USPS OIG – USPS can shore up transactional mail

New strategies could be used to ‘shore up’ transactional mail at the US Postal Service (USPS) according to the Office of Inspector General (OIG).

According to OIG: “This paper examines how key and interrelated factors like electronic diversion, demographic changes, the economy, pricing, and evolving security and privacy concerns have affected the growth and decline of transactional mail during the past 15 years, as well as how these factors could affect transactional mail in the future.”

The Transactional Mail segment is the USPS largest segment of First Class mail. The other segment of this is, of course, correspondence mail.

In its Executive Summary, the OIG report explains why “shoring up” transaction mail is so important: “The Postal Service’s largest provider of revenue and contribution, First-Class Mail, is rapidly slipping away. It still generates approximately 40 percent of total revenue and about 50 percent of total contribution, but First-Class Mail’s total volume has declined to 59 billion pieces from a peak of 104 billion in 2001 — a 43 percent decline.”

The paper added: “While it may be impossible for the Postal Service to stop the decline of transactional mail volume, the Postal Service should continue to take efforts to mitigate it. This is essential because even if advertising and parcels grow, First-Class Mail remains vital to the Postal Service’s survival. With transactional mail being the largest component of First-Class Mail, its decline has serious implications for the Postal Service.”

The report advises that “making First-Class Mail relevant for the future will require developing digital and hybrid applications that extend and reinforce the value of the Postal Service’s transactional mail”, adding that “a digital strategy could be pursued in parallel to a hard copy strategy”.