Newspapers and magazines often list a "best and worst"ââÂ of the decade, laying out for readers a reminder of the highs and lows of the past 10 years. It's a similar phenomenon for the postal community. The past few years have been so terrible for the Postal Service that it's hard to remember that we started this decade in a promising fashion. The combined losses in mail volume from 2007-09 were 36 billion mailpieces and a net loss of $11.9 billion. The mandated payments to the Postal Service Retiree Health Benefits Fund have contributed to the heavy net loss, while the recession has spurred the volume decline and corresponding drop in revenue.
The decade actually began on a high note, riding a strong performance in the 1990s, when mail volume grew on average 2.2% per year and Standard Mail was driving the train.
In 2000, Standard Mail grew 5.1% or about 4.5 billion pieces, helping total mail volume top 200 billion pieces for the first time in history.
The terrorist attacks of 2001 and ensuing economic distress hurt all volume growth for two years, but Standard Mail rebounded when the economy bounced back in 2003.
In 2004 and 2005, Standard Mail volumes grew by 5.6% each year, and total mail volume had steady growth, too, due in no small part to rate stability.
There was no rate increase for four years (2001-2005) because the Postal Service benefited from a return of funds it had been overpaying to one of its retirement accounts.
Net income in those middle years of the 2000s was positive, and revenues were growing at a steady clip. Perhaps most interesting was the role that mail had begun to play in the larger advertising world. Direct mail's slice of the total advertising pie, as measured by advertising expenditures, reached more than 20% in 2005.
Of course, there is also a "worst of" list, and it pretty much centers on the past two years. The lingering recession and an aggressive payment schedule into the Retiree Health Benefits Fund have hammered the Postal Service. Add to this list a meddling Congress that hamstrings the USPS when it tries to consolidate facilities, and you have the recipe for an ongoing crisis into the next decade.
The entire mailing industry is working to avert the crisis. The Postal Service has floated its plan: rework the payment schedule for the Retiree Health Benefits Fund; reduce delivery days; and realign the network to better match resources with workload. The industry has some ideas of its own, as do the unions and other stakeholder groups. The Government Accountability Office will come out with a report on a new business model for the USPS in early spring.
Is there anything we can learn from this review? Are there trends or opportunities the Postal Service can seize upon? The recession has certainly accelerated the trend toward electronic communications, and legislation directed toward the credit card and insurance industries could affect mail use as well.
But I have learned one thing from my years of researching and writing on this industry: Direct mail is remarkably resilient. It is still among the most inexpensive ways to communicate. Response rates remain strong when the message is targeted and relevant, and email tied to a hard copy message has a strong pull.
The question is not whether mail will bounce back, but how high. Most experts agree that mail will rebound over the next year but won't return to previous levels. The challenge is to get the Postal Service back on the path to profitability, a path that might be paved with less volume and fewer facilities and workers.
At year's end, I hope to write a "best-of"ââÂ column that touts volume and revenue growth and strong service performance - with the Postal Service featured as the "comeback player of the year."
Kate Muth is President of Muth Communications, a writing, editing and consulting firm. Contact her at firstname.lastname@example.org.