On “Junk Mail” and the U.S. Economy

I recently read an interesting, though misinformed, opinion piece titled Subsidizing Junk Mail in the Great Recession – and while its inflammatory title gives a good indication of where the author stands, the issue discussed is nevertheless worthy of discussion. In that spirit, then, here is a rebuttal.

Anyone who believes the “Do Not Mail” issue is a “no brainer” should recall the childhood proverb “For Want of a Nail,” with the instructive moral that small actions can lead to dire consequences. Following the author’s recommendation and enacting strict and onerous across-the-board Do Not Mail legislation might seem to some consumers like a simple, painless step; but the consequence would be the demise of the Advertising Mail Industry as we know it.

And the pain would not stop there. Contrary to the worldview of the author and others, the U.S. Postal Service does not subsidize Advertising Mail; rather, thanks to worksharing and mail-processing technology innovations, professional mailers earn their postal rate discounts, and in fact help support a Postal Service that in turn provides a foundational service – and a great economic driver – to the working men and women of America.

To jettison Advertising Mail would be to drive one more nail in the coffin of the already struggling Postal Service and, ultimately, our national economy. The USPS is the nation’s second largest employer (behind Wal Mart), and the mailing industry directly represents nearly 10 percent of the U.S. economic picture. Directly or indirectly, no job or business in this country is unconnected to postal activity. Without mail, as in the proverb, the “kingdom” that is the American way of life would be lost. (See the Mail Moves America website for a deeper perspective on this topic.)

U.S. law mandates that the Postal Service be self sustaining. Rather than tax dollars, it relies on revenue from business mail to provide the universal service we expect. Few of us like TV commercials, but we tolerate them because they mean we get the content for free. It is the same for Advertising Mail.

I am not suggesting the end justifies the means. If I believed the propaganda of special interest groups like the author’s own Forest Ethics organization, I would be the first to sign up. But as is so often the case, the facts contradict the hype.

Ironically, environmentalists opposed to Advertising Mail rely on that channel themselves as a prime way to drive their own fund-raising and promotional ends (while invariably lobbying to ensure they are exempt from any contemplated “Do Not Mail” legislation). In this, they are no doubt compelled by the same indisputable logic that fuels our industry as a whole. Simply put, Advertising Mail works. People do read it and take advantage of the messaging that it conveys. And they would miss it – along with all the benefits it carries – if it were gone.

Move Update: The Law of the Land (and Just Common Sense)

As virtually anyone reading this blog must now realize, this week marks the commencement of strict enforcement of United States Postal Service Move Update regulations on First-Class and Standard Mail jobs alike. The key word in that sentence is “strict,” as in, “This time we mean it!” Legitimate inspection efforts and actual financial penalties await mailing jobs found non-compliant – a big departure from the vague threats and indistinct consequences of the old days.

The USPS has been pushing for better address quality for years, and BCC, while recognizing the burden this new enforcement places on mailers, supports the move as the only logical step our industry can take toward reducing systemic costs and helping to level the competitive playing field. Delivery delays and spiraling postage rates only serve to drive more dollars out of the paper-mail arena. What we need are ways to improve the effectiveness and economy of mail . and fighting the Move Update effort does just the opposite.

BCC customers have heard this message many times before; our BCC Bulletin and User Forums have long featured commentary promoting the proactive virtues of a sound Move Update strategy. Nevertheless, we know that plenty of mailers still are reluctant to embrace this belated New Year’s present from the Post Office.

To that, all I can say is, “How Can We Help?” Give our in-house Data Services team a call at (800) 337-0372. Whether you’re a longtime BCC-equipped mailer or currently working with a competitor, we’ll be happy to talk to you about how a proper Move Update strategy can actually improve your business.

The USPS and Sarbanes-Oxley

I rarely engage in political discussions, but for Public Law 107-204—better known as the Sarbanes-Oxley (SOX) Act—I’ll make an exception. The excessive burden placed by SOX on the Postal Service™ (and consequently on mailers) is just the latest example of a government “cure” that is worse than the disease.
SOX was written with the seemingly noblest of intentions—an effort to show the public that giant corporations would no longer be allowed to abuse loopholes that pad their owners’ pockets at the expense of the rest of us. The merits of the law have been hotly debated since it was enacted in 2002, but one thing seems inarguable: It should never have been applied to the Postal Service, which is not a public company, uses no taxpayer funds and has no investors in need of protection.
And yet the Postal Accountability and Enforcement Act (PAEA) of 2006 shackled the USPS to the most onerous aspects of SOX, with increased government oversight that could not have come at a worse time for the agency. Just when financial circumstances are pushing the USPS more than ever to behave like a customer-focused business, SOX compliance is encouraging it to operate as a bureaucracy.
For instance, SOX has been used to justify tightening Intelligent Mail (IM) barcode requirements, with senior officials suggesting that fast-tracking electronic acceptance is the only way to meet the requirements of the law. But the absence of sufficient experiential data makes it difficult for mailers to properly analyze the risks of implementing the IM barcode. Consequently, mailers are being pressured to quickly transition to Intelligent Mail even as they face a substantial risk by doing so.
Additionally, the USPS has stated that because of SOX they must “lock down” all of their financial systems for six months beginning in March 2010. That includes software for PostalOne!, which is at the heart of Intelligent Mail process. At a time when postal systems must be at their most agile, SOX is actually fostering a lack of flexibility.
The economic downturn and increases in electronic communication certainly deserve some “credit” for the recent decrease in mail volume and USPS revenue losses. But in the bigger picture, mailing itself is becoming an increasingly risky and complicated business with greater workshare burdens placed on the customer without commensurate increases in discount. The Postal Service quest for SOX compliance only increases the confusion and risk to mailers.
In the course of everyday operations, it’s easy to let the blame for postal regulations and chaos rest on the clearly identifiable agency with which we must all work. But it’s important to remember that the USPS is in a vise, too—caught between its Congressional overseers and a user population desperate for relief. The more we can do to work together and be pro-active in times like these, the greater the opportunity for all of us to prosper.

MTAC Week – Address and Barcode Quality

John (Jack) Potter, the Postmaster General, opened up last week’s Mailers’ Technical Advisory Committee meetings with a choice for the industry: improve address and barcode quality or lower expectations on service performance and measurement. A 30 percent tolerance for Intelligent Mail barcodes cannot support a 96% on-time delivery.

Jack also noted that for the third year in a row, the Business Mail Entry Units have been found non-compliant with Sarbanes Oxley (SOX), particularly in the area of postage statements and payments. In response, the USPS is tightening acceptance requirements, including use of the MERLIN devices.

On a brighter note, Jack reaffirmed that there will be no price increases for market dominant products in 2010. While the possibility had existed that rates might still be increased under an exigency case, Jack noted that it would be wrong to do so. Thus, the biggest issue facing USPS next year is not rates, but changing the law to correct the mistakes in over-funding the retiree health care benefits. The USPS is once again projecting a nearly $8 billion loss in 2010.

Intelligent Mail – The USPS will implement support for the Full-Service IM BC rates on November 29, 2009. Along with the price incentives ($0.001 and $0.003 per piece for Standard and First-Class Mail, respectively) comes a much tighter acceptance process.

The BMEU and DMUs now have hand-held scanning devices which can determine IM barcode quality, validate the Mailer ID, validate the Service Type Identifier, and ensure unique serial numbers for both the mailpiece barcode and the Intelligent Container Tag. A sampling of 10 pieces will be performed, taken from three bundles, out of five trays/sacks, on three containers. If two of the container tags fail, or if three pieces fail to pass the Full Service requirements, the entire mailing will lose its Full Service piece discounts as well as the Start The Clock information and the Full Service ACS information. As harsh as this sounds (and is), MTAC members were assured that the USPS will be willing to work with mailers through this process.

The readability tolerance for Intelligent Mail barcodes will increase to 80 percent on November 29, and rise again to a 90 percent threshhold on March 15, 2010. The USPS acknowledged that the industry still has concerns about MERLIN; thus, the USPS will post on RIBBS information about the MERLIN devices, including whether the devices are up and running and that the software is current. The USPS will begin to treat the MERLIN devices just like any of their automation equipment and work to achieve a 96% “up time.” The goal is to have this regularly updated information live on RIBBS (under the Intelligent Mail Latest News heading) by the end of this month.

Move Update – January 4, 2010 is when penalties for non-compliance with Move Update requirements will go into effect. First-Class or Standard mailings that are less than 70 percent compliant will have a 7-cent-per-piece penalty assessed to a prorated portion of the mailing. The prorated amount will be calculated as the sampling error minus the 30 percent threshold. For example, a 100,000 piece mailing with a failure of 40 percent will have 10 percent of the entire mailing (40 minus 30) assessed an additional 7 cents.

Tom Day, USPS Senior Vice President of Intelligent Mail and Address Quality, responded to industry raised concerns about the Inspection Service using Intelligent Mail data to determine non-compliance with Move Update. Tom stated that there were absolutely no direct ties between Move Update and Intelligent Mail. The Inspection Service is looking for patterns of mailing behavior over a long period of time and not a single mailing basis. 

If you are interested in MTAC, or better yet would like your industry association to consider joining MTAC as a contributing member, please check out the MTAC section on RIBBS (http://ribbs.usps.gov). MTAC is a great way to actively direct the future of the mailing industry.

 

The Pros for Co: Why the Industry Is Moving to Comailing

With the current economic situation, businesses are being forced to do more with less, and many mailers in the industry are looking for new opportunities to save. One option mailers are considering to improve efficiency and increase savings is to combine mailings through copalletizing and comailing. 

Copalletization allows mailers to combine separate bundles on pallets – for example, combining multi-titled magazine packages from individual presorts on pallets with common destinations. Combining multiple Periodical titles that would otherwise be prepared in sacks makes it easier to reach palletization and drop ship volumes, and save 1-3% more on origin postage. 

This is not to be confused with comailing, the combining and presorting of two or more titles into a single inducted job. This process allows mailers to eliminate sacks (expensive for mailers to produce and for the Postal Service™ to process) and reduce costs through more efficient processing. Mail that in the past may have been sacked is moved onto pallets and drop-shipped deeper into the mailstream for lower per-piece rates. This leads to more consistent and timely delivery – and as a bonus, mailpieces arrive in better condition thanks to less USPS^® handling. 

Currently, comailing for Standard Mail^® and Periodicals allows mailers to achieve the finest presort level possible for jobs in those classes, while reducing their Outside-County postage. A Mixed Class comail option is also in the pilot phase: This would increase presort discounts by moving pieces to more finely presorted bundles, decrease the use of sacks, and lead to less bundle breakage and improved drop-ship discounts.

If you’re considering adding comailing to your workflow, first examine the makeup of your mailings to see whether the process will work for you. Also, be sure to determine whether your equipment would support comailing; then consider the addressing restrictions, trim size limitations and your in-home delivery dates. (If your operation mails several non-static pieces – as news publications with several last-minute changes, for instance – comailing may not be right for you.)

As the industry moves more toward combining mailings, mailers should evaluate the opportunity to see if it can work for them. For more information on comailing, DMM sections 340 and 707 outline the standards for Standard Mail and Periodical comailing, respectively. BCC Vice President of Software Engineering Bob Schimek will be giving more details about comailing in this blog soon.

Barcode Readability is Looking Up, and So is the Future of Intelligent Mail

The DMM Advisory lit up last week with a not-unexpected announcement regarding Intelligent Mail barcode readability standards: Effective November 30, the 70 percent readability verification threshold will be raised to 80 percent minimum tolerance – on its way to the 90-percent mark, now scheduled to take effect in March 2010.

This shift, set by the Postal Service after hearing recommendations from the Mailers’ Technical Advisory Committee (MTAC), certainly raises the bar on IMB output quality. Fortunately, the USPS reports that “mailers are achieving very good readability scores on MERLIN® for Intelligent Mail barcodes.” In fact, I’d say that’s an understatement: During a recent one-month period, 96 percent of IMB letter mailings submitted to the USPS achieved a MERLIN readability rating of 90 percent or better. (See the full report.)

This bodes well for the long-term acceptance of barcode technology that quite literally has the potential to transform the way we use paper mail. Of course, these favorable results only tell some of the story: The same early adopters who moved first to build Intelligent Mail into their workflows are more likely to have the equipment and the personnel necessary to ensure the smoothest possible transition. As more mailers in all segments move to IMB – spurred on by USPS mandates instead of postal futurism – the quality of printed barcodes will likely be all across the board, especially at first.

This makes a barcode quality tool like BCC’s Mail Verifier Plus an unquestionable asset to any IMB-minded postal professional; but even more importantly, it speaks to the importance of planning ahead. The USPS has made their intentions plain with regard to the necessity of transitioning to Intelligent Mail. They’ve given the industry plenty of time to make the move, and kept barcode readability standards low (relative to POSTNET and PLANET thresholds) to let mailers test their new IMB-equipped systems. But the clock is ticking on this inevitable innovation: If you’ve yet to switch, there may not be a better time than this to do it.

If you’re already a BCC client and you’re contemplating the leap to Intelligent Mail, I encourage you to check the User Forums in BCC’s exclusive Customer Portal to ask questions and receive transition advice from our staff and your peers. If you’re not yet working with BCC but would like advice on creating an Intelligent Mail future, contact one of our Product Specialists and let them know: How Can We Help?

Intelligent Mail Discounts and BCC’s TEM Completion

The USPS^® has invested millions of dollars in the Intelligent Mail^® program to make it the barcode of the future, and for proactive mailers who have already adopted this new technology, the discounts for Full Service Intelligent Mail^® Periodicals, First-Class™ and Standard Mail^® jobs begin on No­vember 29.

If you have been working on integrating Intelligent Mail into your mailings, you already know that there is much more to this program than simply printing a new barcode on your mailpieces. To use Full Service Intelligent Mail and receive the additional postage discounts and free start-the-clock and ACS™ informa­tion, mailers must first complete a series of testing scenarios in the USPS Test Environ­ment for Mailers (TEM).

BCC joined the TEM electronic documentation testing process in May 2009, and became one of the first companies to complete it in June. This makes BCC one of few software vendors to have completed the process and be approved to sub­mit live Mail.dat^® files through Post­alOne!^®. This also means that BCC is better able to serve you and help make the process that much easier for you when you sign up for the TEM to become certified for Full Service Intelligent Mail.

BCC currently has several Intelligent Mail resources available in the BCC Customer Portal. We also offer pre-recorded Express Learning Sessions (select “Recorded Sessions” in the Training Center) to all mailers on PostalOne!, Mail.dat and BCC’s Track N Trace^® OneCode Confirm^® service to help with your Full Service transition. 

The November 29 implementation date for Full Service Intelligent Mail discounts is around the corner, but the full impact of this new program will go far beyond that date. I encourage you to take advantage of BCC’s Intelligent Mail resources and the many benefits of the Intelligent Mail program.

ACUMS 2009 Highlights – Notes from Ithaca

With higher education budgets tightening around the country, the topics covered at the recent Association of College and University Mail Services (ACUMS) conference at Ithaca College included educating campuses on the value of mail, proper mailpiece design and promoting the key functions of the on-campus mail center.

For colleges and universities, education is obviously a driving factor. However, finding accurate information on proper mailpiece addressing, dimension and design and teaching that information on campus can be a challenge. The main resource referenced at ACUMS was the USPS® “PCC Workshops-in-a-Box” program, which is designed to be understood by everyone from a mailing veteran to a part-time college intern.

During the show, many mail center managers commented to me about the recent USPS cost-cutting move to reduce the number of Mailpiece Design Analysts (MDAs) nationwide. MDAs serve as regional postal experts, well versed in the USPS regulations that should be considered when direct mailings are being created; they help mailpiece designers meet the requirements of automated mail and avoid unnecessary postage costs. One MDA I spoke with mentioned that his service area now spans all across upstate New York and down into Pennsylvania—a coverage area so large as to make personal attention and fast responses difficult. Several other ACUMS attendees expressed their concerns over the decrease in MDA availability, and what that could mean for the quality of their mailings going forward.

One way to overcome this lack of MDA accessibility is with an in-house mailpiece quality control tool. MDAs across the country employ a tabletop device called the Envelope Reflectance Meter III (ERM III), which quickly scans a sample mailpiece to determine barcode readability, paper reflectance and opacity, and other criteria that can interfere with a mailing’s MERLIN® acceptance. (The device was highlighted in the “Educating Your Campus” session at ACUMS.) The ERM was developed by BCC’s parent company BÖWE BELL + HOWELL (the creators of MERLIN itself), and is available commercially as the Mail Verifier Plus (MVP). On display at the BCC booth, the MVP drew a lot of interest from mailers concerned about their mailpiece quality and the rising barcode readability standards that will become even more strict in November.

Several attendees also expressed concerns over the declining mail volumes on campuses, and the shift by some campus departments from direct mail to electronic messages for billing and alumni communications. The common theme those schools are experiencing is a lack of response from alumni and an increase in late payments from invoices sent as electronic PDF attachments, rather than traditional direct mail pieces. Faced with those problems, the departments were often forced to mail those pieces anyway.

With mail volumes shrinking and regulations becoming ever more demanding, it was an eye-opening experience discussing with the ACUMS members their concerns for the industry and the challenges they are trying to overcome. As always, I told them to let me know “How Can I Help?”

Postal Leadership Begins Here

In an industry as technologically dependent as ours, there’s simply no substitute for having a “seat at the table” where tomorrow’s innovations are planned and implemented. I’m delighted to share the news that BCC now has not only one seat at that table, but three.

Last week Shawn Baldwin, BCC Director of Programming, was named co-chair of the Mail.XML work group for IDEAlliance, a not-for-profit organization dedicated to advancing core technology with a tremendous impact on postal processes. This has never been more true than with the inception of Intelligent Mail®, the USPS® initative that is already redefining the practical applications of mail—and which all but requires the use of IDEAlliance’s Mail.dat® and Mail.XML protocols to realize its potential in real-world mailing scenarios.

BCC has been well represented in IDEAlliance and other foundational postal-industry organizations for years. The announcement of Shawn’s appointment, for instance, came along with the news that Bob Schimek (BCC Vice President of Software Engineering) and Chris Lien (Executive Vice President) would continue in major advisory roles with that organization. Similarly, our involvement with the Mailers’ Technical Advisory Committee (MTAC) and the Mailing & Fulfillment Service Assosciation (MFSA) has been long and fruitful.

These affiliations help BCC maintain a proper sense of the ever-changing directions taken by our industry, and to offer insights on behalf of our customers that can influence which way that wheel turns. Of course, a primary advantage of heightened industry awareness is in how it helps us develop forward-thinking solutions for our customers. The closer our involvement at this high level, the greater the benefits to users of Mail Manager and other BCC solutions.

I hope you’ll all join me in congratulating Shawn, Bob and Chris on this impressive recognition of their mailing acumen. With stewards like them, the postal industry is in exceptional hands.

From BMC to NDC, the Postal Service realigns to increase efficiency

As you may have heard, the Postal Service is revamping its Bulk Mail Center (BMC) network into a three-tier Network Distribution Center (NDC) system. The process began in the Northeast earlier this year, and has now moved on to the West Coast; look for the transition to be completed by the end of this year.

This transition will ultimately allow the USPS to consolidate the processing of originating mail into fewer sites to increase efficiency, reduce transportation costs and expand the surface transportation reach for more products. The new network will include the following tiers:

• Tier 1: 11 facilities will process and distribute local and destination Standard Mail, periodicals and package services.
• Tier 2: 6 facilities will perform all Tier 1 activities, plus distribution of outgoing Standard Mail, periodicals and package services into the network.
• Tier 3: 4 facilities will perform all Tier 1 and Tier 2 functions while also serving as consolidation points for less-than-load (LTL) volumes from Tier 2 sites.

(This USPS page can shed more light on the NDC transition.)

Why It’s Happening: With the decline in mail volumes, the sheer quantities of mail previously processed at the 21 national BMCs has been significantly diminished. Even prior to the recent economic downturn, mailers were drop-shipping mail directly to delivery units and bypassing BMCs altogether. Network Distribution Centers were created to consolidate the facilities to match workload demands, increase transportation efficiency, and reduce costs.

What It Means For You: Mailers will have to make different separations than they did for the old BMC network, with different labeling. Mail previously destined for processing in the BMCs will have to be palletized and separated between the local NDC service area and outgoing destinations.

There is much confusion regarding separations and the final method that will be used to drive them. At this point the USPS is “requesting” that customers make these separations. In some cases we are seeing the USPS use Customer Supplier Agreements (CSAs) to work with mailers to begin the separations, but prior to agreeing to this, you may want to check out this BCC Blog post on CSAs.

BCC is actively involved with USPS efforts regarding NDCs and how any “required” separations will be implemented. Bob Schimek, Vice President of Software Engineering, is part of a new MTAC Workgroup tasked with Communicating Network Distribution Center (NDC) Origin Separation Requirements. It’s expected to finish its work in February 2010.