As Part 1 of the Mailing Systems Technology Annual Wage & Operations Survey Results revealed, bioterrorism and the weakened economy have taken their tolls on our industry. Mail volumes have dropped, wage increases have slowed, more staff reductions have been taken than anticipated, and new hires have been hard to attract. While there was disheartening news in the wage analysis of the survey, there were also some bright spots. All the attention drawn to the mailing industry through the bio-terror threats has garnered more safety and security improvements and brought, overall, more attention to mail centers.
In Part 2 of our survey results, we turn our attention to the operations side of the mail center in addition to mailing managers' opinions on the U.S. Postal Service. Again, I want to thank those who took time to fill out the Wage & Operations Survey last spring because only with your commitment can we provide the detailed analysis that can help you benchmark your operation to an industry standard. Our response rate was down from previous years; no doubt due to the hardships that each mail center has been facing. Yet we were able to analyze over 370 mail centers across the nation; from the lowest volume survey respondent processing 10,000 pieces per month to our highest volume mailer at 700 million pieces a year; including First Class, Periodical, Standard and parcel operations; and from all business types. Mail center operations vary based on factors such as volume, class of mail and business structure, but there is a commonality to all assuring that business communications make it to their intended destinations on time and at the least possible cost. Let's see how mail centers stand up and what impact the Internet is having on operations.
Driving Down Costs
With back-to-back rate increases, mail managers have been challenged to lower operational costs to offset the higher postage costs. As the charts on the next page reveal, managers have used many tools to help reduce costs. The most effective tools have been to be accountable through tracking productivity and cost as well as automating staff scheduling, combining print-mail operations and empowering staff through training and certification. However, not enough managers are taking advantage of these opportunities. Less than half of mail-center managers automate scheduling, combine print-mail functions and, most · importantly, track cost per piece. The only function more than half of managers have undertaken is tracking productivity. The cost of processing each piece of mail will continue to become more critical as postage hikes continue and more documents are considered for electronic delivery and head for the Internet.
In operations that have moved some marketing pieces to the Internet, businesses are already realizing a lower cost per piece (37.), while those who have not taken advantage of marketing over the Internet have a per piece cost of 50.. Overall, the average cost per piece for all survey respondents is 47.. Volume differences range from 52. per piece for centers processing less than 3.6 million a year, 30. for those processing from 3.6 to 6 million, 27. for those processing from 6 to 12 million, and 25. for the highest volume centers processing in excess of 12 million a year.
The Internet and Its Effects
Overall, 43% of survey respondents have online marketing programs and 19% have online billing. Transaction mailers (insurance, financial, utilities, communications and healthcare) are the most likely to have moved marketing and billing online, followed by educational institutions and manufacturers/ wholesalers. Least likely to move documents to the Internet are lettershops and printers. Company size, rather than mail volume (which is indicative of the number of documents produced) determines which companies are more likely to move to online billing; the more employees in a company, the more likely they are to have Internet billing. Online marketing, on the other hand, is predicated neither on volume nor on company size.
Thirty-seven percent of managers responded that the Internet has affected volume. For the first time in the history of this survey, the majority of those respondents affected by the Internet regardless of business type, mail volume or class of mail are processing less volume due to the Internet. Overall, the decrease in mail volume averages 15%. Those hit hardest (over the average of 15%) are Standard mailers from educational institutions along with retailers and transportation companies who are processing mid-volume levels of mail. As companies move more and more documents to the Internet and as more and more households go online, mail volumes will continue to drop.
The Weakened Economy
The state of the economy and the effects of · rate hikes have left managers with less personnel to process mail. Centers processing volumes up to 3.6 million a year have lost the equivalent of a part-time worker from 2001 to 2002. Higher volume mailers have been hit harder; for example, those processing six to 12 million mailpieces reduced their workforces by 21/2 workers.
The economy also seems to have affected mail center investments. Last year, we noted a robust attitude about spending where managers were branching out from the typical mail center investments and buying more peripheral equipment. This year, mailers are back to their more traditional buying habits. At the top of lower-volume mailers' lists are inserters (28% of survey respondents plan to purchase), followed by printers (24%), software (24%), computers (23%) and meters (22%). Mid-volume mailers listed printers (62%) as their top choice, then software (31%), meters (31%), inserters (25%) and computers (19%). A majority of high-volume mailers who plan to purchase will buy operations software (65%), printers (23%), inserters (22%), computers (22%) and mailing software (19%). Another notable difference from previous years' survey results is managers plan to invest less this year in computers and more in mail-related hardware/software. ·
Bioterrorism, Rate Hikes, Reform Defeat
The Postal Service has gone through a number of challenges in the past year, from bioterrorism to rate hikes to defeat of Postal reform legislation. Those working most closely with the Postal Service mailing managers have kept a positive attitude toward it. Those managers who noted that the bio-threat had a positive impact on their operations were most likely to give the Postal Service an excellent rating for performance. Those who felt a negative impact seemed to lay the blame on the Postal Service and gave it the lowest ratings (29% gave the Postal Service a fair to poor performance rating, compared to only 11% for those who felt a positive affect).
Although this survey was conducted prior to the defeat of Postal reform legislation, those managers who believed Congress should pass the legislation rated the Postal Service's performance not as good as those who did not want Postal reform. Twenty-three percent of those who supported reform judged the Postal Service's performance as fair to poor, in contrast to only 11% who didn't support reform.
A Call for Reform
The number of mailers who are calling for Postal reform continues to escalate from 65% in 2001 to 75% this year. Even though Postal reform legislation was defeated this spring, the industry can expect a continual push toward reform. Printers (93% of whom want reform) will most likely be leading the charge. But they are followed closely by all other businesses. Manufacturers are the least likely to want reform; yet 72% of them favor reform.
Your Input Counts
This wraps up the 2002 survey with, by far, the most enlightening results we have seen in the 13 years Mailing Systems Technology has conducted this survey. Please watch for the 2003 Annual Wage & Operations Survey that will be attached to your copy of Mailing Systems Technology next spring. Your responses will help us to continue to bring you the trends in the industry so that you continue to gain knowledge and improve your operations. If there are topics that we have not covered in this year's results that you would like us to consider for next year, visit www.mailingsystemsmag.com and go to the "Talk to Us" page, e-mail our editor at dorourke@chorus.net or call me, Marll Thiede, at 800-536-1992.
