Sunday, February 21, 2010

Is it Time to Choose Alternative Delivery?

Mailers face greater uncertainty today than ever before about the future of the Postal Service.  Mailers face the real possibility that rates could begin rising faster than inflation in 2011 and beyond if the Postal Service's volume projections do not pan out or Congress fails to make all of the changes necessary to ensure a viable postal enterprise.  The face the likelihood of less service as the Postal Service switches to 5-day service and less certain service as the inevitable glitches arise during the transition.

So what should a mailer do?

Most mailers have few options.   If they want to delivery to households, access to the mailbox is key and only the Postal Service has access.  Therefore, if they want a delivery to a household, they have to have a product that does not require delivery to the mailbox.  Valassis currently is expanding its use of alternative delivery networks in numerous media markets across the United States for delivery of its saturation advertising products.   In these markets, Valassis partners deliver the ads in plastic bags on door steps instead of the mail box.   This delivery mechanism that works well for saturation advertising and work even better if others saturation mailers, including Valpak, political candidates, community colleges, and health care facilities would partner with Valassis and use the same network.  Right now Valassis and other have the choice of alternative delivery firms for saturation advertising in at least 28 states, with local firms serving customers in most others.

Periodical mailers tried to develop an alternative delivery network for household delivery of periodicals nearly 20 years ago with Publisher's Express.   This experiment ended once the Postal Service lowered its rates and increased mailer worksharing which eliminated the cost advantage that Publisher's Express promised. 

Mailers seeking delivery to business addresses may have options but few have explored them fully.  Most business addresses do not have mailboxes, so alternative delivery services have greater access to the recipient than they do for home delivery.

A vibrant periodical delivery industry has existed for over 35 years focused on deliveries to business addresses.   This industry offers delivery of daily, weekly, and monthly periodicals to businesses in most metropolitan areas.  These firms currently generate less than 25% of revenue generated by the Postal Service and the private sector in the delivery of periodicals to business addresses in the markets they serve.   As these firms regularly stop at most businesses in their service area on a daily or weekly basis, they could add volume from mailers to businesses that use the Postal Service at very competitive prices

Right now mailers to businesses facing the greatest price pressure are those that mail periodicals.  Advertising in trade and business publications down so finding a cheaper delivery route could sustain the print product until the economy and advertising recovers, or the publication fully switches to a digital only format.    The problem is even greater for mailers whose format will not pass the Postal Service's "droop test."  Alternative periodical delivery firms would have little trouble handling this mail now at rates more than competitive with the Postal charges now or will charge after the new "droop test" rules go into effect.  

Right now, I would advise mailers that are concerned about the uncertainty associated with the Postal Service's rates, service quality, or acceptance rules should begin exploring what alternatives now exist.   I would expect that most would find the breadth of offerings now available would surprise them.   If you need assistance in exploring available options, and if necessary creating new ones using the existing alternative delivery infrastructure contact me at .


Anonymous said...

You would "advice" mailers? I would advice you to change that word to advise.

Anonymous said...

Around here, leaving materials on people's porches or other "common areas" is a violation of littering laws and will get the delivery companies in trouble. Also, rural areas will not be reached.

Alan Robinson said...

To anonymous who pointed out my usage error. Thank you and it has been corrected.

Anonymous said...

"Most business addresses do not have mailboxes"

Say what? My route consists of over 700 deliveries, 500+ of which are business addresses. Only 2 of those don't have mailboxes.
Perhaps my route is the exception to the rule...or perhaps you have no clue what you're talking about.

Unforgiven said...

Alan, I'm going to agree with the second comment about litter. It's bad enough getting spam in my email box, advertising in every form of media you can imagine, offline spam in the form of junk mail, phone books from every imaginable provider and then some, that I would have to actively urge my community to enact anti-litter laws and possibly trespassing laws, which would discourage any such delivery of crap on my doorstep packaged in a plastic bag. I just don't want more trash laying on my doorstep, drive-way or in my yard. I'll also add, that at least the mailman has been hired and undergone at least a cursory criminal background check, unlike the minimum wage earning homeless guy or young student that will be trespassing my property to deliver that garbage, I don't want them on my property. Advertising isn't going to go away, but I do wish to have some limits on it's intrusion into my life.

Alan Robinson said...

Liter is a legitimate issue for porch based delivery of advertising. That is why it only effective when it is contained in a free weekly. In Montgomery County Maryland we get a free weekly called the Montgomery Gazette that has seen the number of free standing inserts grow.

Where liter is less of an issue is business addresses but there is very little saturation advertising directed toward businesses.

jesrf said...


I'm perplexed by your writing. First, you speak of of "advice" rather than "advise". Now you reference liter, when what you really mean is litter.

As for your reference to free weekly publications, generally those are only truly saturated, when they're delivered by the USPS.... The best thing it appears for the mailers to do, would be to lobby both USPS & Congress for the continuation of 6 day delivery, and an expansion (rather than contraction) of the USPS business model.

USPS is everywhere, everyday. State and local governments could save a fortune by outsourcing services (such as DMV) to the USPS. While the stranglehold of private business on our government will probably prevent USPS from offering financial services, why not expand the government services that USPS can handle? They already do Passports, why not accept tax payments and returns for the IRS? Give drivers license exams and other tests offered at Secretary of State offices and DMV's? Collect court fines and traffic tickets. The possibilities are endless, the infrastructure is there. That's one area where mailers could help and lower the infrastructure costs for USPS and therefore themselves.