It’s rare that a product in decline is still your most important product. But when you are the U.S. Postal Service and that product is First-Class Mail, it makes a little more sense.

First-Class Mail (FCM) is arguably the product most closely associated with the Postal Service’s mission to bind the nation together. At its peak in fiscal year (FY) 2001, FCM volume hit 104 billion pieces. Even with today’s volume down to 62 billion pieces, First-Class Mail still generates 40 percent of total revenue for USPS ($29 billion in FY 2016) and more than half of total contribution, or profit that goes to paying the Postal Service’s institutional costs.

It’s fair to say that FCM is essential to the Postal Service. Unfortunately, it has experienced a steady decline because of changing communications in the digital age. This is especially true for correspondence mail, or letters and cards sent to and from households, which reached its peak of 24 billion pieces in 2002 and dropped to 16 billion pieces in FY 2016.

Our latest white paper takes an in-depth look at First-Class correspondence mail volume trends and considers how interrelated factors like electronic diversion, demographic changes, the economy, pricing, and evolving security and privacy concerns have affected correspondence mail over the past 15 years. We also look at how these factors could affect First-Class Mail demand in the next 10 years.

The prognosis for a robust recovery does not look good given the pervasiveness of digital communications. Still, the Postal Service needs to continue its work in finding innovative ways to keep correspondence mail from further decline. Our paper highlights some of the Postal Service’s current efforts to reduce correspondence mail volume decline, such as integrating digital features into physical pieces, and suggests strategies it could pursue to shore up FCM. These include, for example, offering additional promotions, incentives, and engagement with companies that offer digital tools to create and send custom postcards and greeting cards.

Do you still see opportunities for growth in First-Class Mail correspondence? What other ways could USPS drive volume growth for it?

Comments (7)

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  • anon

    Most people like to hold something material, in their hand. They may not care about bills, bc bills are paid online, for the most part, these days. However, everyone enJOYs opening cards, paricularly personalized, i.e. birthday and other greetings. Perhaps advertising (works for Hallmark!) this fact, would help increase volume.

    Mar 11, 2018
  • anon

    I definitely see the numbers dropping and IMO the Postal Service has to focus on cleaning up the brand as well as enticing people to reach out with cards and letters. One of the other OIG topics is overworked CCA's, or temp worker city carrier. An overworked and undertrained CCA is someone that is going to be more likely to be lost on the route or not know who is the current resident and likely to misdeliver. or in the perception of the recipient is misdelivering by sending them mail for the correct street number but for people long dead, moved away, etcetera. People love to get letters but they don't feel good about other people's stuff, they worry that if they have the neighbor's then where is theirs? Informed delivery is helping out with that to some degree. Letters are much cheaper than a phone plan and can be felt In the hand, and read at your convenience, unlike an annoying texter blowing up your phone. I can see an ad campaign with a hammock and lemonade, smiles and a five page letter. No matter how good the ad campaign it has to be followed through with good service, so the public needs to be educated regarding putting items into a letter such as gift cards or any small item that has the potential to cause the letter to be torn and the item to be lost from the letter when it is in the automated letter stream. So the approach needs to be two pronged, increase volume but ensure that a greater percentage of the volume is reaching the end destination without damage or an unplanned diversion. The numbers may say that the percentage is very low but for each customer it is their personal perception and often they skew that to say "I always get my neighbor's mail", we need to change that perception through education on proper mailing practices and a sea change in the management of CCA's, RCA's and carriers in general as we encourage people to use more cards and letters.

    Mar 08, 2018
  • anon

    Raise First_Class Mail stamp price up near Priority's

    Mar 08, 2018
  • anon

    Time is what the postal service has and when people are given more, cards and letters will stay. To reach the right demographics and help more prosper. Thank you, USPS.

    Mar 08, 2018
  • anon

    Unfortunately, the link to your white paper brings one right back to this page. Would like to read it, so hopefully you can fix this glitch quickly.

    Mar 08, 2018
  • anon

    Thanks for letting us know. We've fixed the link.

    Mar 12, 2018
  • anon

    For the postal-physical-paper-vessel-documents are with the proof-continuance and: trust-law by the the participants.

    Mar 08, 2018

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