I have little doubt that some Congressman will blast the USPS Board of Governors for putting forth relatively small “exigent” (greater-than-inflation) price increases. But the micro-managers on Capitol Hill, who should be focused on getting their own house in order, need to understand why the governors aren’t pushing for more.
I think the Board of Governors is trying to make the best of a bad situation, attempting to satisfy the political pressure for higher prices without scaring away customers. I suspect they understand the dangers of any exigent increase in the context of recent Congressional inaction and downright buffoonery on postal issues.
Being part of an industry (magazine publishing) that opposes any exigent increases, I’m not supposed to say this but I will: Mail-dependent companies could probably stomach a one-time extra price increase of less than 5% if – and this is a big “if” – it were part of a larger move to put the Postal Service onto a sustainable path.
We wouldn’t like it, and we might grumble loudly. But most of us would happily pay a few more percentage points in return for ensuring the long-term health of the postal system. And we would stop putting so much energy into figuring out how to reduce our mail volumes and once again include creative use of the mail in our long-term marketing plans.
That, however, is not what happened yesterday. What we got instead was an exasperated Postal Service whose attempts to right the ship have been scuttled at almost every turn by a do-nothing Congress. Accompanying the announcement are:
- No refund of the billions of dollars the Postal Service overpaid into the federal pension system because of funky accounting.
- No payback of the billions of dollars in interest-free loans USPS has given the federal government under the euphemistic name of prepaid retiree health benefits.
- No real progress on consolidating the Postal Service’s bloated network of post offices.
- A recent reversal of progress on correcting the shamefully slow process of getting postal retirees their full annuity payments, which makes employees afraid to retire and stymies the Postal Service’s move to a smaller, more flexible workforce. (The much-maligned federal bureaucracy was making real headway until – you guessed it – Congress derailed the train of progress by failing to pass a budget, as explained in Budget Cuts Are Delaying USPS and Federal Retiree Payments.
- No action on allowing the Postal Service to start potentially lucrative ventures – even ones that wouldn’t really compete with private enterprise, such as delivering wine and beer.
All of that inaction makes yesterday’s announcement scary for the business mailers that provide the bulk of the Postal Service’s revenue. We can see what’s coming: Congress members will continue nagging the Postal Service to be more businesslike while forcing it to do something very un-businesslike – raising prices in the face of increased competition and declining demand.
What we mailers see is not a one-time price hike but rather the first of many “emergency” increases that will increasingly thrust USPS into a death spiral. Congress will keep blocking meaningful action on the Postal Service. But USPS customers (and employees) will be the ones who are punished.
As the mythical pirate captain told his crew, “The beatings will continue until morale improves.”
Except that, starting yesterday, mail-dependent companies began redoubling their efforts to get off the ship.
Don’t be surprised if more alternative-delivery ventures sprout up to deliver coupons, magazines, product samples, and even catalogs. Or if publications start providing real incentives to switch their subscribers to digital editions.
Don’t be surprised to see more “Go Green, Go Paperless” campaigns as banks and utilities desperately try to slash their mail volumes. (The “Go Green” part of the slogan is, at best, unsubstantiated, unless it refers to the bank’s cash flow and not to the environment.) Getting a large portion of its customers to switch to paper-less billing will look like a growing source of competitive advantage for companies that send a lot of bills.
Even without knowing whether yesterday’s proposal will stand up to litigation, business mailers all over the country are already asking the same questions: How can we reduce our mail volumes enough next year to counteract the price increase? And, longer term, how can we get out of the mail altogether before these price increases get totally out of hand?