An End to the Postal Service's Wall Street Journal Subsidy?

Mail delivery of many newspapers and magazines could soon be delayed a day because of a new Postal Service program to streamline processing of flat mail.

Postal officials believe the changes will significantly reduce the costs attributed to the Periodicals class, which the U.S. Postal Service has targeted for rate increases because the class is supposedly not profitable.

Included in the plan is the end of “Hot 2C” processing that provides expedited – and expensive – manual handling of such time-sensitive publications as The Wall Street Journal and other daily and weekly publications. Another aspect of the plan is nationwide Critical Entry Times (CETs) -- deadlines for drop-shipped copies to receive next-day delivery -- that will supposedly supersede local agreements between publishers and individual postal facilities.

Last month, Dead Tree Edition noted, in How the Postal Service Subsidizes The Wall Street Journal -- and Why It Should Stop, that Hot 2C handling is in essence an indirect subsidy of certain publications.

"Within the Postal Service, the Journal is famous for complaining vociferously if any of its newspapers are delivered a day late, even if the Journal misses the deadline for getting the papers to a postal facility," the article said. "Postal managers generally acquiesce, creating special (and labor-intensive) procedures to expedite handling of the Journal."

Several postal employees submitted comments agreeing with that assessment, including this one: "The mail doesn't leave my plant 'til the WSJ arrives. Spent many nights waiting to tie out and get the trucks on the road, waiting on the WSJ three digit sorts."

One recent Postal Service presentation to publishers indicated that implementation of new standardized Periodicals operating procedures and nationwide CETs would begin July 1. But it's not clear whether that plan is on schedule because little of the outreach to publishers that was supposed to precede implementation has occurred.

The presentation said the CETs would range from 8 a.m. for publications requiring bundle sortation at a Flats Sequencing System facility to 5 p.m. for those entered at non-FSS processing centers and requiring no bundle sorting. All Periodicals mail received in a processing plant by its CET is supposed to undergo automated processing in preparation for delivery the next day.

Postal officials have indicated that eliminating Hot 2C will cut USPS's losses on the Periodicals class by one-third -- if the Postal Service sticks to its guns.

After all, old habits die hard. If a daily newspaper with a history of complaining shows up in a processing plant at 2 a.m., will the new procedures be followed? Will USPS stand behind supervisors who keep costs down by following the procedures, or will it chastise them because of customer complaints?

And will the Postal Service change its mind when publishers threaten to pull their business, or will it realize that it is better off losing a few unprofitable customers?