Table of Contents

E         Executive Summary  1

Background  1

Overview     1

Mail Markets  1

1     Chapter 1:  Introduction – Volumes & Trends  5

The Survey  5

U.S. Postal Service Volumes  5

Mail Flows  10

Household Mail 10

Classes and Markets  11

Report Organization  12

2         Chapter 2:  Profile of Mail Usage  13

Introduction  13

Mail Volume and Demographics  13

Characteristics of Higher- and Lower-Volume Households  14

Demographic Characteristics of U.S. Households  15

Use of the Post Office  18

3     Chapter 3:  Correspondence  21

Introduction  21

Correspondence Mail Volume  21

Correspondence Mail and Household Characteristics  21

Personal Correspondence  25

Business Correspondence  28

4     Chapter 4:  Transactions  29

Introduction  29

Transactions Mail Volume  29

Transactions Mail and Household Characteristics  30

Bill Payment 32

Bills and Statements Received  36

5     Chapter 5:  Advertising Mail 39

Introduction  39

The Advertising Market 39

Advertising Mail Volumes  40

Advertising Mail and Household Characteristics  41

Senders of Advertising Mail 43

Attitudes toward Advertising  44

Effectiveness of Advertising Mail 46

6     Chapter 6:  Periodicals  47

Introduction  47

The Periodicals Market 47

Advertising’s Impact on Periodicals  48

Household Periodicals Volume  48

Periodicals Mail and Household Characteristics  50

Subscription Type  52

Volume Drivers  53

7     Chapter 7:  Packages  55

Introduction  55

The Package Market 55

Postal Service Package Volume  57

Packages and Household Characteristics  59

Household Package Contents  62

 

List of Tables and Figures

E         Executive Summary  1

Table E.1:  Mail Received and Sent by Households  1

Table E.2:  Household Mail Volume Received and Sent by Market Served  2

Table E.3:  Advertising by Mail Class  2

Table E.4:  Periodical Type Received  2

Table E.5:  Packages Received and Sent via the U.S. Postal Service  3

1         Chapter 1:  Introduction – Volumes & Trends  5

Table 1.1:  Total Mail Volume: FY 2010, 2011, and 2012  6

Table 1.2:  Total Mail: Revenue, Pieces, and Weight by Shape, FY 2012  7

Table 1.3:  Total Mail: Revenue and Weight per Piece by Shape, FY 2012  9

Table 1.4a:  Total Domestic Mail Flows  10

Table 1.4b:  Total Domestic Mail Flows  10

Table 1.4c:  Domestic Mail Flows per Household per Week  10

Table 1.5:  Mail Received and Sent by Households  10

Table 1.6:  Pieces Received and Sent per Household  11

Table 1.7:  Mail Received and Sent by Households  11

2         Chapter 2:  Profile of Mail Usage  13

Table 2.1:  Mail Volume and Demographics Average Annual Growth, 1981-2012  13

Table 2.2:  Characteristics of Higher- and Lower-Mail-Volume Households  15

Table 2.3:  Education of Higher- and Lower-Mail-Volume Households  15

Table 2.4:  Households by Income and Education  16

Table 2.5:  Households by Income and Age  16

Table 2.6:  Households by Number of Adults  16

Table 2.7:  Households by Size  17

Table 2.8:  Households by Type of Internet Access  17

Figure 2.1a:  Internet Access by Income and Type  17

Figure 2.1b:  Internet Access by Age and Type  18

Figure 2.2:  Broadband Subscribers  18

Figure 2.3:  Household Visits to Post Office in Past Month  19

3         Chapter 3:  Correspondence  21

Table 3.1:  First-Class Correspondence Mail Sent and Received by Sector 21

Table 3.2:  Correspondence Mail Received by Income and Education  22

Table 3.3:  Correspondence Mail Sent by Income and Education  22

Table 3.4:  Correspondence Mail Received by Income and Age  23

Table 3.5:  Correspondence Mail Sent by Income and Age  23

Table 3.6:  Correspondence Mail Received and Sent by Household Size  24

Table 3.7:  Correspondence Mail Received and Sent by Number of Adults in Household  24

Table 3.8:  Correspondence Mail Received and Sent by Type of Internet Access  24

Table 3.9:  Income and Education by Type of Internet Access  24

Table 3.10:  Personal Correspondence Sent and Received  25

Figure 3.1:  Personal Correspondence Sent by Income Group  26

Figure 3.2:  Personal Correspondence Sent by Age Cohort 26

Figure 3.3:  Holiday Greetings Sent by Age and Income, FY 2010, 2011, and 2012  27

Table 3.11:  Personal Correspondence by Type of Internet Access  27

Table 3.12: Business Correspondence Type (Sent and Received) by Sector (Millions of Pieces) 28

4         Chapter 4:  Transactions  29

Table 4.1:  Transactions Mail Sent and Received  29

Table 4.1:  Transactions Mail Sent and Received (cont.) 30

Table 4.2:  Transactions Mail Received by Income and Education  30

Table 4.3:  Transactions Mail Sent by Income and Education  31

Table 4.4:  Transactions Mail Received by Income and Age  31

Table 4.5:  Transactions Mail Sent by Income and Age  31

Table 4.6:  Transactions Mail Received and Sent by Household Size  31

Table 4.7:  Transactions Mail Received and Sent by Number of Adults in Household  32

Table 4.8:  Transactions Mail Received and Sent by Internet Access  32

Table 4.9:  Income and Education by Type of Internet Access  32

Table 4.10:  Bill Payment by Method, FY 2010, 2011, and 2012  33

Figure 4.1:  Monthly Average Household Bill Payment by Method  33

Figure 4.2:  Average Monthly Automatic Deductions per Household  34

Table 4.11:  Types of Bills Paid by Mail 34

Figure 4.3:  Average Bills Paid per Month by Income and Age  35

Figure 4.4:  Bill Payment Method by Age  35

Table 4.12:  Bill and Statement Volumes by Industry  36

Table 4.13:  Average Monthly Bills and Statements Received by Method  37

5         Chapter 5:  Advertising Mail 39

Table 5.1:  U.S. Advertising Spending Growth by Medium, 2010-2012  39

Figure 5.1:  Direct Mail as a Share of Total Advertising, 1991-2012  39

Table 5.2:  Advertising Mail by Mail Classification  40

Table 5.3:  Advertising Mail by Mail Classification  41

Table 5.4:  Advertising Mail Received by Income and Education  41

Table 5.5:  Advertising Mail Received by Income and Age  42

Table 5.6:  Advertising Mail Received by Size of Household  42

Table 5.7:  Advertising Mail Received by Number of Adults  42

Table 5.8:  Advertising Mail Received by Internet Access  43

Table 5.9:  Income and Education by Type of Internet Access  43

Figure 5.2:  Advertising Volumes for First-Class and Standard Mail Advertising by Sender Type  43

Figure 5.3:  Advertising Mail Behavioral Trends, FY 1987, 2010, 2011, and 2012  44

Figure 5.4:  Treatment of Standard Mail by Type  44

Figure 5.5:  Treatment of Standard Advertising Mail by Number of Standard Mail Pieces Received per Week  45

Table 5.10: Intended Response to Advertising Mail by Class  46

Figure 5.6:  Weekly Number of Intended Responses by Income  46

6         Chapter 6:  Periodicals  47

Figure 6.1:  Periodicals Mail Volume per Person, 1971-2012  47

Figure 6.2:  Real Per-Capita Magazine Advertising Spending, 1980-2012  48

Table 6.1:  Periodical Type by Year 49

Figure 6.3:  Newspaper Circulation, 1970-2011*  49

Figure 6.4:  Daily Newspaper Readership, 1987-2012  50

Table 6.2:  Periodicals by Income and Education  50

Table 6.3:  Periodicals by Income and Age  51

Table 6.4:  Periodicals by Size of Household  51

Table 6.5:  Periodicals by Number of Adults in Household  51

Table 6.6:  Periodicals by Type of Internet Access  51

Table 6.7:  Income and Education by Type of Internet Access  51

Figure 6.5:  Subscription Type by Year 52

Table 6.8:  Periodicals by Sender Type  52

Figure 6.6:  Number of Periodicals Received per Week by Households by Income Group  53

7         Chapter 7:  Packages  55

Table 7.1:  Total Package Market Volume Growth  56

Figure 7.1:  Package Delivery Market Segment Share  56

Table 7.2:  Postal Service Sent and Received Packages, FY 2010, 2011, and 2012  58

Figure 7.2:  Postal Service Sent and Received Packages by Household Income  59

Table 7.3:  Postal Service Received Packages by Income and Age  59

Table 7.4:  Postal Service Sent Packages by Income and Age  59

Table 7.5:  Postal Service Received Packages by Income and Education  60

Table 7.6:  Postal Service Sent Packages by Income and Education  60

Table 7.7:  Postal Service Received and Sent Packages  by Size of Household  61

Table 7.8:  Postal Service Received and Sent Packages  by Number of Adults in Household  61

Table 7.9:  Received and Sent Packages by Household Internet Access  61

Table 7.10:  Income and Education by Type of Internet Access  61

Table 7.11:  Contents of Postal Service Sent and Received Packages  62

Executive Summary

This report documents the findings of the United States Postal Service’s Household Diary Study (HDS) for Fiscal Year (FY) 2012. The three main study purposes are to:

·         Measure the mail sent and received by U.S. households,

·         Provide a means to track household mail trends over time, and

·         Make comparisons of mail use between different types of households.

The report examines these trends in the context of changes and developments in the wider markets for communications and package delivery.

Background

The Household Diary Study survey, fielded continuously since 1987, aims to collect information on household use of the mail and how that use changes over time. The survey collects household information on demographics, lifestyle, attitudes toward mail and advertising, bill payment behavior, and use of the Internet and other information technologies.

The FY 2012 report covers Government Fiscal Year 2012, with comparisons to 2010, 2011, and other years, as appropriate.

Overview

In 2012, U.S. households received 121.4 billion pieces of mail, and sent 14.8 billion, as seen in Table E.1. Mail sent or received by households constituted 83 percent of total mail in FY 2012. Fifty-seven percent of the mail households received was sent Standard Mail. Only three percent of household mail was sent between households; the rest was sent between households and non-households.

Table E.1:
Mail Received and Sent by Households

 (Billions of Pieces)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.
* Includes First-Class and Standard Mail packages.

Mail Markets

The Household Diary Study examines mail by the markets it serves. This design cuts across classes, but provides a foundation for understanding mail flows and the marketplace changes that affect them. Table E.2 shows the volume of household mail by market for 2010 through 2012.

Thirty five percent of household mail contains correspondence and transactions, a share that is unchanged from 2011. In terms of volume, total correspondence fell 6.3 percent compared to 2011. Since 2002, correspondence fell 38 percent. In part, the decline in correspondence is a continuation of long-term trends, but it is also strongly related to changing demographics and new technologies. Younger households send and receive fewer pieces of correspondence mail because they tend to be early adaptors of new and faster communication media such as e-mails, social networking, and smart phones.

Table E.2:
Household Mail Volume Received and Sent by Market Served

(Billions of Pieces)

Source:  HDS Diary Sample, FY 2010, 2011, and 2012.
Notes: 
Correspondence and Transactions include 6.1 billion pieces of First-Class advertising-enclosed mail (excluded from totals).
Package volumes include ground packages and expedited, as well as
0.8 billion pieces of CD/DVD rentals.

Electronic alternatives also affect transactions mail volume. Over time, automatic deduction and online bill pay account for a growing share of household bill payments. Compared to 2002, the percentage of bills paid by electronic methods increased from 17 percent to 56 percent in 2012. In contrast, bills paid by mail decreased from 75 percent to 40 percent of total payments over the same period of time.  In-person payments decreased from 8 percent in 2002 to 4 percent in 2012. Similarly, the Internet has contributed to some decline in the share of bills and statements households received through the mail. Bills and statements received online continue to grow at a fast pace, albeit from a relatively small base (in 2012 households received an average of 1.7 pieces of bills and statements online, compared to 13.5 pieces in the mail).

Advertising mail represented well over half (60 percent) of all mail received by households in 2012. As shown in Table E.3, 86 percent of all advertising mail received by households is Standard Mail (68.6 billion pieces). The remainder consists of First-Class Mail; either stand-alone advertising (4.9 billion pieces), or advertising-enclosed pieces that are sent along with other matter (6.1 billion pieces).

Over time, the data show a steady decline in the share of First-Class advertising mail, from 21 percent in 2002 to only 14 percent in 2012.

Table E.3:
Advertising by Mail Class

Source:  HDS Diary Sample, FY 2012.

As shown in Table E.4, households received 5.1 billion Periodicals via mail in 2012, less than in both 2010 and 2011.  More than three-quarters of these were magazines. Newspapers are only 15 percent of total Periodicals, down from 35 percent in 1987. Contributors to the decline in newspaper volumes were lower circulation and readership levels, as well as a strong growth of the Internet as an alternative delivery method over the past decade.

Table E.4:
Periodical Type Received

Source:  Household Diary Study, FY 2012.

In 2012, households received 2.9 billion and sent 0.5 billion packages. Compared to 2011, total packages sent and received decreased 17 percent, with most of the decline coming from CD/DVD rentals included in First-Class packages for this report.  Excluding 0.8 billion pieces of CD/DVD rentals, total packages sent and received increased 6.7 percent.  In general, delivery from mail order and Internet retailers is an important driver of package volume. While the HDS data is not designed to quantify this, there are indications that online auction sites (like eBay) are responsible for some of the recent increase in packages sent by households.

Table E.5:
Packages Received and Sent via the U.S. Postal Service

(Millions of Pieces)

Source:  HDS Diary Sample, FY 2012.
Notes:
Totals may not sum due to rounding.
Expedited includes Priority Mail and Express Mail.
First-Class packages include 0.8 billion pieces of CD/DVD rentals sent to and received from Netflix, Blockbuster, etc., reported in First-Class Mail letters in Tables E.1, 1.5, and 1.6.

 

Chapter 1:  Introduction – Volumes & Trends

The United States Postal Service Household Diary Study (HDS) Report documents the findings of the Fiscal Year (FY) 2012 study. The HDS measures the mail sent and received by U.S. households, tracks household mail trends, and compares mail use between different types of households.

The Survey

The Household Diary Study survey, fielded continuously since 1987, aims to collect information on household use of the mail and how that use changes over time. The survey collects household information on:

·         Volumes of mail sent and received,

·         Demographics,

·         Attitudes toward mail and advertising,

·         Bill payment behavior, and

·         Use of the Internet and other information technologies.

These data are used for market research, forecasting, and strategic planning within the Postal Service.

The data generated by these two instruments are the basis of the analysis in this report.

The HDS FY 2012 report covers the period from September 25, 2011, through September 28, 2012, roughly equivalent to the Government Fiscal Year (GFY) used by the Postal Service. Data from FY 2010 and FY 2011 are also reported on a GFY basis.

U.S. Postal Service Volumes

Serving a nation containing five percent of the world’s population, according to the Universal Postal Union, the Postal Service delivers over 40 percent of the world’s mail. The Postal Service delivered 159.9 billion pieces of mail in FY 2012—a decrease of 8.4 billion pieces, or 5.0 percent, from 2011.

In 2012, mail volumes were negatively impacted by the continuing migration of transaction and correspondence mail to the Internet and other electronic alternatives.  Additionally, the sluggish economic recovery provided little or no boost to mail volumes.

Standard Mail volume, consisting mostly of advertising material, declined 5.8 percent (about 5.0 billion pieces) from 2011 to 2012, driven by a weak market for traditional advertising and a fragile economy.

In 2012, First-Class Mail volume fell 5.6 percent (about 4 billion pieces), continuing a long downward trend that began 2001. Ongoing diversion of correspondence and transaction mail to electronic alternatives and the weak economy were key contributors to the decline. First-Class Single-Piece letters and cards, impacted mostly by the growing use of online bill payments and emails, fell 8.1 percent from 2011 to 2012. Presort letters and cards (which include most of the advertising material that is sent First-Class) fell 3.7 percent from the combined impact of electronic diversion and a sluggish economy.

The Postal Service estimates the revenues, volumes, and weight of mail pieces going through the postal network by using a combination of statistical sampling systems, mailing statements, and accounting data. These data are published in the Revenue, Pieces, and Weight (RPW) Reports.

Table 1.1 presents the RPW volumes for FY 2012, along with data for FY 2011 and FY 2010.

Table 1.2 reports revenue, pieces, and weight data by class and shape for FY 2012.

·         The letters column heading includes postcards and refers to pieces that are less than 11.5 inches wide by 6.125 inches tall and less than .25 inches thick.

·         Flats consist of pieces that are greater than 11.5 inches wide, 6.125 inches tall, or .25 inches thick, but less than 12 by 15 by .75 inches.

·         Parcels are pieces that are larger than 12 by 15 inches, or thicker than .75 inches.

Because of the difficulty involved in recording mail-piece characteristics in the Household Diary, these categories do not correspond precisely to the shape categories used by HDS respondents.

Table 1.3 is derived from Table 1.2 and shows the revenue per piece and weight per piece for each subclass of mail by shape.

Table 1.1:
Total Mail Volume: FY 2010, 2011, and 2012

(Billions of Pieces)

Source:  RPW Reports.
Note:  Totals may not sum due to rounding.
* Other includes: Negotiated Service Agreements (NSAs), International Mail, Express Mail, and Fees (not reported by shape).

Table 1.2:
Total Mail: Revenue, Pieces, and Weight by Shape, FY 2012

Source:  RPW Reports.
Note:  Totals may not sum due to rounding.
* Other includes: NSAs, International Mail, Express Mail and Fees (not reported by shape).
** All Services include Ancillary and Special Services.

 

Table 1.3:
Total Mail: Revenue and Weight per Piece by Shape, FY 2012

Source:  RPW Reports.
Note:  Totals may not sum due to rounding.
* Other includes: NSAs, International Mail, Express Mail, and Fees (not reported by shape).

 

Mail Flows

Mail volume can be broken into four basic flows, based on origin and destination. These flows are:

1)       Household to household,

2)       Household to non-household,

3)       Non-household to household, and

4)       Non-household to non-household.

Table 1.4a shows the total mail in each flow, and Table 1.4b shows pieces per household per week.

Table 1.4a:
Total Domestic Mail Flows

(Billions of Pieces)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.

Table 1.4b:
Total Domestic Mail Flows

Table 1.4c:
Domestic Mail Flows per Household per Week

Source:  Household Diary Study, FY 2012.

Household Mail

As shown in Tables 1.4a-c, domestic mail to and from households constituted 82 percent of total mail volume in 2012, which equates to 20.9 pieces per week sent and received by U.S. households. Table 1.5 presents the volumes of mail sent and received by households as estimated from the HDS. The table shows the categories in which the households record their mail. Households received 121.4 billion pieces of mail and sent 14.8 billion. Both of these totals include the 4.5 billion pieces of mail that households sent to each other. The total mail received or sent by households in FY 2012 was 131.7 billion pieces.

Table 1.5:
Mail Received and Sent by Households

(Billions of Pieces)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.
* Includes First-Class and Standard Mail packages.

Table 1.6 presents these data in two other forms, annual volumes per household and pieces per household per week. Many of the subsequent results in this report are presented in terms of pieces per household per week.

Table 1.6:
Pieces Received and Sent per Household

Source:  HDS Diary Sample, FY 2012.
Note: Totals may not sum due to rounding.
* Includes First-Class and Standard Mail packages.

Classes and Markets

·         First-Class Mail is used to send transactional mail, correspondence, and advertising. Because it is limited to pieces weighing thirteen ounces or less, it primarily includes letters and cards.

·         Standard Mail is advertising mail. For the most part, Standard Mail comprises letters and flats, although it contains a few postcards and packages as well.

·         Periodicals are magazines and newspapers, and are predominantly flat-shaped.

·         Package and Shipping Services is used to deliver merchandise, books, catalogs, and media such as CDs and DVDs. Most of this mail is parcel-shaped.

Table 1.7 crosswalks between classes of mail and the markets they serve.

Table 1.7:
Mail Received and Sent by Households

Source:  HDS Diary Sample FY 2012.
Notes: Correspondence and Transactions include 6.1 billion pieces of secondary advertising mail also reported in Advertising Mail.
The “Total” column for each class does not include pieces that could not be identified according to markets (Unclassified).
First-Class Packages include 0.8 billion pieces of CD/DVD rentals sent to and received from Netflix, Blockbuster, etc., reported in First-Class Mail letters in Tables E.1, 1.5, and 1.6.

 

Report Organization

The rest of the Household Diary Study report is organized around the markets the mail serves. Each chapter contains an analysis of the trends in the HDS data, as well as a discussion of how those trends affect and are affected by changes in the broader market. The following provides an overview of each chapter.

Chapter 2: Profile of Mail Usage gives an analysis of household demographics. This chapter examines demographic trends over time and their impact on the mail, and discusses attributing factors, such as access to technology and changing attitudes.

Chapter 3: Correspondence examines mail that is used solely or primarily to deliver (non-sales-related) communications, such as letters and greeting cards. This chapter includes analysis of both personal and business correspondence.

Chapter 4: Transactions reviews financial transactions in the mail and the impact of new technologies on that market. It analyzes household bill payment trends with a focus on technological and demographic change.

Chapter 5: Advertising Mail presents the trends in mail used to deliver sales-related messages. It contains information on household attitudes towards advertising by various media, treatment of advertising mail, and demographic determinants of advertising mail receipt.

Chapter 6: Periodicals examines magazines and newspapers delivered in the mail. It looks at how changing demographics are affecting the market for periodicals, and what the implications are for future volume.

Chapter 7: Packages analyzes household use of various types of packages, and it discusses the household market for merchandise delivery.

In addition, there are three appendices to the report:

Appendix A contains a set of comparative tables for FY 1987, FY 2011, and FY 2012, organized by class of mail. A concordance is presented for comparison with pre-2000 reports.

Appendix B documents the study methodology and discusses how the data were collected, weighted, and adjusted, and compares demographic data in the sample to that of the population as a whole.

Appendix C contains the instruments used to administer the survey.

 

Chapter 2:  Profile of Mail Usage

Introduction

This chapter provides information on demographic trends and other factors affecting mail volume, providing a basis for assessing mail volume changes. The breakouts introduced provide the basis for much of the analyses in subsequent chapters.

The first section looks at growth in mail volume, population, households, and delivery points over recent decades. The next section examines the demographic characteristics of mail users, contrasting higher-mail-volume households with lower-volume households. The third section details the emerging demographic and technological trends that will affect the future of mail. The last section examines some of the factors affecting the use of post offices and mailboxes.

Mail Volume and Demographics

Total U.S. mail volume grew from 110 billion pieces in 1981 to 160 billion in 2012, an increase of 45 percent. This growth outpaced the rate of population growth and was close to household formation. Over the same period, according to the U.S. Census Bureau, the adult population grew 34 percent and households grew about 47 percent. The number of places to which the Postal Service delivers increased still faster, growing by 55 percent (see the USPS annual reports). As Table 2.1 shows, however, volume decreased by an average of 2.4 percent per year over the last eleven years (due to large declines from 2007 onward), while U.S. population growth, household formation, and delivery points increased by an average of about one percent per year. With falling revenues and rising costs, the Postal Service suffered significant financial losses towards the end of the decade.

The 1980s was a time of extraordinary mail volume growth that began in 1978 and continued through 1988. In 1984, mail volume grew more than ten percent. During this period, technology facilitated this growth. Construction of computerized databases and techniques for sorting large amounts of data created a fertile climate for direct mail marketing. Computerization of financial systems encouraged billing by mail and payments through the mail. These innovations in business processes were further encouraged by the expansion of postal rate discounts.

The Postal Service introduced work-sharing discounts, encouraging mailers to prepare the mail in ways that reduce the total system cost of creating and delivering the mail. Mailers could take advantage of these discounts by sorting the mail in advance. The Postal Service would receive the mail presorted to the individual ZIP codes and/or to the carrier routes associated with those ZIP codes.

In the late 1980s and early 1990s, mail volume growth barely kept pace with household growth. The demand for mail was hurt by a recession and two very large rate increases. This was also a period in which the Postal Service absorbed substantial costs that were reapportioned from the Federal government’s retirement programs.

Table 2.1:
Mail Volume and Demographics
Average Annual Growth, 1981-2012

Source:  U.S. Postal Service, U.S. Census Bureau.

The latter half of the 1990s saw rapid growth in mail volume, spurred by a strong economy and rates that increased by less than inflation. The Postal Service also realigned the incentives built into its price structure. It reduced the incentives mailers had for presorting mail and encouraged them to prebarcode their mail. By 2002, the majority of letters the Postal Service received had qualifying barcodes on them. This restructuring of the rates took advantage of the extensive automation of mail preparation and sorting that occurred in the previous decade.

During the 1990s, the U.S. economy rapidly embraced information technology and integrated the Internet into its business processes. An economic recession followed that began in March 2001. The 2001 terrorist attacks on the World Trade Center and the Pentagon led to large-scale disruptions of those mail services dependent on air transport, such as First-Class, Priority, and Express Mail. When air service was restored, Priority Mail was no longer allowed on commercial passenger flights. Soon afterwards, lethal anthrax was sent through the mail, which resulted in five deaths and a number of serious injuries. These terrorist attacks, combined with the economic recession, caused mail volume to decline 2.2 percent in 2002, which was, at the time, the largest annual decline since World War II. In 2003, Standard Mail volume recovered to a new high, but total First-Class volume continued to decline. Work-shared First-Class Mail fell for the first time ever. Since 2003, Standard Mail volume grew along with the economy, reaching new highs and exceeding First-Class Mail for the first time in 2005. Total First-Class volume, on the other hand, continued to decline, in part due to the diversion of bills and statements to electronic alternatives and the lower-cost Standard Mail option as an alternative to First-Class advertising.

The economic recession that began in December 2007 and ended in June 2009 had a severe impact on the mail. Total mail volume plunged 12.7 percent in 2009—the largest decline since the Great Depression. In July 2009, the recession was officially over but was followed by a slow recovery that continued through the end of 2012.  As a result, total mail volume declined an additional ten percent between 2009 and 2012.  Both Standard Mail and First-Class Mail contributed to the overall decline in mail volume, falling 3.8 and 18.0 percent respectively.

Between 2001 and 2012, total mail volume fell 23 percent.  During the same time period, the adult population increased 14 percent, households increased 12 percent, and the Postal Service added ten percent more delivery points to its network.

The Postal Service depends on mail volume growth to fund universal service. The number of addresses the delivery network serves increases as the number of American businesses and households increases. When mail volume falls, as was the case between 2001 and 2012 the Postal Service’s ability to fund delivery service is hampered because the Postal Service charges its customers for piece volume but does not assess connect charges, access fees, or system fees, like many other network enterprises.

Characteristics of Higher- and Lower-Volume Households

Tables 2.2 and 2.3 show the demographic characteristics of households by the amount of mail received. It is apparent that household mail use is strongly correlated with both income and education. Note, however, the similar correlation between mail receipt and Internet access, which is also related to income and education. Therefore, households that make the most use of the mail are the households with the greatest opportunity to use alternatives to the mail.

These high-volume households are taking advantage of the opportunity to move away from the mail. Households that receive 30 or more pieces of mail each week pay an average of 37 percent of their bills online, up from 33 percent in 2010 and 35 percent in 2011.  Households that receive less than 30 pieces of mail each week are quickly catching up, however, as they paid an average of 35 percent of their bills online.  The percentage of online bill payments among these lower-volume households has increased from 28 percent in 2010 and 30 percent in 2011.

 

 

 

 

 

 

Table 2.2:
Characteristics of Higher- and Lower-Mail-Volume Households

Source:  HDS Diary Sample, FY 2012.
Note:  Mail received includes USPS and Non-USPS mail.

Table 2.3:
Education of Higher- and Lower-Mail-Volume Households

Source:  HDS Diary Sample, FY 2012.
Note:  Percentages may not total 100 percent due to heads of households who did not answer the educational attainment question.
Percentages in this table are row percentages.
Excludes households not receiving any mail delivery at their home address (using mailbox only).

 

Demographic Characteristics of
U.S. Households

This section develops breakouts of households by demographic categories that influence the volume of mail sent and received. It looks at both traditional and newly emerging factors. The following chapters will show how mail volume varies with these household characteristics.

Income, Education, and Age

Traditionally, mail use was largely determined by household income, education, and age. As Table 2.4 shows, income and education are strongly correlated with each other, as expected.

The relationship between income and age, shown in Table 2.5, is somewhat more complicated. Up to retirement, household income and age are fairly closely related. After retirement, households earn substantially less; although by that point, mail behavior is pretty well set, and older households continue to receive similar amounts of advertising and periodicals, and pay similar amounts of bills, even though their income declines.

Table 2.4:
Households by Income and Education

(Percent of Households)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.

Table 2.5:
Households by Income and Age

(Percent of Households)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.

 

Household Size

The majority of U.S. households include either one or two adults, but households with three or more adults make up 19 percent of the total. Once considered the norm, nuclear families—two adults and at least one child—now account for only 20 percent of households (per the U.S. Census Bureau). The changing composition of households impacted the amount and kinds of mail sent and received by households over the past 20 years, generating more and different kinds of advertising mail, as well as affecting transaction mail trends (bills tend to be tied to households as much as to individuals).

Table 2.6:
Households by Number of Adults

(Millions of Households)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.

 

Table 2.7:
Households by Size

(Millions of Households)

Source:  HDS Diary Sample, FY 2012.
Note:  Total may not sum due to rounding.

Internet Access

Access to the Internet and use of new technologies, such as Broadband, have a large and growing impact on mail use. Bills, statements, and bill payments still represent a significant number of pieces sent and received by households. However, electronic activity in this area is diverting mail once used for these purposes. On the other hand, online shopping potentially adds packages and catalog delivery to the Postal Service mail stream.

Table 2.8 shows that 84 percent of households have Internet access and 79 percent have Broadband access. The highest levels of Internet and Broadband access are within households with incomes over $100,000 (98 and 95 percent, respectively), as seen in Figure 2.1a. In comparison, households with incomes below $35,000 are less likely to have access to the Internet and Broadband (61 and 54 percent, respectively). As shown in
Figure 2.1b, age is also an important determinant of households having Internet access. Younger households (heads of households younger than 35 years old) are more likely to have access to both the Internet and Broadband (93 and 90 percent, respectively). Older households (heads of households older than 55 years of age), on the other hand, are less likely to have access to the Internet and Broadband (67 and 60 percent, respectively).

Table 2.8:
Households by Type of Internet Access

(Millions of Households)

Source:  HDS Diary Sample, FY 2012.
Note:  Totals may not sum due to rounding.

Figure 2.2 shows the trend in Broadband connections. The rapid growth of Broadband expands the potential scope of electronic diversion of the mail. The Internet’s fast, always-on connection makes it a stronger alternative medium for the delivery of entertainment, information, and communication. As more households begin using Broadband, the more that bill payments, bill and statement presentment, periodicals, and even advertising mail, will be affected.

Figure 2.1a:
Internet Access by Income and Type

Source:  HDS Recruitment Data, FY 2012.
Note:  Sum of Internet Access and None does not equal 100 percent due to missing responses and access outside the home only.  Sum of Broadband and Dial-up does not equal the 100 percent due to missing responses.

Figure 2.1b:
Internet Access by Age and Type

Source:  HDS Recruitment Data, FY 2012.
Note:  Sum of Internet Access and None does not equal 100 percent due to missing responses and access outside the home only.  Sum of Broadband and Dial-up does not equal the 100 percent due to missing responses.

 

Figure 2.2:
Broadband Subscribers

Source:  Leichtman Research Group.

 

Use of the Post Office

The Postal Service currently owns and operates 31,272 post office locations throughout the U.S.
As shown in Figure 2.3, in spite of a declining frequency of visits over the past five years, the use of post offices for mailing services continues to dominate the mail service industry. Sixty percent of all U.S. households patronize a post office at least once a month, while just 11 percent visit a private mailing company. Over 28 percent of all households in the U.S. visit the post office three or more times a month. Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain strong.

A rented mailbox is one alternative that households use to manage their mail. In 2012, 3 percent of all households in the U.S. rented mailboxes from the Postal Service, and 1 percent rented a box from a private company. Post office box use, however, declined in the past ten years, with 3 percent of U.S. households renting a post office box from the Postal Service in 2012, compared to 10 percent in 2001.

 

Figure 2.3:
Household Visits to Post Office in Past Month

Source:  HDS Recruitment Data, FY 2007 and 2012.

 

 

Chapter 3:  Correspondence

Introduction

This chapter examines correspondence mail among households and between households and businesses, including letters, greeting cards, invitations, and announcements. In several cases, this chapter, and several following it, examines comparisons in data between 2010 and 2012, providing an illustration of mail trends over time.

Correspondence Mail Volume

Total correspondence sent and received represents about nine percent of all household mail volumes, as shown in Table E.2. Table 3.1 provides a recent history of total correspondence volumes, showing an 8.4 percent decline from 2010 to 2012. Personal correspondence, which is essentially household to household mail, fell 13.2 percent from 2010 to 2012, continuing a long-term decline that started 25 years ago. In 1987, households reported receiving 1.6 pieces of personal correspondence each week. By 2012, personal correspondence received declined 56 percent, to just 0.7 pieces per household per week.

In large part, this decline stemmed from competition from an ever-changing landscape of communication technologies, such as affordable long-distance telephone service and, more recently, e-mail, social networking, and cellular communications—all of which provide an alternative to personal letters and business inquiries. Such advances in technological communications completely transformed the marketplace, and continue to have an impact on personal correspondence.

 

Correspondence Mail and
Household Characteristics

The following tables break down correspondence mail sent and received by households using the demographic categories developed in Chapter 2.

Income, Education, and Age

Tables 3.2 and 3.3 on the following page show that both household income and educational attainment have a strong effect on correspondence sent and received by households. In many cases, the volume of correspondence sent and received by households with the highest income or the highest education is more than double the volume that is sent and received by households with the lowest income or the lowest education.

Table 3.1:
First-Class Correspondence Mail Sent and Received by Sector

Source:  HDS Diary Sample, FY 2010, 2011, and 2012.
Notes:  Totals may not sum due to rounding. 

.

Table 3.2:
Correspondence Mail Received by Income and Education

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.
Note:  Excludes Don’t Know/Refused.

Table 3.3:
Correspondence Mail Sent by Income and Education

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.
Note:  Excludes Don’t Know/Refused.

 

 

Tables 3.4 and 3.5 show that age also has a significant effect on correspondence mail sent and received by households. Regardless of their income, in most cases, younger households both send and receive fewer pieces of correspondence mail. Young adults have traditionally sent and received less mail than older adults, but the advent of the Internet age widened the gap between these two age groups.

Table 3.4:
Correspondence Mail Received by Income and Age

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.

 

Table 3.5:
Correspondence Mail Sent by Income and Age

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.

 

 

Household Size

As would be expected, household size has a positive effect on correspondence mail. Tables 3.6 and 3.7 show that the jump from one person to two is associated with a considerable increase in correspondence mail. Further increases in size can have varying effects. As shown in Table 3.7, these increases are generally because of the presence of an additional adult in the household.

Table 3.6:
Correspondence Mail Received and Sent
by Household Size

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.

Table 3.7:
Correspondence Mail Received and Sent
by Number of Adults in Household

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.

Internet Access

Table 3.8 shows that households with Internet access (Broadband and Dial-up) tend to send and receive more correspondence mail than households without such service. The explanation for this somewhat counterintuitive result is the high correlation among income, educational attainment, and the presence of an Internet connection in the home. As Table 3.9 shows, households with Internet access have a greater average income than households without a connection. Similarly, on average, households with Internet access have a higher level of education than those without access. In fact, these correlations could be a warning sign for mail, since more volume goes to households that are vulnerable to diversion.

Table 3.8:
Correspondence Mail Received and Sent by Type of Internet Access

(Pieces per Household per Week)

Source:  HDS Diary Sample, FY 2012.

Table 3.9:
Income and Education by Type of Internet Access

Source:  HDS Diary Sample, FY 2012.

Personal Correspondence

In FY 2012, personal correspondence accounted for an average of 0.7 pieces of mail per week, which is about the same as in 2011 and lower than in 2010. Table 3.10 shows the total volumes and average number of pieces by personal correspondence type.

The volume of personal letters continued to decline in 2012—a trend primarily driven by the adoption of the Internet as a preferred method of communication. Similarly, all other types of personal correspondence also fell because of the increasing availability of new electronic alternatives (such as e-cards, e-vites, smart phones, and social networks).

Each year, the rise of these new virtual technologies continues to change the way friends and family stay in touch. The weak economic recovery also contributed to the decline, as spending on cards and other correspondence-related products likely decreased.

Table 3.10:
Personal Correspondence Sent and Received

Source:  HDS Diary Sample, FY 2010, 2011, and 2012.
Note:  Totals may not sum due to rounding.