MAIL REDESIGN IS A NECESSITY

The following is a perspective by postal commentator Gene Del Polito for Direct magazine.

If you've been reading the trade press regularly, you'll know that the latest buzz within the Washington postal community is the issue of whether mailers and the Postal Service should negotiate an end to the current postal rate case to allow everyone to attend to "other business." Given the importance of postal rate cases, what possibly could be meant by "other business?" It most certainly could mean focusing more on getting our economy and businesses up and going again, but in this instance the "other business" means getting on with the matter of "mail redesign."

Mail redesign is nothing more than a euphemism for what ordinarily might be called mail classification reform. If you've been around in this industry for a while, you might recall that mailers and the Postal Service undertook something called by a similar name back in 1995. Indeed, they did, but the manner in which the reform was undertaken was far from perfect.

The world in which the mailing industry exists today is far different from the time of postal reorganization. In fact, the world that exists today is significantly different than it was back in 1995. Today, the competition the Postal Service now faces in the message communication marketplace is much more intense. For the first time in its history, it faces a future of dwindling mail volumes. For the first time in its history, it's being told by its customers that the services it offers no longer comport well with their changing business communication needs.

Today's mail classification system still bears all the hallmarks of that which existed at the time of reorganization. That is, the entire classification system is based on a scheme of postal pricing that starts with a definition of services whose costs are heterogeneous and fraught with enormously wasteful subsidies that benefit the less efficient at the expense of the more efficient.

Mail redesign can provide the Postal Service and its customers with a unique opportunity to change all that. Instead of basing postal prices on subclasses (aggregations of mail) that differ markedly in terms of their efficiency of preparation and processing and delivery costs, they can be redefined more homogeneously and based on their most cost-efficient preparation. Mailers that choose to let the Postal Service to do more of the work of preparing and sorting mail for delivery would pay surcharges to recover fully the costs of those services. Mailers that opt to forgo everything but delivery of the mail would be allowed to pay prices that are free of the taint of inefficient cross-subsidy.

In many ways, mail redesign is as important to the Postal Service as postal legislative reform. In fact, even in the absence of postal reform, redesign is a necessity. So let's get on with it.