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 alan.robinson@directcomgroup.com .