5-Day Mail Delivery: Potentially a Big Problem for ARM Industry

Stephanie Kaster

Accounts receivable management professionals are on notice: Use mail vendors with single-location processing facilities at your own risk.

When President Barack Obama this month supported the U.S. Postal Service’s (USPS) recommendation to reduce mail delivery to five days a week to help cut its massive losses, the challenge for single-location print and mail vendors increased dramatically. For while the elimination of one delivery day per week would save the USPS millions of dollars, it also threatens to slow the revenue cycle of creditors who use print and mail services for collection letters and notices. And single-location processing facilities tasked with mailing time-sensitive collection correspondence across the country will be at a significant disadvantage compared to multi-location vendors.

How five-day delivery will affect ARM professionals

Eliminating Saturday delivery will result in the delay of mailed correspondence by a day or more (e.g., letters mailed on Friday nights would not be picked up until Monday morning or Monday afternoon). Likewise, many debtor payments will be delayed by at least a day. That’s a potential delay of at least two days in the cash flow cycle of creditors. And if other cost-saving proposals are also enacted (e.g., consolidation or closure of nearly 250 processing facilities, reducing mail processing equipment by as much as 50 percent, adjusting the workforce size by as many as 35,000 positions), the delays could increase.

Efficiencies in postal processes may prevent some of these delays. But single-location print and mail vendors face a challenge that no efficiencies can fix. The USPS has published data indicating that one-day mail delivery will be the standard for mail sent to recipients within 60 miles of the processing center. Two-day delivery can be expected for recipients within 720 miles. And three-day delivery will be the norm for recipients beyond 720 miles.

Single-location vendors face longer delivery delays

It requires only a quick glance at a map of the continental United States (with distances of nearly 3,000 miles from New York City to Los Angeles; and about 1,700 miles from the southern tip of Texas to the Canadian border) to recognize there is a big problem for users of single-location print and mail services. That’s according to Edward Horowitz, COO of PSC Info Group, a national provider of technology-enabled, multi-channel communications solutions to streamline the collection of consumer payments. “It is clear that correspondence mailed from any single-location processing center anywhere in the country will not reach the vast majority of the U.S. population in less than three days,” Horowitz notes. “That’s why a bi-coastal processing strategy will become increasingly important if the USPS’s five-day delivery plan is approved.”

Much debate remains before Congress decides on which remedies to implement to stem the USPS’s financial crisis. But ARM professionals must plan now on how to adjust to any USPS cost-cutting measure, for any measure to improve the postal service’s financial stability is likely to impact mail delivery. Now, more than ever, multi-location, bi-coastal print and mail facilities mean faster mail delivery – and faster debt payment.

Stephanie Kaster is Vice President – ARM Solutions at mailing solutions provider PSC Info Group.

PSC Info Group operates print and mail facilities in Oaks, Pa., and Reno, Nev. These two facilities give the company the ability to reach approximately two-thirds of the country’s population with faster, two-day mail delivery. And as part of PSC’s Business Continuity & Disaster Recovery program, this bi-coastal arrangement not only increases the company’s daily processing output, but the facilities also serve as emergency back-up operations for each other in the event of a natural or manmade disaster.