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Greeting Card Association (GCA) and EMA Urge Delay of August Stamp Price Increase Based on New Economic Analysis

FOR IMMEDIATE RELEASE – July 12, 2021
Contact: Rafe Morrissey rafem@morrisseystrategic.com

The EMA and the Greeting Card Association (GCA), whose members depend on the USPS to deliver more than half of greeting cards purchased by Americans to their final recipient, urges that the price increase for the Forever Stamp and other Market Dominant postage rates be delayed until January 2022. Data from a new report by NDP Analytics released today underscores that USPS’s financial performance and other projections in its “Delivering for America” plan are much improved from its original forecast. All participants in the mailing industry, including citizen mailers, continue to recover from the pandemic, and the proposed large and unexpected increases in postage, which few in the industry anticipated or budgeted for, place an unnecessary burden on the USPS’ monopoly customers, further depressing mail volume.

“Simply put, the USPS does not need the revenue from the proposed increase now,” said GCA President, George White. “While there can be a debate over how much rate authority in the future
is appropriate for the USPS but it is clear it has the ability to raise rates as proposed. It is also clear, however, that the USPS can afford to wait until the normal January timeframe for rate
increases which would allow the industry time to stabilize their business coming off the pandemic and prepare for the higher rates.”

The new report, “Review of USPS 10-Year Plan: Achieving Financial Stability Without Excessive Rate Increases” by NDP Analytics demonstrates that USPS financial performance since the release of its “Delivering for America” plan is well ahead of projections. In addition, the economy has recovered to a much greater extent than had been planned and mail volumes are higher than projected. That improved performance, coupled with substantial relief in the form of a $10 billion grant from Congress puts the USPS in a relatively stable financial position. Given ample cash on hand, a delay of 5 months in imposing one of the largest increases in USPS history will make little difference to USPS finances in the short term but will be critical for the mailing industry to prepare and plan for the new rates.

Key takeaways from the report include:

1. The USPS report, “Delivering for America”, outlines a 10-year plan to reach financial stability and improve operational performance. Most of the Plan’s strategic initiatives align with its vision and mission however, the initiative to raise rates above CPI does not.

2. For the long run financial stability, USPS must retain its customer base and protect mail volume. It can achieve this by implementing predictable and low rate increases, which many mailers indicate is the single most important action the Postal Service can take to preserve business. In contrast, above-CPI rate increases will result in steep volume declines, as seen in the case of greeting cards.

3. The USPS 10-year plan is based on outdated assumptions about economic and USPS performance and needs to be revised. To date, the U.S. economy and market-dominant volume and revenue have far exceeded USPS projections. We expect FY2021 market-dominant revenue to outpace USPS projections by nearly $3B.

4. Under more realistic market-dominant volume assumptions and 1.5% annual rate increases, USPS can achieve financial stability by implementing all of its strategic initiatives except above CPI rate increases (and without implementing proposed August 2021 rate increases).

5. In our most conservative scenario, we expect that USPS can generate $1.8B over 10 years. This scenario generates $1.5B more than the USPS projection with above-CPI rate increases and much steeper volume declines.

“There is much in the USPS’s “Delivering for America” plan that GCA supports, “said White. “Our only area of major disagreement is the application of rate increases at a level that unnecessarily drives away customers. The NDP plan shows that USPS can achieve its goal of break-even financial stability while preserving a much greater portion of its customers. A 42% reduction in mail volume at the end of 10 years is not the best outcome for the USPS, its workforce, or the mailing industry, and greeting cards can be a driver of increased mail volume as Millennials enter their prime card-sending life stage. The three consecutive years of mailed greeting card volume growth, which was snapped in 2020 after the last huge rate hike, well demonstrates this opportunity.”
The GCA continues to advocate for the enactment of the legislative provisions in the “Delivering for America” plan and is working with USPS management to identify opportunities to grow the volume of greeting cards in the mail. It remains committed to ensuring that the USPS continues to fulfill its historic mission of binding the nation together through the provision of affordable, reliable universal service for mail and packages at least 6-days per week.

 

The GCA represents nearly 200 publishers and suppliers to the greeting card industry throughout the country. Its mission includes efforts to ensure a financially stable USPS that can provide
affordable, reliable 6-day universal service to the nation, facilitating the delivery by the USPS of our highly valued greeting cards.

The EMA represents 90 percent of the companies that make envelopes in North America. EMA strives to ensure there remains a level playing field between electronic and paper-based communications and works closely with state, national, and global legislative and regulatory authorities. EMA’s goal is to protect the industry and maintain its ability to compete in an open marketplace.

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The Effects of the Texas Deep Freeze on the Petroleum Feedstocks

WHY THE DEEP FREEZE SHUT DOWN TEXAS

WINTER STORM URI CRIPPLED THE POWER GRID

  • Texas is the largest producer of energy in the U.S., and it is a mostly deregulated, market-based system.
  • It is the only lower-48 state disconnected from the national power grid with the intention of avoiding federal regulations.
  • Texas cannot send power to another state; nor can it receive power from others.
  • The majority of Texas power is generated by natural gas-fired power plants.
  • Many power plants in the southern United States are not enclosed inside a building, with boilers and turbines exposed to the elements. This is by design. Leaving  key power plant infrastructure outside prevents excessive heat build-up during warmer periods but vulnerable in cold weather.
  • Feb 13-17, 2021, URI caused the whole state to experience record cold, preceded by ice storms, which were followed by snow.  Central Texas, for example, recorded the coldest temperatures in more than three decades and the most snow – about 6 inches – in more than seven decades.
  • Ice storms caused tree limbs to fall onto distribution lines, causing power outages.  Wind turbines were taken offline due to icing of their blades. Distribution of natural gas to power plants was shut-off or curtailed when key components in the gas system froze up.  Even a nuclear plant had a cold-weather-related failure.
  • The extreme cold caused a huge spike in demand for heat at the same time the power supply was collapsing.
  • The historic storm crippled the state’s power grid, causing widespread rolling blackouts to avoid a total meltdown of the power supply.
  • Petrochemical plants were given one hour to shut-down causing hard stops which damaged pipes, fittings, and pumps.
  • Trucks were stranded on the highways.  Their cargo, if not freeze thaw stable, froze solid.
  • Even 30 days later, some Gulf Coast plants are still assessing the damage and have not started production.
  • The petrochemical industry is a complex chain of interconnected chemistries.  Many complexes require a sequential start up.

Courtesy of Henkel Adhesives

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EMA Launches a New Website Design

July 30, 2020, Alexandria, VA – EMA has launched a redesign of their website, www.envelope.org.  The site now features a cleaner and more contemporary design.  The redesign includes aesthetic enhancements to provide a more engaging user experience and enhanced navigation to help visitors easily find the information needed.

EMA’s online presence includes EMA, GEA and the EMA Foundation.  The site fully integrates with EMA’s membership and event management system, which includes the membership database, the ability to purchase training materials and to register for events.  Members will also have access to a robust database of presentations and reports from the EMA, GEA and Foundation library.  Members will also be able to connect with one another via a link to their online engagement platform, EMA Connect.

In addition, visitors will be able to access membership applications and view listings of manufacturers and suppliers, frequently asked questions, envelope sizes, envelope shipments and sales, and other industry related information.

“I am excited to debut the newly designed website.  I think our members will appreciate the clean, modern design.  Through this relaunch, EMA strives as an industry leader to deliver consistent, relevant news and resources our members can use daily” said Kim Moses, Senior Director of Education, Meetings & Membership.

EMA redesigned the website to provide 24-hour access to information on activities and news around the industry. For more information, please contact Traci Brooks at 703-739-2200 or tbrooks@envelope.org.

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EMA’s 2019 U.S. Mailing Industry Report Reinforces Economic Powerhouse of Mailing Industry; 7.3 Million Jobs and $1.58 Trillion in Sales Reinforces Strength of Industry in a Digital Era

January 28, 2020, Alexandria, VA – The EMA Foundation’s Institute for Postal Studies has released EMA’s 2019 U.S. Mailing Industry Economic Job Study which reveals that the overall impact of the U.S. Mailing Industry remains strong. The study determined that approximately 7.3 million jobs and $1.58 trillion in sales revenue were associated with the U.S. Mailing Industry in 2018, the most recent year for which data is available. This includes employment at the U.S. Postal Service and the broader business industry like printers, publishers, packaging delivery companies and paper manufacturers that rely on USPS as a supply chain partner. The U.S. Mailing Industry is the backbone of the American economy. Therefore, significant postal reforms are needed to ensure a viable U.S. Postal Service (USPS) and U.S. Mailing Industry. Ensuring predictable and affordable postage rates for mailers is a critical component of postal reform. This rate stability will encourage advertisers and businesses to use the mail, which is an effective tool for their return on investment, and to drive much needed postage revenues for USPS.

Key report findings include:

  • The U.S. Mailing Industry’s 7.3 million jobs represent 4.6% of the nation’s total civilian labor force.
  • The U.S. Mailing Industry’s $1.58 trillion in sales revenue to the U.S. economy in 2018 accounted for 4.3% of U.S. total output of $37.1 trillion.
  • The U.S. Mailing Industry grew in revenue by $123.4 billion (9.5% gain) despite losing 209,288jobs (2.8% loss) during that same time period due to economic recovery and more packaged products being delivered through the mail stream.

Mailing industry revenue growth, combined with declining employment, points to growing industry productivity. “We are excited to release this report because it reinforces yet again how important the broader Mailing Industry is to the U.S. economy. Policies that have a dramatic influence on the USPS impact many workers. Over 5.8 million jobs or over 80% of mail industry jobs depend on the delivery infrastructure at which the USPS is the center.” says Cheryl Chapman, chairman of the EMA Foundation’s Institute for Postal Studies and product manager of International Paper Company. Peter Johnson, PhD, Principal, emergentMeasures Research, co-author of the study stated that “this study should surprise all who those who assume that digital is the only economic efficient media. With our study showing a jump in total sector revenues combined with a marked trimming of employment, the U.S. Mailing Industry is becoming a more efficient contributor to total U.S. output with each passing year.”This study analyzes the most recent information collected by the U.S. Bureau of Labor Statistics in its Occupation Employment Statistics program on employment by occupation and industry, the U.S. Census Bureau, the United States Postal Service, and the Department of Commerce Bureau of Economic Affairs. Jobs and economic activity associated with the Mailing Industry are grouped into three categories:

  1. Public and private sector companies that create mail, deliver mail and parcels, and provide retail delivery services
  2. Companies that send and receive mail & parcels as part of their everyday business operations
  3. Companies that sell products using mail advertising or use the Mailing Industry to deliver their products

The study is available on the EMA Foundation’s website at www.envelope.org or you can contact the Foundation office at 703-739-2200 or Maynard Benjamin, President and CEO at mhbenjamin@envelope.org. EMA is the world’s largest association devoted exclusively to the envelope manufacturing and paper-based communications industry.

About EMA

The EMA Foundation for Paper-Based Communications supports the paper-based communications industry by designing and implementing a key research and education agenda for companies in the envelope industry and the customers they serve.

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