Alliance Alert–USPS & Coronavirus, 6/1/20

June 1, 2020

Dear Members & Sponsors of the Alliance of Nonprofit Mailers:

Hello, everyone!  We hope you are doing well!

Volume Improving

Here are the latest weekly volume change numbers from USPS.  As you can see, volumes are getting better in some important categories, notably Marketing Mail and Packages.

USPS Weekly Volume Changes 2020 (week ending)
Product/Category 10-Apr 17-Apr 24-Apr 1-May 8-May 15-May 22-May 29-May
Total Mail -32.00% -29.00% -28.00% -27.00% -32.60% -29.00% -26.90% -25.60%
Flats -36.50% -36.00% -37.40% -30.10% -23.00% -37.40% n/a -34.00%
FCM Single-Piece -16.30% -25.00% -16.60% -21.70% -9.00% -14.80% -10.60% -9.00%
FCM Presort -2.20% -8.00% -2.00% -3.30% -4.40% -8.40% -9.80% -7.00%
Marketing Mail -42.50% -50.00% -43.70% -45.30% -40.00% -38.60% -35.80% -30.00%
Periodicals -17.70% -7.00% -38.70% 10.20% 2.60% -42.00% -16.00% -16.00%
Total Packages 20.70% 29.00% 50.00% 59.40% 64.00% 77.00% 80.00% 72.60%

 

A very important question is how much of the growth in package volume the Postal Service can retain as retail businesses reopen.  Package volume was up 34.9 percent in the month of April, and now 72.6 percent in the latest week.  There are media reports that USPS has been somewhat overwhelmed by the volume of packages it is now delivering.

Cost Matters Too

In addition to the financial results we analyzed last week for the month of April, it is important to consider the following cost data:

April 2020 vs. April 2019
Total Mail & Package Volume  -27.2%
Total Work Hours                        -3.1%
Total Salaries & Benefits            +3.4%

We would expect that a competitive business facing a 27.2 percent drop in total volume would try like heck to reduce its related costs a similar amount.  With over 70 percent of its costs being labor, USPS cut its work hours only 3.1 percent and actually increased its salaries and benefits by 3.4 percent.

We believe that this illustrates that USPS is much more of a government agency than a business.  It also likely related to packages costing more to deliver than letters and flats, and to emergency hiring as COVID-19 caused an increase in sick leave.

In the end, the culture of the Postal Service has always been one of service before budget, especially in times of national crisis or disruption.  And perhaps that is what we want from our public postal system.  But that also means that we cannot depend on it being a totally mailer-funded business-like enterprise.

Best, Steve

Stephen Kearney

executive director

Alliance of Nonprofit Mailers

1211 Connecticut Ave, NW, Suite 610

Washington, DC 20036

Tel: 202-462-5132

Independent voice of nonprofit mailers for 40+ years.

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