THE USPS & THE ISSUE OF UNDELIVERABLE MAIL – MORE PRESSURE ON MAILERS
In 2012, the USPS spent $1.318 Billion managing UAA, with no payback. As the USPS has put tighter controls and automation in place to reduce its dependency on manual and outdated processes, it has also begun the implementation process of UAA regulations which emphasizes more and more burden on mailers to comply. The start of this transition happened 8/2008 with CASS Cycle L / Delivery Point Validation (DPV) which is now required for all mailers that wish to receive postal automation discounts. National Change of Address (NCOA™) requirements shifted in 2009 that require all mailers for transactional First Class as well Direct Mail to prove Move Update compliance by processing such records every 95 days through NCOA™.
This is only the start of the overall process with regards to the USPS and charges to mailers for non-compliance. They have discussed surcharges for every US Company for every piece of returned mail, as most mailers (majority) are not taking a serious approach to this consistent and growing issue. It currently costs the USPS $.98 to treat each undeliverable mail piece. Most First Class mailers pay .37-.42 on average to the USPS to attempt to deliver their mail; this is a losing proposition for the USPS.
The problem takes a back seat to ongoing priorities within companies, yet is 100% attributable to direct cash flow from both consumer and business spending for Billing that is undeliverable as addressed. It is actually a moving target that can have tremendous financial, operational and customer service improvements if taken seriously and made a priority.
Reasons for UAA can occur from the following:
6.7 Billion UAA Volume
- 75.8 % Move Related (Vacant, Address Unknown, Forwarding Service Expired)
- 5.2 % Missing/Incorrect Apt/Ste Numbers
- 0.1 % Missing/Incorrect Directionals
- 0.8 % Rural/Highway Contract Box Numbers
- 4.4 % Missing/Incorrect Street Name/Numbers
- 0.13 % Missing/Incorrect City/St/ZIP
- 13.6 % Other (Missing Recipient, Illegible Handwritten Address, Deceased, Unclaimed, No Mail Receptacle, USPS Automation Errors, USPS Carrier Errors)
The mobility of the American public and the resulting UAA volume creates formidable obstacles for business mailers. Most UAA mail is either First Class (58%) or Standard Mail (38%). Undeliverable-as addressed (UAA) mail is all mail that cannot be delivered to the person or business at the address specified.
UAA programs are divided into two categories: Move Update and Address Quality. The National Change of Address (NCOA™) consists of more than 115 million permanent change of address (COA) orders which cover 18-48 months of COA activity. The data is updated weekly. The FASTforward® database consists of 25 million permanent COA records reflecting the most recent 8 months of COA activity and is updated weekly.
Regarding Address Quality, there are many solutions that currently exist to reduce the overall volume of UAA mail. These solutions focus on address validation and standardization, including ZIP+4 coding, delivery point and carrier route validation, seasonal and vacant delivery. Most solutions focus on the validation of the physical address and not actual move information, as does NCOA™. These solutions are commercially available through service providers that license the databases from the USPS.
One of the largest issues for UAA mail is the impact that the mobile American public plays on mail deliverability. 44 million Americans move each year.
Of that 17% of all consumers move and 19.6% of businesses. The United States Postal Service provides both Move Update and Address Quality solutions, which we find takes care of a small percentage of the actual problem. In fact, current NCOA statistics prove that the current solution is not widely successful. Over 100 billion records are processed each year through FASTforward® and NCOA™, of which a best match rate of 4.1% against a 17% population move.
Of the moving public, we find that approximately 30%-50% of all movers actually complete a Change of Address Form; many simply forget to complete the Change of Address information either at the post office or online at www.usps.com. Therefore, companies must enlist resources and solutions to find the 50%-70% that have not notified anyone of their move. Most of these customers wish to receive their particular communication but forgot. There will be a percentage of the public which does not complete the Change of Address information purposely, to avoid making future payments.