A big component of our document output service in helping carriers with policyholder communications is the United States Postal Service. While there is a significant shift happening toward digital communications, print and mail remains the primary method of communication from carriers to policyholders and agents.
With this heavy industry reliance on the USPS, we think it’s important to keep clients updated on developments and changes related to the organization.
There are two issues with the USPS that are top of mind for us at the moment, one ongoing and another that’s emerging as a possibility.
The Ongoing USPS Challenge: Service Delays
Throughout the COVID-19 pandemic we’ve seen service delays from the USPS due to limited employee availability, decreased transportation methods and schedules, and increased shipping happening throughout the country.
But what we haven’t consistently seen are these delays quantified. Below are two tables that were published recently to the USPS website documenting mail delivery performance during the first quarter of the USPS fiscal year. That timeline covers mailpieces delivered between October 1, 2020 and December 31, 2020. We’re focused on the three-to-five day column, which is what’s most important for the insurance industry.
Quarterly Performance for Single-Piece First-Class Mail
Quarterly Performance for Presort First-Class Mail
Though the winter holidays are the busiest time of year for the USPS, the delay percentages are still noteworthy. What’s particularly revealing is comparing these delays to the USPS annual performance from previous years.
Most likely, we aren’t currently seeing delays of this scope, but the delays are still something to consider as you’re sending policyholder communications, especially those that are very timely.
The Emerging USPS Challenge: A Midyear Price Increase
A midyear price increase is being considered by the USPS.
Over the past 14 years, the Postal Service used the same process for setting rates. However, the Postal Regulatory Commission (PRC) recently issued an order requiring the Postal Service to apply changes to its rate making process. As part of that order, the Postal Service is now authorized to institute a significant rate increase this year.
Nothing is certain yet. We don’t know if the Postal Service will implement a rate increase this year, but it has indicated that the potential additional increase could be as high as 6.5%, and could happen as early as mid-year.
There’s not much information to share beyond this, but knowing the costs of print and mail policyholder communications, we felt we should share this information with you for planning purposes. Even a modest rate increase could impact your budget greatly, so it’s important to start looking at the potential of this happening and what it could mean for your budget.
If you’d like to learn more about the changes mentioned above, you can visit this link for background.