Tag: North America

U.S. Postal Service’s proposed rate increases surprise industry

Posted by | Mar 5, 2007 | |

Some mailers and industry stakeholders have expressed alarm following the Postal Regulatory Commission’s recommendation of a rate hike while delivering its opinion on U.S. Postal Service rate increases to the Postal Service’s Governors last week.

Although the average rate increase will be 7.6%, many industry watchers say that number is deceptive. Rather than a straightforward hike, the proposed changes are so complicated this time that in some cases rates could be raised as high as 40%, according to some in the catalog industry.

On Friday, DMA revised the measured reaction to the hike it had conveyed to members earlier in the week with a much stronger response, calling the recommended hike “exorbitant,” “outrageous” and “unexpected.”

DMA President-CEO John A. Greco Jr. claimed that the new increases could cause a serious decline in mail volumes.

Another issue is the need for publishers, fulfillment houses and printers to modify their systems to comply with the new and uniquely complex rate structure. Implementation will take time, but the new rates, if approved, could take effect as early as May. There is some indication that the Postal Service could delay that implementation, especially for periodicals.

The case now shifts back to the Postal Service, which will decide whether to accept or reject the recommendation. The Postal Service’s Governors will be accepting comments on the proposed rates until March 8, and new rates—if approved—could take effect as early as May.

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Chase Drops, Still Tops Direct Mail Volume List

Posted by | Mar 5, 2007 | |

Billions of pieces of mail inundating our mailboxes. Response rates of less than 1%. And yet credit card companies continue to be the single largest industry soliciting new customers through the mail.

In 2006, the average American household received 80 credit card solicitations, according to year-to-year results compiled by Mintel Comperemedia of Chicago.

Offers of rewards, points and cash back helped fuel an increase of 6% in mailed customer acquisition pieces by the more than 150 credit card companies whose direct marketing activity is tracked by Mintel.

From credit card companies alone, American households and businesses received 9.2 billion pieces of mail. Although year to year, Chase showed a decline of 4% in its direct marketing initiatives last year compared to 2005, it still topped the list with 1.7 billion customer acquisition solicitations.

The unit of JP Morgan was followed in descending order by Capital One Bank (1.2 billion), American Express (1 billion), Citibank (98 million) and Bank of America (92 million). Capital One posted a 13% gain over 2005 in its direct-mail volume, representing the largest increase of the top five mailers.

Both Citibank and Bank of America decreased their volume by 2% and 17%, while HSBC and Discover increased their acquisition activity year to year by 25% and 29%, respectively, according to Mintel’s research.

Barclays Bank ranked among the top 10 in mail volume, registering an increase of more than 70% as it stuffed 193 million pieces into American mailboxes.

The volume of posted mail is expected to decrease markedly in the aftermath of an anticipated postal rate increase and the emergence of more e-mail-based marketing initiatives, Roock says.

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U.S. Postal service to improve sorting technology

Posted by | Mar 1, 2007 | |

The Postal Service has moved forward with another initiative to improve its delivery capabilities by awarding Northrop Grumman Systems Corporation an USD 874,639,000 contract to build a sophisticated system that will sort “flats” — large envelopes, magazines, newspapers, catalogs and circulars — in the order in which they are delivered.

Letter carriers today spend a portion of their workday in the “office” manually sorting flat mail, a labor-intensive process. The Flat Sequencing System (FSS) — designed in collaboration with Postal Service engineers — sorts mail in delivery sequence at a rate of 16,500 pieces an hour, helping letter carriers start delivering mail earlier in the day.

“The Flat Sequencing System will enable the Postal Service to provide more efficient service to our business customers, who rely on the mail to advertise, generate revenue, and get information into their customers’ hands as quickly as possible,” said Walt O’Tormey, vice president, Engineering.

A pre-production FSS will be installed and tested in Dulles, Va., in August, and nationwide deployment of 100 systems will begin in summer, 2008.

Last year, the Postal Service delivered 53.2 billion flats, consisting of 8 percent First-Class mail, 17 percent Periodicals, and 75 percent Standard mail.

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Business Week praises UPS

Posted by | Mar 1, 2007 | |

Business Week has included UPS in the Top 10 of its first-ever ranking of “Customer Service Champs.”

In a cover story for the March 5 edition, the magazine ranked UPS No. 1 in the shipping industry and No. 8 overall out of the Top 25 “client-pleasing brands” that stand out as the best providers of customer service.

UPS was cited for its delivery reliability, training of drivers and managers and its embrace of advanced technology to improve efficiency and customer service at the same time.

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