31 Yeah. 11.8 that continues to rise. They’re at almost 19 million users now and they’re adding 208,000 every week. So it’s really growing at a pretty impressive rate.

Chris: 10:43 But again, at the end of the day, and like I said Joe Corbett talked about it as the financial situation from the postal service continues to be dire because of the drop in first class mail and then the costs and just the volume. You know, we saw declines in volumes across the board, including parcels packages. FedEx decided to cancel certain agreements that they had with Amazon. Well, that whole landscape of packages is changing dynamically.

Anita: 11:05 Yes. Joe called it the topsy turvy market.

Chris: 11:08 That’s right. Yeah. Yeah. And that’s where a lot of the revenue was coming from. So hopefully we can again change the talk track and direct mail for direct marketing. And as I’ve said before, and I told the PMG when I chatted with her, you cannot do multichannel marketing without direct mail. It has to be part of the mix. Otherwise you’re missing out. And again, with a measure of 3X for the ROI, you’d almost be foolish not to even include that.

Anita: 11:31 Right. Hey, were you aware of that 45 minute online course that Jakki mentioned? Or maybe it was Marcus that mentioned it, but, uh, it’s the USPSmailjourney.com. I wrote that down and I looked it up this morning and I’m going to take it as soon as we’re off this podcast cause it looks really intriguing.

Chris: 11:51 Interesting. Okay. So we’ll have to take a look that as well. Maybe that’s something that we can post up on our webpage for our listeners to be able to take advantage of as well. Anything else from the opening session?

Anita: 12:01 Well, you know, Joe of course had his typical joke in the beginning when. When is red GO and green STOP? When you’re eating a watermelon. But anyway, let me just say one thing about Joe’s comments and of course, as Megan mentioned, they’re deteriorating. But one thing he said that was interesting to me was that it’s alarming, but you shouldn’t be alarmed. I don’t know if you picked up on that, but it was, you know, one of the biggest factors in that loss of $6.5 billion year to date was from the workers’ compensation adjustment and the non-catholic adjustments. I don’t really understand all of that.

Chris: 12:41 It has to do with gap accounting and the way that they’re recognizing where the projected costs of benefits and things like that. And some of that is related to how the markets are fluctuating with that. I heard that too and I get that. That’s a valid point, but at the end of the day, it’s mail volume and so I’m still gonna continue to pound the table and say that we need to find a way as an industry, particularly for those mail service providers that I know are listening to our podcast. We need to work together to make sure that we’re leveraging this incredible data that the postal service now is making available, whether at the household diary study or the office of the inspector general reports or this mail marketing study that we talked about briefly there. How do we pull that together and make that the conversation that we’re having with our customers and our customer’s customer.

Anita: 13:26 Right.

Chris: 13:28 So pivoting into informed delivery, we got some clarification on that.

Anita: 13:31 Right, that was the main homeroom topic.

Chris: 13:33 It was, yeah. And I really liked that format where we spent some quality time with all of the VPs up in front. It was a great open session, if you will, for a good hour talking about informed delivery, making sure that we all understood what we need to do. And there were a couple of key points that they came up with for our listeners to be aware of. Right?

Anita: 13:50 Right. it was Pritha Mehra, Bob Dixon, Marc McCrery, Gary Reblin. I mean they were all there because they listened to us, our concerns about the promotion and the platform itself and the speed and the capacity and the security. So all of those things were addressed.

Chris: 14:06 So a couple of things that our listeners need to be aware of. So first of all, let’s talk about the campaign. You need to submit the campaign information before you begin the mailing. So that’s a challenge for the supply chain because that means now you need to do something at least really a day or two before you’re going to enter the mail. You have until noon eastern the day prior to statement finalization to get that campaign information uploaded either through the mailer campaign portal or through your eDoc with your mail.dat or your mail XML information. So if you’re going to be participating in informed delivery, do not wait until the day of the mailing to upload that campaign information. You’ve got to do that ahead of time. Otherwise that’s going to be a failure. That’s our number one problem with that. So again, you have until noon eastern the day prior to the statement finalization and you need to make sure you’re using the right informed delivery promotion code PI is the proper code that needs to be entered in on the postage statement to do that. So that’s really the two key things that I know the postal service wanted to get across. The third item is, you know what happens if you’ve got questions, if you need help, if there’s something going on, they do want you to contact the PostalOne help desk initially because you need to get a ticket. The postal service’s help system is all ticket based, which is a little bit different than you know with BCC Software where you know, we’re happy to take a ticket, but we’re also happy to take the call right away. Uh, just a little quick plug there, but do start with PostalOne help desk, get the ticket there and then if you need to follow up with the promotion informed delivery at usps.com and when you call them, make sure you’ve got all the pertinent information right? Issue claiming discount that you’ve got your help desk ticket number, you’ve got the MIDs and CRIDs that are involved in this. Just being prepared with that. But the most important thing that I want our listeners to know is you’ve got to get that campaign information uploaded, either mail.dat or through the mailer campaign portal before you finalize the postage statement.

Anita: 15:55 That’s very good advice. And then the security enhancements, it seems like there’s still a ways to go on that, but they’re focusing on malware protection and making sure that no one can create a campaign for you so that the CRID owning the MID actually is notified when a campaign is created just to make you know, to have that extra level of security.

Chris: 16:17 Yeah, exactly. The postal service wants to make sure that when they start sending an informed delivery campaign information that it’s going to the right person, that you don’t have somebody either accidentally or you know, dare I say purposefully try to somehow register for a campaign and get somebody else’s information about that. They have to be very careful and I’m glad you mentioned the, the malware part of that. The postal service is actively checking all of the URLs that are submitted as part of this campaign and unfortunately the CISO department has found that there was with least one situation where malware was involved. The other note too is that if you’re using URLs, they have to be https, they have to be secure web pages. So that’s something else. Just as a heads up for everyone that it’s gotta be https for any URL that you’re going to be using with that. But I will say that Pritha Mehra, you’d mentioned that she was there too. She talked about some great improvements that they’ve made for multithreading on their servers to increase the email speed and the portal loading time. They’ve improved the report generation metric monitoring and so they can do a lot of things now with that to be prepared, I have to say walking away from it, Anita, I felt better about the postal service’s preparedness for this, but I do worry about our listeners in the industry and making sure that they’re prepared with what needs to be done.

Anita: 17:33 Right. Well, there’s a lot riding on this campaign.

Chris: 17:35 There is Gary Reblin talked about how he’s expecting at the end of the year to talk about these incredible increases in usage for informed delivery and multichannel marketing. As a result of this, this is going to be a big, big, big push and as I said before, hopefully this will start to wake up marketers and realize, hey, there’s an opportunity here to do multichannel marketing, which includes direct mail. It’s gotta be part of it,

Anita: 17:57 right? Hey, let’s close it out with the new MTAC vice chair news.

Chris: 18:01 All right, big news. Yeah, so we have a new vice chair for MTAC and in fact they’re going to start serving as vice chair immediately. And Anita, the new vice chair for MTAC is… Bob Rosser. Yes. Congratulations Bob. And also congratulations to Rose Flanagan. She gave a fantastic speech and I know she campaigned very hard and MTAC would have been uh… either candidate absolutely solid. Bob Rosser was elected as the MTAC vice chair and because another Bob, Bob Schimek, whom I know a lot of our listeners know, Bob Schimek, unfortunately because of his change of his employer, it represented sort of a conflict of interest for him to continue to serve at MTAC. So Bob resigned from MTAC or resigned his vice chair position. So Bob Schimek will not be moving into the chair position. Instead. What we’ll do is Bob Rosser will immediately assume the vice chair position. Wanda Senne, who is the current chair will continue for one more year as the chair and then Bob Rosser will move into the chair position for 2021 and that sort of gets us back onto the normal schedule so that we can do elections then and be able to try and get things back on track. So we’re going to have a special vice chair election in 2021 for the next vice chair. So will be a couple of years here where it will be a little bit of a blend between Wanda and Erv Drewek continuing for an extra year and then the vice chair serving a little extra longer as well in these roles just to kind of get everything on track.

Anita: 19:27 Right. And then at the October meetings we’ve got elections for the leadership positions, which are changing also.

Chris: 19:33 They are quite a bit, instead of mail class focus, it’s going to be more shape focus. We’ll have five leaders that are going to be mail shape focused for First Class Mail. It’s going to be a letters for first-class and then letters for marketing mail, so two individuals for focusing on letters. We’ll have two individuals focusing on flat shape, mail flats for periodicals and flats for marketing mail, which also includes like bound printed manner and then a fifth person that will be focused on package services, so five shape leaders as opposed to the four class leaders, but we think that that will help to get a little bit more focus on how the shape of the mail is changing that and then to keep it as a total of eight we’re going to have three focus areas, leaders that are aligned more with the c-level areas for the postal service.

Anita: 20:17 Right. I’m excited about the change. I think it’s still kind of a work in progress, but they always are when there’s changes like this.

Chris: 20:22 They are and it gives two years just to kind of see how things are going to work with this structure. Certainly, it doesn’t mean that we can’t make some adjustments, but as a reminder for our listeners, even though two years sounds like a long time, it’s really just eight MTAC meetings around this. So I think that that’s an opportunity to take a look at this. We talked about shape based focus for a while and I’m personally glad to see that we’re going to take a look at that more closely and put that in place. Anything else Anita?

Anita: 20:46 No, I think so. We were right on though. We knew there was a lot to talk about so I’m glad that we’ve decided to do it in two parts, so we’ll talk again.

Chris: 20:54 Well thank you Anita for the information and part two we’re going to talk about the focus area meetings. We’re going to talk more specifically about what we did with focus and that will help to set the stage for the postal customer council meetings later on in September. So Anita, thank you again for all the great information.

Anita: 21:08 Thank you, Chris.

Chris: 21:10 Thank you to our listeners for tuning in. We appreciate your feedback on the podcast. If you have any questions, please visit BCCsoftware.com or give us a phone call. As always, we’d like to know how can we help? Thanks and have a great day.

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