Spring 2024 - 40

THE GCA DESK
USPS Data Practices
GCA REPORT
Reveals Flawed
Delivering for America fails to live up to its name
Nora Weiser
Rafe Morrissey
BY NORA WEISER, EXECUTIVE DIRECTOR, GCA
RAFE MORRISSEY, VICE PRESIDENT OF PUBLIC AFFAIRS, GCA
he Greeting Card Association (GCA) recently released a report
in partnership with the Association for Postal Commerce
that provides critical insight into the severe volume declines in
response to the United States Postal Service's (USPS) excessive
rate increase strategy for stamps and other postage. It reveals
that the methodology used by the USPS to estimate volume loss
in response to rate increases is extremely flawed, and that lost
revenue from volume losses above the model prediction totaled
$1.8 billion. The report also reveals that the USPS methodology
fails to follow best practices for such econometrics and suggests
that the manipulations incorporated in the model are potentially
intentional to support large increases rather than determine
what the market can bear.
These findings have profound implications, given that the
T
report confirms that Market Dominant mail still accounted for
94% of total USPS volume and 56% of revenue in FY2023. First
Class and Marketing Mail accounted for 96% of the Market
Dominant volume and 89% of revenue - yet volumes are
plummeting in response to the twice-a-year large rate increases
The reality is that USPS is
hemorrhaging traditional mail volume,
failing to gain package business while
its costs continue to rise due to large
outlays for infrastructure and increases
in costly full-time employees.
40 Spring 2024 | STATIONERY TRENDS
the USPS continues to ram through. The report suggests that the
USPS is gutting its core business in a vain attempt to capture
market share for packages in competition with a growing
number of private sector companies that are more efficient.
GCA has always taken a data-driven approach toward postal
policy. Through objective analytics, we continually test our
assumptions to ensure the policies we advocate are rooted in
truth and concrete data.
Working with NDP Analytics, we've looked carefully at
the USPS' Delivering for America in response to widespread
concern from the mailing industry that elements of it would be
counterproductive, especially concerning the intentional loss of
more than 40% of mail volume and huge twice-a-year rate hikes.
That analysis proved that the USPS' assumptions in the
plan were inaccurate at its inception and have continued to
fail to meet predictions of how much traditional mail would
be lost, how much package volumes would increase and how
much savings would be achieved. The reality is that USPS is
hemorrhaging traditional mail volume, failing to gain package
business while its costs continue to rise due to large outlays
for infrastructure and increases in costly full-time employees.
Now we see that the USPS' methodology for calculating volume
impacts is severely flawed.
With the USPS' losses continuing to mount, Congress and the
Postal Regulatory Commission (PRC) must take heed. Hopefully,
this new data will convince the PRC to take a more critical
approach to USPS rate requests. Regardless, the GCA continues
to advocate for regulatory modernization legislation that we
hope Congress will embrace and that will spur more rigorous
oversight to ensure that the USPS is held accountable for the
results of the Delivering for America before it is too late. S T
Spring 2024

Table of Contents for the Digital Edition of Spring 2024
