Postal Reform Passes: What It Means for Direct Mail - Mailing (2024)

Industry, Mailing, USPS, Postal Regulations

By Paul Bobnak | March 9, 2022

Postal Reform Passes: What It Means for Direct Mail - Mailing (1)

Overview

The U.S. Senate passed the most significant postal reform bill in 16 years on March 8. Making changes that promise to put the U.S. Postal Service (USPS) on a better financial footing, the Postal Service Reform Act is expected to be signed into law by President Joe Biden.

Summary

USPS reform has been sorely needed since the last big reform measure was passed way back in 2006. Providing relief to burdensome requirements should help lay the groundwork for other needed changes.

Reporting

From Federal News Network:

[Michigan Senator Gary] Peters, however, said the final version of the bill reflects compromises from all sides, and only includes USPS reforms that have been “overdue for over a decade.”

“This bill is limited to absolutely essential consensus, bipartisan reforms that are necessary to ensure that the Postal Service can survive and can continue delivering for the American people. Everything in this bill has bipartisan agreement,” Peters said.

Our Point of View

Postal reform has been the proverbial can kicked down the road since 2006, when the Postal Accountability and Enhancement Act was passed during a lame-duck Congressional session. It saddled USPS with a mandate to prefund its retiree health costs 75 years in advance. No other federal agency has had a similar requirement.

With the prefunding now gone, what does this overhaul mean for marketers?

Not much. But, let’s see what we’ve got.

1. Prefunding Burden Gone

Members of Congress in both parties (as well as industry stakeholders) have long said that reform had to include ending the prepayment requirement. So, chalk one one up for finally doing the right thing after so many logjams over postal policy.

Congress can continue to do the right thing by confirming the president’s nominees for the two open spots on the USPS Board of Governors, bringing it back up to the full strength needed to help guide the agency.

2. Saving Some Money

Requiring future retirees to enroll in Medicare will save USPS $50 billion over 10 years. The missed prefunding payments have been wiped off the balance sheets, and the benefits will now be pay-as-you-go.

That’s not nothing. Just a few years ago, USPS was actually running an operating profit minus the prefunding requirement. Changing the narrative about the postal service is a positive thing. Let’s make sure marketers know about it when presented with every opportunity to jump into direct mail.

3. Six-Day Delivery Preserved

Six-day-a-week delivery is still required; efforts by USPS management over the years to end Saturday mail delivery has always run into stiff opposition from Congress. But with an emphasis on package delivery and shrinking volumes of First Class and Marketing Mail, this one may have to be revisited and adjusted.

4. New Delivery Time Dashboard

USPS must create an online dashboard showing delivery time data. This isn’t a terrible idea, though keep a grain of salt handy. Last year, USPS relaxed its service standards that extended guaranteed First Class delivery dates from three days to five days. Some of this change was to account for mail being shipped now by trucks instead of planes over long distances. Has it saved money as promised? And because those figures are based only on mail scanned on entry to the system, how reliable are they as an indicator of USPS performance?

5. Non-Postal Services Boosted

Though postal banking hasn’t been revived, USPS can now offer state and local government services at post offices. For underserved consumers (especially in rural communities) as well as solopreneurs, there are opportunities for USPS to be one-stop shopping.

Wrapping it up

The passage of the Postal Service Reform Act of 2022 is an example of when doing something really is better than doing nothing. Let’s pat ourselves on the back for taking a step as an industry to correct one mistake.

But this should be only the beginning of reaching a national consensus on the kind of postal system we want for our country’s future. Let’s build on this victory to tackle more, bigger challenges in the system.

This is also a good time for marketers, especially large mailers, to get more engaged with USPS at the local level. Joining your regional Postal Customer Council (PCC) gives you visibility to postal authorities and keeps you informed of service issues and opportunities in your area. And in this election year, let lawmakers and candidates know what your position is on additional changes to post office operations.

At mailing.com, we’ve had a long-time partnership with USPS. With in-house USPS staff and our track-and-trace solution, you can always be sure that your mail will meet service standards and be delivered as soon as possible to your prospects and customers. Please reach out to us! We’d love to show you how you can put today’s direct mail to work in your next campaign.

Postal Reform Passes: What It Means for Direct Mail - Mailing (2024)

FAQs

What does the postal Reform Act mean for postal workers? ›

A: The bill has four primary pillars:1) ending the crippling retiree health benefit pre-funding mandate, 2) providing for prospective Medicare integration, 3) adding transparency to USPS service issues, and 4) guaranteeing six-day delivery. Q2: Does the bill have bi-partisan support? A: Yes.

How will postal reform affect retirees? ›

It creates a Postal Service Health Benefit program within the Federal Employees Health Benefits (FEHB) program. It also requires most new retirees from USPS and their families to enroll in Medicare Part B when they are eligible in order to keep their retiree health coverage. These changes will start in 2025.

What are the new postal changes? ›

Priority Mail® services will increase approximately 5.7% overall for Commercial (online postage) in 2024, with rates starting at $7.90 (previously $7.64). Priority Mail Express® services will increase approximately 5.9% overall for Commercial (online postage) in 2024, with rates starting at $26.35 (previously $24.90).

What is direct mail USPS? ›

You simply select the neighborhoods you want to target, and a Letter Carrier takes your mailpiece to every address while delivering the day's mail. You don't need to know names or street addresses. Mailpieces can be addressed to “Local Postal Customer.” Other benefits: • Low per-piece postage rates.

What are the changes for the USPS in 2024? ›

On April 9, 2024, the United States Postal Service® filed notice with the Postal Regulatory Commission (PRC) of Mailing Services price changes to take effect July 14, 2024. The new rates include a 5-cent increase in the price of a First-Class Mail Forever stamp from 68 cents to 73 cents.

What is the USPS 2024 mandate? ›

Come June 30, 2024, all postage meters that do not meet the USPS IMI-compliance standards will be decertified. If your current postage meter is an Information Based Indicia (IBI) device, it will need to be replaced with one that is IMI-compliant.

What is the average pension for a US postal worker? ›

The amount of money a postal worker makes in retirement depends on their age and how long they worked as a postal worker or government employee. A postal worker who retired in 2023 with 25 years of service would make a monthly basic annuity between $1,447-$1,478.

Can retired postal workers collect Social Security? ›

The Federal Employee Retirement System (FERS), which covers all workers hired after 1984. Though FERS pays a smaller monthly benefit than CSRS, FERS retirees also receive Social Security and Thrift Savings Plan payments.

How much will my postal pension be? ›

The benefit is calculated as 1% times your high-3 years average salary times the years and months of service.

Will there be a postage increase in July 2024? ›

WASHINGTON, DC — Today, the U. S. Postal Service filed notice with the Postal Regulatory Commission of mailing services price changes to take effect July 14, 2024. The new rates include a 5-cent increase in the price of a First-Class Mail Forever stamp from 68 cents to 73 cents. Letters (1 oz.)

What is the new contract for the post office in 2024? ›

The letter contract, which was issued on April 1, 2024, calls for a five-and-a-half -year minimum base term. Implementation of the new contract is scheduled to begin on Sept. 30, 2024. The Postal Service's decade-old contracts for air cargo services will expire later this year.

Why is the mail so slow in 2024? ›

The delays appear to largely stem from a new system the Postal Service began rolling out last fall that will eventually funnel all the nation's letters and packages through a consolidated network of 60 regional distribution centers — similar to the airlines' hub-and-spoke model.

Does direct mail work anymore? ›

If you believe direct mail is outdated or unused, think again. In 2021, direct mail volumes surpassed pre-pandemic levels, and the latest IPA Bellweather report shows mail investments continue to increase in 2023. If you have not mailed yet, now is a great time to test the channel!

Why should I use direct mail? ›

Direct mail can serve as a quick way to reach homeowners and others who may be interested in your services, reaching the right demographics based on specific segmentation criteria. There's almost no limit to the extent of outreach you can achieve with direct mail over other types of marketing efforts.

What are the two types of direct mail? ›

The types of direct mail are: Catalogs. Postcards. Letters and Envelopes.

Why are postal workers not considered federal employees? ›

USPS positions are not traditional federal jobs since the USPS is not a federal agency (it is considered a quasi-government agency). There are more than 30,000 USPS facilitate across the country, 500,000+ employees, and good benefits such as health insurance, good pay, and a pension plan.

Did the USPS Fairness Act pass? ›

The act was first introduced on May 11, 2021, by Representative Carolyn Maloney (D-NY). The House of Representatives then passed the bill by 342–92 on February 8, 2022. On March 8, 2022, the Senate voted 79–19 to pass the bill.

Is the Postal Service going to offer an early out? ›

"The Office of Personnel Management (OPM) has approved the Postal Service s request to offer voluntary early retirement to eligible APWU-represented employees in those categories that management had excluded from last year s early outs."

Do US postal workers get social security benefits? ›

Newly hired postal employees are covered under Social Security and Medicare. The Postal Service offers coverage through the Federal Employees' Group Life Insurance (FEGLI) Program. The cost of Basic coverage is fully paid by the Postal Service, with the option to purchase additional coverage through payroll deductions.

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