Chapter 2: Our Customers
Standard Mail pricing has been a catalyst to the emergence of a competitive direct mail industry. Various market developments have contributed to continued growth, including the Do Not Call Registry established in 2003, the Anti-Spam Act of 2003, and increased consumer expectations for targeted and personalized messaging. Direct mail, as a percentage of advertising spending, has seen consistent growth in recent years. Its share of total advertising expenditures is projected to be 21.6 percent in calendar year 2008.
The May 12 pricing changes for Standard Mail limited the increases for catalogs after a substantial increase the previous year. The May 12 changes also continued the shape-based pricing strategy for parcels, continued to recognize the market characteristics of higher density advertising, reduced the role of weight in price, and recognized the advent of the Flats Sequencing System.
Periodicals
Periodicals include magazines, newspapers, and other publications whose primary purpose is the transmission of information to an established list of subscribers or requesters. Publications must meet qualifying criteria established by law and specified in the Domestic Mail Manual. Periodicals mailed by qualifying nonprofit organizations and those mailed within their county of publication (primarily local newspapers) pay reduced prices.
Periodicals revenue in 2008 was $2.3 billion, with a volume of 8.6 billion pieces. Total Periodicals revenue increased 4.9 percent and volume decreased 2.2 percent.
The May 12 pricing changes for Periodicals introduced a 5 percent discount off the total Outside-County postage for qualifying issues of Periodicals publications having a limited circulation.
Periodicals volume has continued to decline as other media channels have increased and publications frequencies have decreased. Businesses and consumers increasingly rely on the Internet as a substitute for hardcopy publication of news, information, and entertainment. To help maintain the affordability of this product, the Postal Service has focused pricing and product innovations on reducing the number of postal handlings and increasing the entry of Periodicals closer to destination.
Package Services
Package Services is composed of Single-Piece Parcel Post, Bound Printed Matter, Media Mail, and Library Mail. These products can be used to send mailable items weighing up to 70 pounds (except Bound Printed Matter, which has a maximum weight limit of 15 pounds) not required to be sent as First-Class Mail, prepared as Customized Market Mail, or entered as Periodicals.
Single-piece Parcel Post may be used by any customer to mail parcels. Parcel Post is generally the most economical postal and nonpostal shipping service for parcels weighing one pound or more.Bound Printed Matter, Media Mail, and Library Mail are content-restricted products. Bound Printed Matter may be used only for permanently bound printed materials such as heavy catalogs, books, and telephone directories. Media Mail and Library Mail may be used only for books, sound and video recordings, certain films and film catalogs, printed music, manuscripts, media, and other eligible items. Only qualified schools, colleges, libraries, and similar organizations may use Library Mail.
Package Service revenue in 2008 was $1.8 billion, with 0.8 billion pieces. Package Services revenue increased 1.8 percent and volume decreased 7.4 percent. The May 12 pricing changes for Package Service products improved product profitability and enhanced shape-based Bound Printed Matter pricing to promote volume growth for flat-shaped catalogs.
Special Services
The Postal Service offers a number of Special Services that can be purchased for a fee (or in the case of Delivery Confirmation, free for online service), either separately or as an added feature to a mail product. These include money orders and Post Office boxes, as well as services that provide customers additional security (such as Registered Mail and Insured Mail), information about delivery (such as Certified Mail, Return Receipt, Delivery Confirmation, Signature Confirmation, and CONFIRM), forwarding and return of mail, and address information. Although some Special Services contribute only modest revenue, as a group these services represent an important revenue source, providing $3.7 billion in 2008.
All Insured Mail labels are barcoded and only items valued over $200 require the recipient’s signature. Customers may purchase up to $5,000 of domestic insurance for packages at all Post Offices and up to $500 at Automated Postal Centers (APCs) or online through Click-N-Ship or eBay.
Click-N-Ship customers who purchase shipping labels on usps.com have the option to add domestic insurance to Click-N-Ship purchases. Click-N-Ship customers can add insurance to Priority Mail and Express Mail; eBay customers can add insurance to Priority Mail, Express Mail, First-Class Mail, Parcel Post, and Media Mail. Insurance fees are the same online as at the retail counter. In addition, customers who purchase domestic insurance through Click-N-Ship and eBay can file their claims online.
Postal Money Orders are a safe, convenient, and economical alternative to sending money through the mail. They can be purchased from any Post Office or rural carrier.