Transactional Mail: Implications for the Postal Service

April 16, 2018 (RARC-WP-18-007)

  • First-Class Mail remains the Postal Service’s biggest provider of revenue and contribution, despite its portion of overall postal revenues having fallen from more than 60 percent in the late 1970s to just 40 percent in 2016.
  • Depending on whether key historical trends continue, intensify, or weaken, the future of transactional mail could vary greatly. We present five hypothetical scenarios for what transactional mail volumes could be in 2026.
  • In addition to its current strategies, the Postal Service should consider additional measures to preserve transactional mail volume through continued innovation.

Although the decline of First-Class Mail volume rightfully gets a lot of attention, it is important to understand the underlying trends affecting its key segments, including transactional mail, which consists of bills, statements, and payments. This paper examines how key and interrelated factors like electronic diversion, demographic changes, the economy, pricing, and evolving security and privacy concerns have affected the growth and decline of transactional mail during the past 15 years, as well as how these factors could affect transactional mail in the future.

In the face of continued declines of transactional mail volume, the Postal Service should continue its work to preserve its value. This paper highlights some of this work and suggests additional strategies the Postal Service could pursue to shore up transactional mail.

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Source: USPS Office of Inspector General

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