Links to the resources mentioned in the podcast.
On today’s podcast, I discuss the recent USPS Board of Governors meeting, temporary package price increases for the holidays, and some recent changes to the MTAC charter.
Welcome to the podcast! On August 5 and 6, the USPS Board of Governors held meetings with the meeting on the 5th being a closed-door meeting and the meeting on August 6th being the public meeting, though due to COVID was done so via online. If you have time to listen to the recording of the meeting on the 6th, I highly recommend it. This is the first time in over ten years that a fully constituted USPS Board of Governors has met.
PMG Louis DeJoy remarked in this opening statement that the USPS is laser focused on their Delivering for America plan, which they rolled out in March of this year, and was discussed on a prior podcast. PMG DeJoy stated that while the plan isn’t perfect, it can become perfected with the help of customers, Congress, union leadership, and other stakeholders. And while open to input from others, the USPS is moving forward with their plan including changes to service standards.
You can tell from the tonality of the meeting that there were likely some spirited discussions during the closed-door meeting on the 5th. Governor Ron Stroman, former Deputy PMG and one of the three new governors nominated by President Biden and confirmed by the Senate a few months ago, is clearly against the USPS moving forward with changes to First-Class Mail standards. In fact he stated during his opening statement in the public meeting that “…intentionally slowing First-Class Mail and package delivery by changing service standards, is strategically ill-conceived, creates dangerous risks that are not justified by the relatively low financial return, and doesn’t meet our responsibility as an essential part of America’s critical infrastructure.” He further noted that intentionally slowing First-Class Mail when combined with one of the largest price increases in over a decade will only accelerate the shift of physical mail to a digital alternative. Finally, Governor Stroman noted that these service standard changes will disproportionately impact certain areas of the country including Florida, Texas, Maine, California, and central regions of our country. The goal now, he said, is for the USPS is to achieve a 95% on-time performance for these new standards to all parts of the country as soon as possible.
USPS CFO Joe Corbet then provided a brief recap of the June YTD revenue for the first 9 months of the USPS fiscal year. Mail volume overall was down half a billion pieces, including Marketing Mail if you factor out the 2020 elections. While mail volume was down, shipping and packages were up significantly and resulted in a 20% increase in fiscal YTD revenue, which equated to $4 billion.
CTO Scott Bombaugh then reported service performance and unfortunately First-Class Mail is slightly below last year’s performance levels, but fortunately Marketing Mail is slightly better. During the week of July 7 through the 23, Marketing Mail reached its highest performance in five years at 93.7%
Finally, Chairman Bloom announced that the BOG will be forming an Election Mail Committee similar to what was formed during the 2020 elections. Governor Moak has agreed to chair the committee again and will be joined by governor Bloom, governor Duncan, and governor McReynolds. Amber McReynolds is a leading expert on election administration and policy. Her professional career has been focused on strengthening democratic institutions with a goal of improving the voting experience for all. She is the Founding CEO of the National Vote at Home Institute, a non-partisan non-profit dedicated to expanding and improving vote-by-mail systems in all fifty states.
Not discussed during the public meeting, but certainly discussed and approved in the meeting on August 5 was a decision to implement a temporary package surcharge again just in time for the holiday mailing season. This was done last year and went into effect from October 18 to December 27 with temporary price increases of 25 to 40 cents for certain parcel select and priority mail rates.
This year’s temporary package price increase goes into effect from October 3 through December 26 and has a much higher price increase. Priority Mail, Priority Mail Express, Parcel Select Ground and USPS Retail Ground have increases ranging from under a dollar for less than 11 pounds, and up to $5.00 for 21-to-70-pound parcels at zones 5 to 9. And this year’s price increase applies to both commercial and retail.
It is worth noting that this is the third price increase in less than 12 months and for software providers like BCC, it means four major releases within a year. That is a cadence that makes it very difficult to provide non-regulatory enhancements. And speaking of providing regulatory updates, we just finished posting our software updates to support the August 29 price increases. We had hoped to have these done earlier, but there were some delays in getting answers from the USPS clarifying sortation changes.
Finally, I wanted to update you all on some recent changes to the MTAC Charter. The Charter, which is posted on PostalPro, now states that the MTAC Executive Committee has eight members, but only seven of them have voting authority. We still have an industry chair, industry vice-chair, and immediate past chair. But the USPS now has the USPS co-chair, which is the Chief Customer &Marketing Officer, or another postal officer if the PMG or DPMG choose to do so. The USPS Co-Chair then appoints three postal vice-chairs and an MTAC Program Manager.
The MTAC Charter also states that MTAC members employed by competitors of the USPS for market competitive products may not serve on the MTAC Executive Committee and also may not serve as a focus area or mail shape leader. I am not too surprised that the USPS moved forward with this last clarification, especially given the criticality of packages for their Delivering for America plan. This is an MTAC election year for mail class and shape leaders with elections scheduled to take place in the November MTAC meetings.
Thank you for listening to today’s podcast, and if you’d like to learn more about mail tracking, or how to better automate your mailing workflows, please visit us at BCC Software.com or give us a call. As always, we’d like to know “How can we help?” Thank you for listening to the podcast and have a great day!