Delivering to Empty Houses

In order for mail to remain a viable options for communications and advertising, every part of the mail supply chain has to eliminate every penny of unnecessary costs.  No cost is more unnecessary than printing and delivering a mail piece to the wrong address.  Every penny associated with delivery to the wrong address reduces the return generated by mail delivered to the intended recipient.  

Minimizing this wasted expense has focused on mail that is addressed to a specific individual.   However, a recent report by Diana Olick on CNBC.com suggests that even saturation mailers face this problem.   Her report indicated that that identified that 11% of all homes are vacant.  The problem is greatest in those parts of the United States that either saw over building of new home, as occurred in Arizona, Nevada, and Florida, or have experienced long periods of economic decline as have occurred in manufacturing focused cities in Michigan, Ohio, western Pennsylvania, and upstate New York.   

Right now, saturation mailers accept a level of waste to get the lower rates available to those mailing to every house.  For example, if the mailer's total cost of printing and postage is 25 cents, then delivering 11% of saturation mail pieces to a vacant house  increases the cost per occupied address to 28.1 cents, a 12.25% increase over the cost per possible address.   The cost per occupied address would be even higher in one of the cities with above average vacancy rates.  

Mailers, printers and the Postal Service would benefit if they could develop a way to reduce delivery to unoccupied houses as an effort to reduce wasted deliveries improves the economic return on saturation mail and will increase demand for this service.  However, currently fixing the problem of delivering to unoccupied houses can result in skipping a significant portion of possible addresses on a carrier route which could bump up the rate to one that does not require delivery to every address on a route.   The Postal Service, mailers and the Postal Rate Commission should take the opportunity to solve this problem by developing a way for the Postal Service to continue to offer the lowest Enhanced Carrier Route rates even if requirements for that rate could not be met due to low occupancy rates on one or more routes within a metropolitan area.