Privatizing the Post Office: the Right Solution?

There have been plenty of ideas bandied about on how to solve the financial problems at the US Postal Service.

should we privatize the usps?Recently, a Bloomberg article from ex-OMB director Peter Orszag (now a vice chairman at Citigroup), suggests that the USPS should go private.

His strongest argument is, by privatizing the Post Office, we remove Congress from the equation. He notes that Congress is unable to manage the USPS since it doesn’t allow USPS managers to make the cuts and raise revenue needed to fix problems.

His argument is compelling, but it’s not necessarily the best answer.

First of all, the Post Office is a service required by the US Constitution. Try making the USPS private, and you’ll need to deal with Article 1, Section 8.

Second, the privatization idea has been used before. It’s been offered as a panacea for everything from schools, to prisons, to highways. But the results are mixed; privatization doesn’t guarantee a better result.

The privatization idea is a red-herring. It’s simply taking us out of one pot of hot water, and putting us into another.

We’ve written about USPS problems in previous posts. An enormous issue, which Orszag did not discuss, is the multi-billion dollar ‘pre-funding’ imposed on the USPS by Congress. Developing a more equitable way for the USPS to save for future expenses would solve most of its financial problems.

The true problem isn’t with the Postal Service. It’s the way we’ve set up Washington.

We’ve set up a system that runs on 100% politics and 0% policy. We allow our federal budgets to be run like shell games — spending future money, papering over current shortages. We have a system designed to protect itself, rather than provide any responsible governance.

The problem isn’t how to fix the USPS. It’s how to fix Washington.

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The Downside to EDDM

It’s no fun being the bearer of bad news, but you should know that EDDM, the US Postal Service’s new local neighborhood discount program, may not be your best choice for your next bulk mailing.

Every Door Direct MailYes, the popular EDDM (Every Door Direct Mail) program has plenty of good things going for it, as we mentioned in our prior post : EDDM: USPS Every Door Direct Mail .

But alas, you should consider some facts before jumping on the EDDM bandwagon for your postcard magnet mailings.  Here are our 4 issues with EDDM:

1) with EDDM there is no name and no address added to your mailing piece. There are plenty of studies that show mailings are more effective if they are personalized for the recipient. Items are more likely to be looked at if they are addressed personally. Without that, your EDDM mail becomes junk mail.

2) EDDM mail is packed into the pile of circulars and other non-addressed mail when its delivered to a mailbox. The pile is considered to be ‘junk mail’ by many. There’s a good chance that, upon arrival, it gets tossed.

3) you need to properly prepare your EDDM items. There’s a USPS site that you’ll need to learn, select from online maps, complete online forms, bundle your EDDM materials with ‘facing slips’ , and deliver your mailing pieces to your local post office.

4) EDDM can cost you more. Sure, the EDDM rate is a low 18 cents per mailing piece. But because EDDM requires a large mailing piece — at least 6-1/8″ x 11″ — the costs for making a postcard magnet go up significantly ($.30 or more). Moreover, these large, plastic laminated postcard magnets need to be shipped to you so you can bring them to your local post office; and freight can add up ($.10 or more).

The good news is that you can solve all these problems by using one of our standard magnet mailers and a saturation mailing list. A saturation list provides addresses for every home or business in a Zip Code or Carrier Route, similar to the coverage you’d get with EDDM. The name and address can be rented for one-time use, for a couple of pennies each. And the post office provides a low rate for saturation, Standard non-automated bulk mailings: about $.23 ea. (as of 6/2015).

When you order your postcard magnets from us at magnetbyMail, we handle the mailing prep for free.  This includes ink jetting the addresses on to each postcard, sorting and bundling your mail, completing the USPS bulk mail forms, using our bulkmail permits, and delivering the mail to the Post Office.

So would you want your postcard magnet to arrive unaddressed, in the middle of the circulars? Or would you rather have it personalized to the recipient and address, delivered as an independent mailing piece, without any hassle on your part, and at far less cost?

We thought you should know.


EDDM: USPS Every Door Direct Mail

If you’ve recently been by a Post Office, or watched a USPS commercial, you’ve probably heard about the new bulk mail program called Every Door Direct Mail (EDDM).

usps eddm every door direct mailNew from the USPS, EDDM is a way for a business to send a mailing piece to all mailing addresses in a particular geographic area for a low cost — 14.5 cents each — and without the need for a list of mailing addresses, or expensive permits.

There are some rules of course.  And since the program is young and the rules are subject to revision, you should visit the USPS EDDM  site to review them firsthand.  Essentially, the USPS EDDM requirements involve quantity, size, layout, selecting from a map and forms.

Here are the EDDM rules:

  • EDDM quantity:  for the EDDM Retail program, you’ll need at least 200 pieces , but no more than 5000, in a single day’s mailing.  You can deliver this size of mailing to the front counter at the Post Office in the neighborhood you’re trying to reach.  (Larger mailings can be delivered to a USPS Business Mail Entry Unit.)
  • EDDM size requirement: your mailing piece must be rectangular and weigh no more than 3.3 oz. It must be larger than 6-1/8″ in height, OR 11-1/2″ in length, OR more than 1/4″ thick.  But it can be no larger than 12″Hx15″L; or more than 3/4″ thick.
  • EDDM layout: the address area needs to located on the top half of the mailing piece.  In this area, you’ll need to print an EDDM Retail postage indicia and a mailing label that includes the phrase:  Local Postal Customer.  There is no name or address added.
  • EDDM maps: you’ll need to use the USPS EDDM map site to pick the neighborhoods where your mail should go.  You can choose to exclude business and/or PO boxes from your mailing.
  • EDDM forms: the same site that helps you map your mail’s route will also provide you the mailing forms you’ll need to take with your mailing to the Post Office.  And you’ll also receive facing slips that you’ll attach to bundles of your mailing pieces.

So there are several benefits of EDDM:

  • low-cost postage
  • no mailing list to purchase
  • no expensive bulk mail permit; and no complicated mail sorting

With EDDM,  local businesses now have a way of sending their messages into their communities in a way that is cheaper and easier than standard bulk mail.

Although the regular postcard magnet mailers we produce at magnetbyMail are too small for the USPS EDDM program, we can customize a mailer that fits your size and budget.  Be sure to use our magnetbyMail contact form to ask for a custom quote for your EDDM project.


How Misinformation is Bad News for USPS

It’s surprising to see all the ‘news analysis’ that spotlights similarities between the financial troubles of the USPS and the US Government as a whole.

The trouble is that most of the analogies just aren’t true.

Yes, it may be true that the US Government does spend more than it receives, has not really made significant cuts to its large workforce, and hasn’t made full use of technology to drive down costs.

But none of those things are true about the US Postal Service.

As discussed in more detail in a previous post, the financial problems of the USPS are tied to a Congressional mandate that requires the USPS to pre-fund its healthcare insurance for future retirees at a draconian rate amounting to $5.5 billion per year.

Why all the misinformation?  By mis-stating that the USPS has more expenses than revenues, the analyst is trying to make an argument that the USPS is bloated or defunct, and needs cuts or face bankruptcy.

But when all the facts are presented, it becomes clear that the problem can be solved by addressing the Congressional mandate.

By ignoring this fact, the analyst draws us to the wrong conclusion.  And deprives us — leaders and voters — of the information that we need to guide us to the right solution.

From my brief look around, I’ve come up with four common arguments that ‘analysts’ make about the USPS financial problems where they conveniently leave out the facts about the Congressional mandate.  The motives for leaving it out could be expedience or ignorance; although, as you might sense in the last argument, politics could also play a role.

Here are those four arguments:

USPS as Microcosm of US Government

“Both USPS and the federal government have failed to adapt to changing times. The explosion of affordable information technology and Web-based communication tools have revolutionized the private sector, boosting productivity and allowing for leaner, more dynamic organizations. But the labor-intensive Postal Service business model has changed little over the decades, and the federal government shows a similar unwillingness to change how it does business.”  Postal Service problems a microcosm of entire government (3/18/2012: Federal Times)

The Federal Times article above is a good example of ‘news analysis’ that uses the “USPS/US-Govt” analogy but mis-states the facts along the way.  Not only does it not mention the Congressional mandate, it is plain wrong about USPS technology development and workforce trends.   Fact is the USPS is a leader in updating its facilities with computers and automation; and it has been steadily downsizing its workforce for years.

A Demand Problem

“In a time where instant messaging, texting, and email allow us to communicate across the globe in a matter of seconds, the idea of sitting down to write a letter seems foreign to many. And the USPS is feeling the heat, so much so that it is headed for default later this year unless Congress lends a helping hand.”  U.S. Postal Service nearing bankruptcy as email asserts its dominance (9/2011: Yahoo Technology Blog)

The Yahoo article also glosses over the facts to make its point (‘alas, tech beats the USPS’).

Yes, we now communicate electronically and this has impacted USPS revenue.  But the USPS has addressed those issues by driving down its costs proportionally.  The missed fact is the Congressional mandate, and that $5.5 billion item makes all the difference.

A Labor Problem

“During the past four years, the (postal) service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20 percent.”  Postal Service proposes cutting 120,000 jobs, pulling out of health-care plan (8/11/2011: Washington Post)

Even the venerable Washington Post published this article that neglected to mention the Congressional mandate.  Instead, it painted USPS financial woes based on unyielding labor unions.

The Bailout

“Americans deserve an efficient USPS that delivers for decades. But misguided action – or none at all – could saddle taxpayers with a multi-billion dollar bailout for the Postal Service. The clock is ticking…”   Saving the Postal Service (US Congress -Committee on Oversight and Government Reform)

Unfortunately, even Congress is providing us with misinformation on their Saving the Postal Service website.  Some in Congress have failed to admit that the Congressional mandate was misguided.  In fact, they’ve taken the position that reworking the mandate would be akin to a government bailout.

The analogy?  Let’s say that Congress writes a law that makes you pay 25 years of tax payments over the next 5 years.  Then, say you’re having trouble making those payments.  You go before Congress to ask for help, and they call this “saddling taxpayers with a bailout.”

Restructuring the Congressional $5.5 billion per year mandate is the responsible thing to do.

Calling the mandate a ‘bailout’ is simply a way to create excitement and get voters to look your way.  It’s doubly pernicious when Congress itself is a big source of the problem.

Yes, the USPS is confronting a bunch of challenges.  Revenue has dropped and so, expenses need to continue to drop as well.

But we as American citizens, or at least as USPS customers, need to understand the facts before we develop our opinions.  When we get our facts from biased sources,  we’ll probably arrive at biased solutions that don’t solve our problems, and are more likely to make things worse.

And here is where an analogy does exist between USPS problems and our US Government’s problems:

There are undoubtedly some tough conversations ahead as we American citizens write our country’s next chapters.  We need to become very good at understanding the big picture so that we aren’t easily misinformed, and misdirected, by those with a narrow interest.

Misinformation is a problem for the USPS simply because it could lead to a bad solution.  At a time when we Americans can’t afford any more of those.


New Postage Rates for USPS in 2012

Well, the USPS will raise postage rates in 2012.

For first class mail, the new USPS postcard rate is 32 cents  (up 3 cents) and the new USPS letter rate is 45 cents for 1st ounce (up 1 cent).

For discounted USPS bulk mail, new rates are also going up an average of 2% or so.

The new rates take effect January 22, 2012.

None of the increase should be a surprise, considering rising fuel costs and some very high (multi billion dollar) payments demanded by Congress.

The rate increases are capped by law — they cannot exceed the rate of inflation.   The last time prices went up was May 2009.

So what will the impact be on the postage costs for our postcard magnets at magnetbyMail.com ?   Our rate for First Class Bulk mail will be 43 cents, Standard Third Class Bulk at 28 cents, and Non Profit Bulk at 20 cents.  (Note- our postcard magnets are not considered automation compatible mail.)


Who Invented the Postcard?

Well, its not easy to know precisely, but many historians ascribe the earliest picture postcard to a Brit — Theodore Hook  — who mailed the card to himself in 1840.

Hook, a prolific writer in his day (1788- 1841) was considered to be a man of letters, although his most enduring legacy may have been the invention of the postcard.

It’s a humorous irony that might not have been lost on Hook himself, who was also known for his tomfoolery and pranks (more about this below).

invented postcard

The first picture postcard, invented by Theodore Hook in 1840. (BBC)

The postcard he created, likely as a joke, included a caricature of post office workers around a gigantic ink well.  The reverse side included Hook’s address at Fulham in London, and a Penny Black stamp in the upper right corner.

Among Hook’s other achievements was the Berners Street Hoax, based on his bet that he could turn any house in London into the most talked-about address within a week’s time.

Hook busied himself by sending thousands of letters (not postcards) and invitations in the name of Mrs. Tottenham who resided at 54 Berners Street.

On November 27, Berners Street became packed with chimney sweeps, delivery carts, cake makers, doctors, lawyers and priests.  Several pianos and organs were delivered.  And many dignitaries arrived, including the Duke of York, the Governor of the Bank of England, the Lord Mayor of the City of London, and the Archbishop of Canterbury.  By day’s end, hundreds had made their way to 54 Berners Street, much of London became frozen in gridlock and Hook won his bet.

Alas, the postcard received its start from such notoriously enveloped beginnings.

But since we’re in the postcard business ourselves, we like to think of Mr. Hook’s invention as an example of man’s can-do, creative spirit.   Even today, the postcard fulfills its purpose: when you have something big to say, but don’t want to spend a lot to say it.

So, thank you Mr. Hook.

We make thousands of postcards everyday.  They’re made with magnets attached, and sent to a mailing list that our customers provide.  Please feel free to visit our postcard magnets website at magnetbyMail.com .


What Is the Size of a Postcard in USA?

The size of a postcard is 4-1/4 inches high by 6 inches wide, maximum, to be eligible for First Class Mail postcard rate by the USPS.

what is the size of a postcardAny larger, and the USPS will call your mail a letter or flat, and charge a higher rate.

For the USPS, minimum postcard size is:  3-1/2″H  x 5″W.

Also, the USPS requires that postcards be a thickness of 0.007 inches, minimum; and 0.016 inches maximum.

Lastly, the mailing piece needs to be rectangular.

It makes sense to design your postcard to meet the USPS standards.  The First Class Mail postcard is given a very low rate by the USPS, and receives all the benefits of First Class mail, including mail forwarding and return if addressee not found.

A footnote — please note that our Postcard Magnets at magnetbyMail.com are not mailed using US First Class postcard postage.  Instead we mail most using rates based on bulk mail.  For more info about direct mail campaigns with magnet mailers, check us out at magnetbyMail.com  .  Or drop us a postcard!