The U.S. Postal Service's recent Summer Sale on Standard Class mail boosted catalog volume, according to a major paper company executive.
Richard D. Willett Jr., President and CEO of NewPage, cited the program as a significant factor in the recently improved outlook for coated paper.
“Several of our catalog customers took advantage of discounted rates on incremental volumes and increased their Third Quarter mailing volumes by more than 20 percent over prior budgets,” he said in a presentation to analysts on Tuesday. He also applauded USPS's recent decision to freeze postage rates in 2010, saying that would help demand improve.
Willett didn't indicate how much additional volume the Summer Sale caused for NewPage, which is North America's largest maker of coated paper. But with the company selling 708,000 tons of coated paper during the quarter, the Summer Sale would have had to generate millions of additional catalogs for NewPage customers for the program even to show up on the company's radar screen.
The Summer Sale, which offered discounts of up to 30% on incremental volumes of Standard mail, was not approved until early June, which most eligible mailers indicated was not enough time for them to plan and implement additional mailings. An exception was L.L. Bean, which said publicly the sale would cause it to mail an additional 10 million catalogs but agreed that the program was announced too late to have maximum impact.
A Postal Service Experiment
The sale was something of an experiment to test mailer response to temporary pricing incentives and the Postal Service's ability to administer them. USPS subsequently introduced a Fall Sale on First Class mail and has talked about a possible Winter Sale on the Standard class for early next year.
One lesson the Summer Sale taught postal executives is that it lacked good data on the mail volumes of its largest customers. Some mailers have multiple permits, sometimes under different names, and relying on vendors' mail permits is not uncommon.
Mailers had to use their own mailing permit to earn the Summer Sale discounts. That limited co-mailing and commingling of various companies' mail pieces because with Standard mail (unlike Periodicals) only a single permit can be used for a mailstream.
USPS has told Summer Sale participants that their discounts will be calculated and paid into their accounts late this month or perhaps early December.