Mail in the digital age

The Associated Press

Marty Sellers used to need about 100 postage stamps every three months. These days, he can stretch that supply to last a year.

Sellers, 40, pays most bills online and receives financial statements electronically. The owner of Sellers Photo in Huntsville, Ala., also has cut down on mailing clients CDs by transferring images over the Internet instead.

"Even things like a birthday card, I will just send a happy-birthday e-mail," he said.

Because many people around the world are like Sellers, the U.S. Postal Service and its counterparts in other countries are tapping technology to cut costs and expand into electronic services -- including services designed to attract more junk mail.

In the U.S., first-class mail volume has dropped 7% since 2001 -- an average of 1.3 billion fewer letters, postcards and bills each year.

Many postal agencies are also having to serve more households because their nations' populations are growing but are getting less mail to deliver to each, said Dean Pope, general manager of business development at Canada Post. "In order to sustain business in that formula, you have to find new services and products and find new revenue growth opportunities."

One of those new services is Canada Post's Borderfree program, which allows Canadians to buy items from U.S. e-commerce partners, pay in Canadian currency and know all taxes and fees ahead of time.

In France, La Poste will print e-mails customers send in and deliver them to physical mailboxes with registered notes and time stamps.

Not all efforts have been successful. For lack of demand, the U.S. Postal Service canceled a few programs it started in 1999 and 2000, including electronic bill payments -- which the private sector now offers with greater success.

"If we look back to the boom days of the Internet . . . there was a surge of e-commerce-related activities in a lot of posts," said Luis Jimenez, chief industry policy officer for Pitney Bowes Inc., a mail and document-management company. "That was primarily motivated by a fear that mail would decline precipitously and they needed a new source of income.

"The realization came just a few short years after that it's very difficult to make money from e-commerce."

Now, most electronic efforts supplement traditional, physical mail. In the U.S., that includes ordering stamps and packing supplies online and providing delivery confirmation electronically without mailing back a receipt.

The USPS also helps retailers generate preprinted labels to include with shipments for merchandise returns.

Jimenez says the refocus comes as postal agencies find that mail volume isn't dropping as quickly as they once feared. E-mail isn't replacing all letters and cards; partly, it's creating communication that might not have occurred otherwise. The Internet also has created new mailing opportunities from e-commerce sales, digital photo printing and DVD rentals.

And many people remain more comfortable with paper.

"I just find paper records more reliable and trustworthy," said David Hildebrand, 72, a retired IBM Corp. computer programmer from San Jose. "They all push me to get electronic statements, but I can't put them in a drawer and I can't look at them when the computer doesn't work."

Paul Saffo, a technology forecaster in San Mateo, Calif., said, "We're going to use more paper, not less, for the short and medium term."

That means postal agencies can benefit for several more years by cutting costs through automation and taking measures such as installing kiosks to reduce window transactions.

By next year, U.S. bulk mailers also will have to start using intelligent bar codes -- with 31 instead of 11 digits of data, allowing for refined tracking and earlier identification of undeliverable addresses.

But ultimately, the challenge will be creating new revenue streams.

Hybrid services represent one tactic. France, Italy and the U.S. let people send documents electronically for printing and delivery by the post office. Italy also has a reverse service, scanning physical mail into digital form.

Other strategies could involve increasing the value of snail mail with, for example, the intelligent bar codes, which can help U.S. mailers remove bad information from their mailing lists.

"The better the quality of mailings and mailing lists they are generated from, the better the response rates these companies are going to see," said Thomas Day, the USPS senior vice president for intelligent mail and address quality.

In other words, expect more catalogs and credit card offers in the short term, although Saffo believes environmental pressures won't make that strategy sustainable in the long run.

Postal agencies don't have forever to adapt.

"There will be a day of reckoning, but I don't know how far down the road that is," said Tony Conway, a former USPS executive who now heads the Alliance of Nonprofit Mailers. "First-class mail continues to decline. I don't see anything that suggests that trend will reverse itself."

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