USPS delays, postage price increase are threatening small-town newspapers

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% 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, chair 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% 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% 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% 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.

The plight of the news industry is well-documented: The rise of the Internet in the 1990s gutted a business model that had largely gone unchanged for generations. News organizations tightened their belts by cutting editions, producing thinner papers and laying off staff.

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 new 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%, 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% 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 at all.

Postal Service spokesman David Partenheimer wrote in an emailed statement that the agency, like the rest of the shipping sector, “continues to face near-term pressure on service performance” because of holiday mail volume and employee shortages because of spiking coronavirus infections.

“Amid the historic volume, the Postal Service continues to flex its network, including making sure the right equipment is available to sort, process and deliver a historic volume of mail and packages this holiday season,” Partenheimer wrote. “Our entire operations team, from collections, to processing to delivery, worked throughout this past weekend and continues to work around-the-clock to address the historic volume.”

As the delays mounted, Wagner started calling advertising clients offering them free ad space in future editions. His printing facility also produces 75 other regional and national newspapers; he called those clients to explain the issues.

Some of Wesner’s readers got three weeks’ worth of papers delivered on the same day. He’s spoken with local postal officials about the problems, but they’ve told him there’s not much they can do. Plus, it’s not like they haven’t noticed, Wesner said. They live in the small towns within his coverage area, and frequently are not getting their papers either.

“I think they’re trying,” Wesner said, “but with this quarantine and people getting sick, in these rural communities, you don’t have a staff of 500 (at the post office). The staff is tiny. You have people out, you’re in trouble. I don’t know of any recourse that we have. But if it does go on, we will find a recourse.”

“I’m not trashing the local post offices,” he added. “Those people are heroes. This is a systemic problem that they are, for the most part, trying to deal with.”