MAILING SERVICES
While Standard Mail volume exceeds First-Class Mail volume, First-Class Mail remains, by far, the largest revenue generator, as illustrated by the two previous charts.
The First-Class Mail category now includes First-Class Mail International. First-Class Mail revenue decreased $226 million, or 0.6%, while volume decreased by 4.6 billion pieces, or 4.8%, in 2008. The revenue decrease occurred in spite of two price increases. Only non-automation presort and First-Class International letters experienced increases in volume. The most significant decline was in single-piece First-Class letters, with a decrease of over 3 billion pieces of mail. The long-term continued decline in single-piece volume reflects the impact of electronic diversion as businesses, nonprofit organizations, governments, and households continue to move their correspondence and transactions to electronic alternatives, such as Internet bill payment, automatic deduction, and direct deposit. The rate of decline accelerated significantly in 2008 as the economy weakened. Presorted First-Class Mail also decreased. This is a reflection of the general curtailment of advertising spending. This curtailment of advertising has significantly impacted both First-Class Mail and Standard Mail.
Mail Volume By Type |
2008 |
2007 |
2006 |
|---|---|---|---|
(Pieces in millions) |
|||
First-Class Mail |
91,697 |
96,297 |
98,016 |
Standard Mail |
99,084 |
103,516 |
102,460 |
Periodicals |
8,605 |
8,796 |
9,023 |
Package Services |
846 |
914 |
919 |
Other Mailing Services* |
896 |
1,081 |
1,084 |
Total Mailing Services |
201,128 |
210,604 |
211,502 |
Total Shipping Services |
1,575 |
1,630 |
1,636 |
Total Mail Volume by Type |
202,703 |
212,234 |
213,138 |
* Free mail for the blind included in the "Other" category. |
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In 2007, First-Class Mail revenue increased $800 million, or 2.1%, as volume decreased by 1.7 billion pieces, or 1.8%. First-Class Mail represented 51% of total operating revenues and 45% of total volume in 2007.
First-Class Mail Changes from Prior Year |
|||||
|---|---|---|---|---|---|
2008 |
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
(Dollars & Pieces in millions) |
|||||
Revenue Change |
$ 193 |
$ 264 |
$ (180) |
$ (503) |
$ (226) |
Percentage |
1.9% |
2.8% |
-1.9% |
-5.4% |
-0.6% |
Volume Change |
(993) |
(760) |
(1,282) |
(1,565) |
(4,600) |
Percentage |
-3.9% |
-3.1% |
-5.4% |
-6.9% |
-4.8% |
Standard Mail Changes from Prior Year |
|||||
|---|---|---|---|---|---|
2008 |
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
(Dollars & Pieces in millions) |
|||||
Revenue Change |
$ 201 |
$ 101 |
$ (161) |
$ (334) |
$ (193) |
Percentage |
3.6% |
2.0% |
-3.2% |
-6.3% |
-0.9% |
Volume Change |
(776) |
(760) |
(1,368) |
(1,528) |
(4,432) |
|
Percentage |
-2.7% |
-3.0% |
-5.6% |
-6.1% |
-4.3% |
Standard Mail revenue decreased almost $200 million, or 0.9%, in 2008, while volume decreased 4.4 billion pieces or 4.3%. Standard Mail items are primarily advertising materials and is particularly sensitive to economic contractions. The drop in Standard Mail volume is a direct reflection of the poor state of the economy, as we experienced accelerated declines in volume as the year progressed. The decline of 1.5 billion pieces in Quarter IV was only topped in severity by the 2.2 billion piece decline in Standard Mail in Quarter I of 2002 following the anthrax attacks and the terrorism of September 11, 2001. The decline is primarily due to the curtailment of advertising, which is expected to continue through 2009, before rebounding beginning in 2010.
In 2007, Standard Mail revenue increased $903 million, or 4.5%, compared with 2006 on 1.0% volume growth. The first quarter was favorably impacted by the carryover effect of the January 2006 price increase. A portion of the third quarter and all of the fourth quarter benefited from the May 2007 price increase. Standard Mail represented 28% of total operating revenues and 49% of total volume in 2007.