Links to the resources mentioned in the podcast.
Chris Lien (00:00):
Hi everyone. I'm Chris Lien, welcome to Industry Corner, a podcast where I discuss postal industry news to help you stay informed. On today's podcast I recap the recent Mailers' Technical Advisory Committee meetings, provide an update on the impact of the mailing industry from the COVID-19 pandemic, and share some thoughts and tips on remaining essential during this pandemic response.
Chris Lien (00:26):
Hi, and welcome to the podcast everyone. I'm going to start first by recapping the Mailers' Technical Advisory Committee meetings that were held at the end of March. Now these were a very different type of Mailers' Technical Advisory Committee meetings or MTAC in that they were all done via teleconference and webinars, and normally it's a two to three day event for MTAC. In this case, it was a single day back to back teleconferences and webinars with the MTAC members all attending remotely and the Postal Service hosting that from headquarters in Washington DC. The MTAC meeting started off as they typically do with the Postmaster General giving some opening statements. She reaffirmed that the mail and shipping services like the United States Postal Service® are essential businesses and this is certainly codified in law and established in the Constitution Article One, Section Eight, and by way the mailing industry is essential so companies like BCC Software and the mailing service providers and many of our listeners, your business is essential and we need to continue on in this during this temporary pandemic – but it is having an impact on the mailing industry. The PMG had noted that some of the carriers for the Postal Service have contracted the Coronavirus and that the Postal Service is following proper guidelines as established by the CDC for that. There is an impact in volume, too. In fact, a webinar that I attended just recently, a few days ago, noted that letter volume is down 20% compared to prior year. Flats are down 40% compared to the prior year. Packages are up and we would expect that. Up 17% compared to the prior year. And there was some early speculation that overall we could be seeing a volume reduction of possibly 50% by June. But that's again, a speculation and we're not certain what's happening with that. I can say that for BCC Software, and we certainly did see our daily addresses processed as part of our National Change of Address services go down during the month of March, but we're starting to see them go up here in April again, so that may be an indication that a lot of our customers are beginning to mail again.
Chris Lien (02:16):
Marketing mail of course is being hit the hardest of all the classes at this particular moment because a lot of those stores, restaurants, bars, et cetera, are closed. So it doesn't make sense to mail out any advertisements to draw people into those establishments when they're not open right now. The industry has been asking the Postal Service to look for some postal relief. One of the suggestions that came up recently was a summer sale. This was an idea that was suggested a long, long time ago. There was an individual by the name of Mr. Bernstock that was with the United States Postal Service. I think he was one of the first people that had suggested that, those promotions and things like that, and we've seen a lot of those with the Postal Service lately. The problem with a lot of those are they require the Postal Regulatory Commission oversight and often that takes a long time, so not sure if we're going to get any postal relief with that regard.
Chris Lien (03:01):
Certainly in terms of relief for the Postal Service though, we did see some opportunities there with the recent Care Act passed by Congress that did provide a $10 billion borrowing limit expansion for the United States Postal Service. As a reminder to our listeners, by law, they have up to $15 billion that they can borrow. They'd been paying back a few billion dollars of that and now with this law they've expanded an additional 10 billion that they can add on to that. There was some recent talk about the Board of Governors trying to go back to Congress and ask in the next round of relief if there is in terms of legislation looking for some additional revenue for the Postal Service, one suggestion was a $25 billion revenue offset to help them. A $25 billion for “shovel ready projects” which really haven't been specifically presented. We're not sure what those are, what that would be tied to. An additional $25 billion on restricted line of credit and then some concept of a debt forgiveness.
Chris Lien (03:55):
Really, and again, this is a little bit of an opinion, but the financial problems for the Postal Service, for the most part, were really introduced as part of the Postal Accountability Enhancement Act in 2006. The pre-funding retiree healthcare that's required under law is causing a lot of the financial losses that the Postal Service is presenting. Some of this is really accounting numbers and finance that they're representing on it, but really it's a problem that Congress introduced. Congress needs to fix that and it would be nice to have Congress while they're out there working on legislation to go back to the core issue. And that's removed that pre-funded retiree healthcare benefit. Some of the other topics that we covered on that MTAC, uh, that are important for our listeners is the CASS Cycle O. And we've talked about that before, the various CASS Cycles over the years. We haven't had one in awhile.
Chris Lien (04:40):
And so we've kind of been building this wish-list, if you will, of different address quality enhancements. We discuss something in CASS Cycle O, and in fact that name has been expanded to include Address Quality Cycle O updates – this is a name change to reflect the fact that CASS-Certified software. Now those changes impact a lot of other things, chiefly the National Change of Address database. And so instead of calling it a CASS Cycle, it's really an Address Quality Cycle O. We were well on our way to having an August 1st, 2021 implementation on that, but unfortunately due to the COVID-19 pandemic situation and the impact on the industry and in the Postal Service, the suggestion is to possibly delay that. There was a notification announcing it, a delay, but we don't have a specific date. I know I reached out to the National Customer Support Center just urging them that if you're going to delay the CASS Cycle, be very sensitive to changing the date from August 1st which is typically when it goes into effect in a calendar year.
Chris Lien (05:35):
If you move that, either way it can become problematic because as a reminder, the software providers have to have our software to our customers at least 90 days prior to the required implementation date and so we want to make sure that we're not intruding on the Fall mailing season or that we're not bringing it too early in the year and interfering with what I sometimes refer to as aftershocks of the postal rate price changes on an annual basis. Sometimes we implement those prices, of course in January, and it takes about 30 to 60 days before we realize what some of the unintended consequences may have been on that. So just ask the NCSC to be a little bit sensitive to changing the date on that particular one, you know, because the industry has kind of built systems around that. Sort of on a positive note for MTAC, Informed Delivery continues to gain a lot of strength and adoption.
Chris Lien (06:22):
We're now, again, as of MTAC, we are at over 23.6 million users of that. Just over 18 million email enabled users and now over 19 million households have Informed Delivery, at least somebody opening that up and it still has a really strong open rate of over 62%. So that's a great saturation, in fact, some areas in the country are seeing over a 20% opt in, if you will, on the Informed Delivery. And that's a great thing because it's going to mean an opportunity for the Postal Service to provide a digital message combined with the physical message to have that multichannel opportunity. And many, I know for BCC Software, many of our customers have been taking advantage of that using our software technology and working with their customers to be able to present that color replacement image or stronger call to action with that ridealong click through button that takes to a personalized URL, so a lot of great opportunity with Informed Delivery.
Chris Lien (07:17):
Speaking of the digital information, you may have seen this in your Informed Delivery ad, I thought it was interesting, that the Postal Service recently used that to get information out about their response to the COVID-19 pandemic and there was no physical piece to go along with that. In fact, it was sent out on a Sunday feed, at least in my case is when I received the email. They did speak a little bit to that at MTAC. Gary Reblin, in particular, did address that and noted that yes, the Postal Service did use their Informed Delivery program as a result of responding to a request from the CDC, the Center for Disease Control, and used the Informed Delivery to be able to message to those subscribers on what the Postal Service is doing even though there wasn't a physical piece. Now the Postal Service was crystal clear – they are not a digital advertising platform. That's not the direction they're going into. They're absolutely a physical mail delivery platform, but having said that, they'd be open to considering opportunities for some mailers to do a digital feed in Informed Delivery followed up at some point with some kind of a physical mail piece. We don't know the details on that and it's a little bit nebulous at this particular point, but it's an interesting use and it certainly recognizes that now Informed Delivery has reached a level of adoption where it's pretty meaningful in terms of being able to quickly get a message out.
Chris Lien (08:27):
As far as Informed Delivery, they're going to continue to roll out some enhancements to that. In March we had a mail delivery notification pilot. So we're anxiously awaiting to hear what the results are from that. This is a notification that mail has actually been placed into your mailbox. It's going to be based on inferred logical information on where that carrier is based on geo-fencing technology. Package campaigns in May of 2020 – this will allow mailers to do interactive campaigns associated with packages and parcels inside of Informed Delivery. So it starts to bring the packages to Informed Delivery. And then, in May, again, multiple physical addresses for a PO box. This gives people the ability if they've got more than one Informed Delivery account, that sort of creates a single view for all of your accounts for that Informed Delivery. This is very important, of course, for people that maybe have multiple homes or they've got a PO box and they've got a physical address and they're being able to use that in different ways. The Postal Service also touched a little bit on the Informed Addressing program. And again, as a reminder, this is an opportunity where the Postal Service envisions being able to provide to some mailers, a shrouded or an encrypted address. And that address would not be something that was on your original mailing list as sort of an address that you would add into your mailings. Uh, you would get that from the Postal Service, they would put that into the mailstream. You would not know what the actual address is because it's encrypted. But the postal processing technology would be able to read this and then deliver the mailpiece if the end recipient responded to that opportunity, then now that created a way for you to add that individual to your mailing list. So it's an interesting way, again, to leverage some of the information that the Postal Service is collecting through the Informed Delivery program and make that available in the form of a different offer or an opportunity for the mailing industry. So those are just some of the highlights from MTAC. A couple of other things that I want to get into today is, is also about essential businesses.
Chris Lien (10:18):
As I noted at the beginning of the podcast, the United States Postal Service is an essential business. And by way the mailing industry is also essential. But it's really important that we don't take that for granted in a lot of ways. I mean many, many companies are now on hold or, or even out of business, unfortunately. And we're fortunate that this industry is really an essential part of the nation and what we provide in terms of shipping and mailing and communication information can be very vital to keep the country bound together. The communication as well as delivering essential packages and medical, pharmaceutical, things of that nature. So we have to be really, really careful in my opinion, not to take advantage of that situation and use this time not only to further promote the mail, maybe look for ways to increase election and political mail.
Chris Lien (11:03):
And I'm seeing a lot of opportunities with that and a lot of conversations about increasing that. In fact, even on some of the press conferences, either on a gubernatorial level or from the president, there's conversations around using the mail for election purposes, mailing ballots, and stuff. And we've seen a lot of positive things as a result of that prior to this pandemic. So that may be a great growth opportunity for the mailing industry. Again, both for election and political mail, they're very different. If you'd like to know a little bit more about that, you can check out our Guide to Election Mail eBook that's available on BCC Software's webpage. But I think it's really important for us to take advantage of this opportunity too, to look at ways to improve mail automation and three areas in particular that I've been encouraging customers and people in the mailing supply chain to look at.
Chris Lien (11:46):
One, of course is address quality. That's always a really important part when we've got an essential service as the mailing industry, let's be sure that we get all the addresses correct, making every mailpiece count. And the best way to do that is a complete, correct, and current address. And you folks have heard me talk about that on this podcast many, many times. Uh, but that's really essential and it's not just using a postal compliant database. We need to start getting more creative and strategic by surgically applying industry provided data as well. We see a lot of uplift opportunities with postal and industry strategically combined data to be able to do that. Take a look, particularly for solicitation lists where you're trying to reach out to people. There's an opportunity to dig a little bit deeper using again, industry and postal data together strategically to be able to add the secondary address information, the apartment number for example, or to look for change of addresses that were not filed with the Postal Service with a PCOA type of approach.
Chris Lien (12:39):
The second opportunity that I see is workflow automation. Now this is an opportunity to be able to take a look at how can I improve my automated workflows. We'll be optimistic that this economy comes roaring back and mail volume along with it. Are you prepared for that rapid growth? It's unfortunate, but as a result of this COVID-19 there are going to be some small businesses that are not going to be able to reemerge, but yet they were processing mailings. That mail is going to go somewhere. So is your business prepared to take on some of those mailing lists that now need to be processed that maybe somebody else isn't able to provide anymore? So being prepared with an automated workflow, being able to do that goes a long way and it doesn't necessarily mean adding additional software or data. It can also mean just simply revisiting your workflow and being prepared to respond quickly and strategically with that. And that includes having a plan for the Informed Delivery campaign, as I talked about before, that's really growing in terms of adoption and there's some great opportunity to be able to differentiate yourself by being able to offer multichannel marketing capabilities.
Chris Lien (13:43):
The third is education. It's really important to take advantage of this opportunity to, as they say, sharpen the saw and your knowledge of mailing, mail preparation, the rules around that. Certainly understanding the investment you've made in your hardware, your software, the data that helps drive your business. If you don't have employees that are Mailpiece Designed Professional Certified with the Postal Service, now's a great time for them to do that. A lot of people are working from makeshift home offices. There's an opportunity to take some of these certification courses online and it presents a great opportunity now to sharpen your skills, sharpen your knowledge of the mailing industry so that when you do come back to work and this economy comes roaring back again you are well prepared to respond to that as well. Take advantage of some of the free training and education as well. Many of the software providers like BCC Software do offer free training for you to be able to take a look at it and understand better how to use certain parts of the software. Maybe it's a piece of the software or the technology that you haven't used in awhile. Something about an enhanced merge/purge capability or maybe how to leverage the Mail.dat® output a little bit more effectively. Take a look at what's available in terms of recorded videos or express learning sessions. It's a great opportunity right now to sharpen the saw for your business. Get automated workflows in place so that when we turn the corner on this COVID-19 response and we start coming back to work and we start with an economy that comes roaring back (wouldn't that be wonderful?) we're all prepared to do that, and especially that's important as we come into an election year with political and election mail.
Chris Lien (15:10):
I want to thank everyone for tuning into the podcast today. I hope you're all staying safe and healthy, and let's hope that we can continue to make mail essential for everybody in this country. Take care everyone. Have a great day and let us know – how can we help? Thanks.