Magazines dumping the Postal Service, dumping issues on doorsteps

Mail carrier delivering lettersIt's another nail in the Postal Service's coffin. Magazines are ripping a page from newspaper tradition and are ditching the U.S. Mail and contracting with cheaper delivery services to hand-deliver their issues. The change further dents our national mail's bottom line. It's also bringing back the paperboy.

Unfortunately, the switch to cheaper labor means customers may not be getting their money's worth anymore. In New York City, hand-delivery subscribers no longer receive their magazines in their mailboxes, safely behind locks, but instead find the latest issue left on the doorstep of their buildings, where theft and weather can take their swift toll.
Two major publications that have made the switch are The Week and the New York Observer. Steven Kotok, president of The Week, explained why his magazine has dumped the U.S. Mail in favor of hand delivery.

"It's really the oldest delivery method in the world," said Kotok, whose publication has been dabbling in hand delivery services for five years. According to Kotok, the Postal Service has been chipping away at the value of bulk rates to the point where magazines with medium-size subscription bases pay more than those with large numbers.

The bulk-rate changes, which went through in the Bush Administration, were widely criticized in 2007 as favoring big business over small business.

"Publishers of large magazines do all the lobbying, so they get the rules written," he said. The inequity of bulk postage rates slammed his budget. "We did a projection of postage rate increases, and the reality was so much worse than even our most extreme projections."

The result: If The Week had fully relied on the United States Postal Service, postage rates would have accounted for 20% of his magazine's total cost, including rent and payroll.

So Kotok's publication has turned to cobbling together cheaper delivery by finding services in several cities. Home delivery requires local knowledge, so there's not a national service. "If we did it in 10 different cities, that would be 10 different systems to set up," said Kotok. "We've talked with newspapers about tag-teaming with them."

So far, the lack of a national service has stymied a speedier switchover, but Kotok says that even the theft- and damage-prone doorstep method is preferable to the Postal Service, which despite skyrocketing rates is still notoriously unreliable. "We've had them lose a city's worth of magazines before," he said.

Currently, hand delivery is most cost-effective in high-density areas, while suburban and rural areas are better candidates for the increasingly antiquated Postal Service method. In New York City, The Week contracted with the Mitchell's service, and the publication may soon expand hand-delivery to Chicago and Los Angeles.

Areas of high-residential density are also more prone to theft, and delivery services don't have access to locked foyers and mailboxes, so issues are usually left lying unsecured outside apartment buildings. To compensate for loss, Kotok says his publication will switch customers to postal delivery if they request it.

When I called The Week's subscription-fulfillment contractor, I was told a switch to mailed delivery was not possible. Two weeks later, after my interview with Kotok, I telephoned the subscription line again and was permitted to switch.

The Observer wouldn't respond to WalletPop's requests for the logic behind its own switch from the Postal Service and whether it has adversely affected the successful receipt of issues by its subscribers.

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