Postal Service has bad news for small papers
Dependent on delivery to reach subscribers, publishers see mail issues with election and holiday deluge, and worker shortages in pandemic
Jeff Wagner hardly knew what to tell his delivery driver when the man returned one day in late December from a run to the post office in their northern Nebraska town with a trailer still full of newspapers.
The post office wouldn’t take them, the driver said, as it had every Tuesday for decades, because it was so stacked up with packages and delayed mail there was simply no room. Wagner, the president of Iowa Information, a regional printing press that publishes four newspapers and a handful of shopping pamphlets, then checked his messages, where he found at least a half-dozen complaints about late or missing newspapers.
The U.S. Postal Service has been under siege for months as record volumes of holiday packages and election mail ran up against a spike in coronavirus cases within its workforce, leaving the agency severely short-staffed. Nearly 19,000 workers were in quarantine at the end of 2020 after becoming infected or exposed to the virus, according to the American Postal Workers Union.
That has left hundreds of small publishers struggling to deliver their products, according to the National Newspaper Association, undercutting their advertising revenues and subscriber bases, and depriving the largely rural communities they serve of crucial news coverage. Some news operations have even called on reporters and editors to deliver papers.
They’re also staring down rate increases of as much as 9 percent in 2022 and for years thereafter. Mail service is already one of their biggest costs, industry insiders say, and such a scenario could force hundreds of small publications out of business given their already bite-size margins.
“These are little, tiny rural communities, and typically papers like mine are the only sources of information about that community,” said Brett Wesner, chairman of the National Newspaper Association and publisher of Wesner Publications, which includes 12 titles in Texas, Oklahoma and New Mexico. “Most don’t have digital coverage of any kind. Most don’t have radio stations. We are the source of community information, both in terms of covering community events but also the city council, the school board, the county commission. “So delays are concerning,” he said. “And people are willing to make allowances today for that but not forever.”
Newspapers have relied on the Postal Service since its founding 245 years ago. The first postmaster general, Benjamin Franklin, was himself a news publisher and the founder of several periodicals. Publishers like Wesner pay the Postal Service 22 to 36 cents for each copy it delivers, based on whether it’s staying within state lines. That’s at least 35 percent less than the cost of a letter, greeting card other first-class mail.
But the agency is poised to raise prices after losing $9.2 billion in 2020 due to steep, pandemic-related declines in mail volume. It also has $116.6 billion in liabilities, the bulk of which is tied to pension obligations. Leaders have long sought to raise new revenue and, in 2021, it’s slated to push through its first big postage rate increase in more than a decade.
The Postal Service will get an annual rate increase tied to inflation, plus a corresponding bump based on the growing number of delivery points mail carriers must visit six days a week. It can charge more each year when it begins paying down its liabilities (something it hasn’t done since 2011), and can charge 2 percent for each mail product that doesn’t cover its own costs.
For periodicals, mailing industry insiders say, the price changes could add up to nearly 9 percent compounded annually.
“That’s a scare for us,” said Tonda Rush, the National Newspaper Association’s director of public policy. “No one has the money to stomach those cost increases.”
Larger newspapers generally hire scores of part-time workers to deliver newspapers. The mail service is more cost-effective for smaller publications, which can rack up additional discounts by delivering them to postal facilities on their own and presorting items in the sequence of a letter carrier’s route, allowing postal workers to pick up the newspaper bundle and start their routines.
Still, postage is one of a local newspaper’s largest expenses, after payroll and newsprint. And when newspapers arrive late, there can be financial consequences: Advertisers demand refunds. Patrons cancel their subscriptions. And small newspapers — Wagner’s publications circulate to roughly 6,000 people — don’t generate much money from online ads.
Journalists at community papers often fill many roles: They write and edit their own copy, take photos and video, and layout pages, making it difficult to find new places to cut.
“The problem with most newspapers is that we’re willing to cannibalize ourselves in order to maintain our profit margins,” Wagner said.
Matt Paxton, fourth-generation publisher of the 6,000-circulation News-Gazette in Lexington, Va., said the delivery issues began over the summer. That syncs with cost-cutting underway at the mail service, where Postmaster General Louis DeJoy had ordered a crackdown on overtime hours, late and extra mail delivery trips, and other well-established measures.
DeJoy’s agenda sent delivery rates spiraling. By August, periodicals had an on-time rate of 69 percent, an eight percentage-point drop in a matter of weeks. Performance rebounded over the fall, then fell again during the holiday season. It stood at 54 percent the week of Dec. 12, the most recent Postal Service data available.
The Gazette-News has 550 subscribers who live outside the county, many scattered throughout western Virginia and along Interstate 81. As DeJoy’s changes slowed mail all over the country, including backlogs of more than a week in some processing facilities, readers started calling Paxton saying their papers were not arriving.
He or one of his reporters will frequently drive a new copy out to a subscriber’s home later in the day to find that not only did the resident not receive the newspaper — that person didn’t receive any mail.
Postal Service spokesman David Partenheimer wrote in an earlier emailed statement that the agency, “continues to face near-term pressure on service performance” because of holiday mail volume and employee shortages because of spiking coronavirus infections.