PMG is monitoring several situations that may impact our clients’ direct mail programs in early 2021 and throughout the year:
- Global Freight Issues: For nonprofits using China-based suppliers for their premium items and direct mail packages, a critical shipping container shortage is causing delays and significant cost increases. Companies waiting weeks for containers to ship their goods from China to the U.S. and Europe have caused shipping costs to increase as much as 300%. Limited air freight capacity under Covid-19 travel restrictions further aggravates the problem. The situation is seriously impacting our overseas premium orders as companies compete trying to secure containers. We are in constant contact with our supplier partners to work through this problem.
- Impending postage increases: We are very concerned about a possible 6 to 8.5 percent mid-year rate increase from the Postal Regulatory Commission and the USPS. The actual postage increases for specific types of mail will most likely be confirmed at the end of March. According to our colleague, Steve Kearney, Executive Director of the Alliance of Nonprofit Mailers, First Class and Marketing Mail postage may increase 6 to 6.5 percent, but specific products within each class may increase less than this average. It’s a complex situation, and the Alliance of Nonprofit Mailers, of which PMG is a sponsor, is advocating aggressively on behalf of nonprofit mailers to stop these increases.
- Delivery trends: Anecdotally, individual service has been quite poor recently. Many of us have experienced delays with our holiday cards, bills and parcels. Delays can often be tied to local Covid-19 hot spots. PMG’s MailTracker reporting shows that our clients’ presorted letter rate mail is delivering within acceptable time frames, however we are seeing longer delivery times for flats like calendar packages. We expect delivery to continue to improve in the weeks and months ahead. Any workshare postal solutions that skip steps in the USPS delivery system, including drop shipping and commingling, help keep delivery times consistent and on schedule.
- Supplier capacity: Now that we are past the election cycle and the Q4 fundraising rush, our suppliers are eager to take on more work. We’re no longer seeing the overbooking challenges and schedule restrictions from last fall. There is some risk of unexpected Covid-19 shutdowns or staffing shortages, but most of our suppliers have found ways to adapt to these ongoing challenges.
- Paper Supply: Good news here – we are not seeing any problems with paper manufacturing or product availability at this time.
The PMG team will continue to monitor these issues and strategize on ways to mitigate their impacts on your direct mail programs. Please contact us if you have any questions or if you would like more detailed information or guidance on any of these trends.