U.S. Postal Service: Mail-Related Recycling Initiatives and Possible Opportunities for Improvement
Published: 2008-06-03T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2006, the U.S. Postal Service (USPS) discarded about 317,000 tons of undeliverable-as-addressed advertising mail. Such mail can be disposed of using incineration, landfills or through other methods. USPS recently committed to minimizing the agency's impact on every aspect of the environment. Recycling undeliverable advertising mail can help USPS achieve this commitment, while generating revenue and reducing its costs and financial pressures. In response to the 2006 Postal Accountability and Enhancement Act, this report addresses (1) recent mail-related recycling accomplishments (initiatives) undertaken by USPS, the mailing industry, and others and (2) additional recycling opportunities that USPS could choose to engage in, or influence mailers to undertake. To conduct this study, GAO analyzed relevant data and documents, visited USPS and other facilities, and interviewed about 40 stakeholders.
section_title: What GAO Found
paragraphs: USPS and the mailing industry have undertaken numerous initiatives to increase (1) the recycling of mail-related materials and (2) the amount of mail with environmentally preferable attributes, such as mail that uses recycled paper. USPS has five key recycling-related initiatives underway. For example, USPS recently established annual goals to increase its revenue from mail-related recycling from $7.5 million to $40 million from fiscal years 2007 to 2010. However, by excluding savings that result from lower waste disposal costs--which accompany increased recycling--the goals do not reflect the full financial benefit attributable to mail-related recycling. USPS also has launched a pilot recycling program in New York City, but it is not known whether USPS will require its managers elsewhere to adopt applicable "lessons learned" from the pilot. Representatives of the mailing industry and other stakeholders also have undertaken a wide range of initiatives to, among other actions, increase the amount of mail that is recycled. For example, three mailing industry associations recently introduced separate awareness campaigns to encourage mail recipients to recycle their catalogs, envelopes, and magazines. In addition, the Direct Marketing Association--whose members collectively send about 80 percent of all Standard Mail--is undertaking several initiatives, including an effort to encourage mailers to use environmentally preferable mail attributes. USPS, mailing industry, and other stakeholders GAO interviewed identified five opportunities that USPS could choose to undertake to increase its recycling of mail-related materials and to encourage mailers to increase the amount of mail with environmentally preferable attributes. The five opportunities stakeholders cited most frequently were for USPS to: (1) implement a program for recognizing mail-related recycling achievements; (2) increase awareness among mail recipients that mail is recyclable and encourage them to recycle their mail; (3) collaborate with parties interested in increasing the supply of paper fiber available for recycling; (4) establish a special, discounted postal rate--or "Green Rate"--as a means of inducing mailers to adopt environmentally preferable attributes; and, (5) initiate a "mail take-back" program in locations that do not have access to municipal paper recycling. Each of these opportunities appears to be consistent with the agency's long-standing commitment to environmental leadership and the Postmaster General's recent commitments to minimize the agency's impact on every aspect of the environment and to act as a positive environmental influence in U.S. communities. Based on GAO's analysis, however, USPS would need to assess several factors including cost, feasibility (including logistical considerations), and mission compatibility in deciding whether to adopt these opportunities. For example, depending on the magnitude of variance between the expected costs and revenues, USPS may find implementing one or more of the opportunities unacceptable. This is, in part, because USPS faces multiple short- and long-term pressures in improving its operational efficiency, increasing its revenues, and controlling its costs--some of which are increasing faster than the overall inflation rate.

section_title: Letter
paragraphs: During fiscal year 2007, United States Postal Service (USPS) customers  sent approximately 104 billion pieces of mail (mailpieces) as Standard  Mail, the primary class of mail used for advertising. Over time, most of  these mailpieces were presumably discarded as waste. Depending on how  the discarded mailpieces are disposed of, they could be recycled, placed  into landfills, or incinerated. The U.S. Environmental Protection Agency  reports that during 2006, Standard Mail comprised about 2.3 percent (5.9  million tons) of all municipal solid waste. Of this amount, recycling efforts  captured about 39 percent, while landfills or incinerators received the  remaining quantity. USPS discarded about 6.1 billion undeliverable-as- addressed (UAA) Standard Mail mailpieces (about 317,000 tons) in 2006,  while mailers discarded the remainder. With the exception of UAA  Standard Mail, the responsibility for recycling discarded mail primarily lies  with mail recipients.
USPS, which receives only a small portion of its funding from federal  appropriations, is expected to generate sufficient annual revenue to cover  its costs. In fiscal year 2007, however, USPS’ operating costs exceeded its  revenues by over $5 billion, largely due to the agency’s advance payments  for retiree health benefits. Furthermore, USPS expects to incur substantial  additional costs that will need to be offset by revenue increases and  improved operating efficiencies. USPS has reported that mixed paper (i.e.,  UAA mailpieces, including newsprint, and mail discarded by recipients in  postal facility lobbies) account for up to 70 percent of its waste stream.  Recycling these materials provides USPS with a means to generate  substantial revenues, significantly reduce its waste disposal costs, and  improve its financial position. In addition, because recycling discarded  mail-related materials results in a variety of environmental benefits,  including reductions in the amount of mail incinerated or placed in  landfills, recycling these materials provides USPS with a means to  enhance its long-standing commitment to environmental leadership.
During fiscal year 2007, revenue generated from Standard Mail comprised  about 28 percent ($20.8 billion) of USPS’ total revenue, and Standard Mail  constituted the largest class of mail by volume (about 49 percent of 212  billion mailpieces). The prevalence of Standard Mail is expected to  increase, in part, because businesses, non-profit organizations, and others  view it as an effective way to (1) provide consumers with information  about their products and services and (2) solicit contributions from mail  recipients. Some critics, however, view Standard Mail as an annoyance  that also poses identify theft concerns and negatively impacts the  environment. In response, numerous state legislatures introduced “Do Not  Mail” bills that, if enacted, would require mailers to remove registered  individuals from their mailing lists (similar to the national “Do Not Call”  registry).
In response to the 2006 Postal Accountability and Enhancement Act and  agreements reached with relevant congressional offices, this report  addresses (1) recent mail-related recycling accomplishments (initiatives)  undertaken by USPS, the mailing industry, and others and (2) additional  recycling opportunities that USPS could choose to engage in, or influence  mailers to undertake. Pursuant to our legislative mandate, we issued a  report on our interim results on December 20, 2007. This report updates  our interim report and describes in more detail the key recycling initiatives  that recently have been undertaken by USPS, the mailing industry, and  other stakeholders. These initiatives include efforts to recycle mail-related  materials, including UAA Standard Mail, and to increase the amount of  mail with environmentally preferable attributes. Mail with environmentally  preferable attributes includes mail that (1) contains paper with recycled  paper fiber (recycled paper); (2) uses paper from responsibly-managed  forests (certified paper); (3) is designed to use materials efficiently, (such  as “two-way” envelopes); (4) is accurately addressed for delivery; and (5)  is targeted to mail recipients who may wish to receive it. This report also  describes additional stakeholder-identified opportunities for USPS to  engage in (or influence mailers to undertake) mail-related recycling  initiatives, and identifies factors such as cost; feasibility, including  logistical considerations; and mission compatibility that USPS would need  to assess prior to adopting the opportunities.
To accomplish our objectives we, among other activities, (1) interviewed a  wide range of USPS officials and stakeholders from about 40 other  organizations, including representatives from mailing, paper recycling, and  environmental advocacy organizations; (2) toured various facilities,  including USPS facilities in Baltimore and Philadelphia, a paper recycling  facility, and a printing facility; (3) attended meetings of the “Greening the  Mail Task Force”—a committee of USPS, mailing industry, and other  stakeholders that addresses environmental issues regarding the mail; and  (4) reviewed and analyzed relevant documentation. We discussed matters  related to recycling several classes of mail with stakeholders; however, we  primarily focused on Standard Mail because of (1) its increasing  prominence in the mail stream; (2) its contribution to the municipal solid  waste stream; (3) USPS’ responsibility for discarding large volumes of  UAA Standard Mail; and (4) the issues critics cite related to Standard Mail,  which are reflected in numerous “Do Not Mail” state legislative initiatives.  While there are a variety of ways to consider the environmental impacts of  mail, this report focuses on the role recycling plays in eliminating mail and  mail-related materials from municipal solid waste, increasing USPS’  revenue, decreasing USPS’ waste disposal costs, and enhancing USPS’  commitment to environmental leadership. Appendix I provides a more  detailed explanation of our scope and methodology.
We conducted this performance audit from April 2007 to June 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: As the primary mail carrier in the United States, USPS’ mission is to  provide the nation with affordable and universal mail service. USPS’  authority was revised on December 20, 2006, with the enactment of the  Postal Accountability and Enhancement Act. Through this act, Congress  provided USPS with tools and mechanisms to help ensure that USPS is  efficient, flexible, and financially sound. The act also introduced a rate cap  for many postal services. While Congress oversees USPS and provides  direction to the agency on its operations and other matters, USPS receives  only a small portion of its funding from federal appropriations.
According to a 2001 Mailing Industry Task Force study, the mailing  industry includes businesses, organizations, and other parties (mailers)  that send and rely on mail to maintain contact with their customers. The  mailing industry also encompasses mail preparers, including printers and  businesses that send or receive mail on behalf of a third party. Vendors  and suppliers of the hardware, software, and labor related to mail  processing, such as companies who help mailers improve the accuracy of  their mailing lists, also are included in the mailing industry, according to  this study.
USPS offers several classes of mail, including First-Class, Standard, and  Periodical Mail. The price for each class of mail varies, as does the level of  service that USPS provides. Mailers, including both household and  business customers, use First-Class Mail when sending personal mail and  personalized business correspondence, such as letters, greeting cards,  bills, and account statements. Mailers also may use First-Class Mail to  send advertisements and merchandise. Standard Mail is the primary mail  class for advertisements sent in bulk quantities and cannot be used for  sending personal correspondence, such as handwritten letters, bills, or  account statements. Periodical Mail primarily is comprised of newspapers  and magazines. Standard Mail rates are generally lower than First-Class  Mail rates, in part, because USPS typically does not provide services such  as return-to-sender and forwarding for UAA Standard Mail.
USPS and the mailing industry view Standard Mail as an important  advertising medium for businesses, non-profit organizations, and other  parties who seek to inform mail recipients about their products and  services or to solicit contributions. While USPS currently receives about  half of its revenue from First-Class Mail, Standard Mail became the largest  class of mail (by volume) in fiscal year 2005. During 2005, mailers spent  about $56.6 billion on direct mail advertising—comprising about 21  percent of all U.S. expenditures for advertising. USPS expects the volume  of Standard Mail to continue to grow.
UAA mail is mail that USPS cannot deliver to a specified address due to an  incomplete, illegible, or incorrect address or insufficient postage, among  other reasons. USPS’ treatment of UAA mail depends on the mail class.  USPS forwards UAA First-Class Mail to the addressee, returns it to the  sender, or, if the return address is missing, sends it to a USPS Mail  Recovery Center. In general, USPS retains UAA Standard Mail and treats  it as waste. Because of the large volume of UAA Standard Mail that USPS  discards annually (about 317,000 tons in 2006), USPS focuses most of its  mail-related recycling efforts on this material. USPS also treats the mail  discarded by recipients in postal facility lobbies (discarded lobby mail) as  waste. While USPS does not know how much mail post office box holders  and other recipients discard in its lobbies, a USPS official stated that the  amount is “trivial” relative to its total volume of mail-related waste.
USPS has reported that mixed paper (i.e., UAA mailpieces, including  newsprint, and discarded lobby mail) accounts for up to 70 percent of its  waste stream. According to USPS, these materials can be used to make  everything from low-grade paper products, such as hand towels and tablet  backings, to wallboard and stock for fuel pellets that can be burned with  coal to reduce harmful air emissions. Furthermore, according to the  agency, the large volume of its UAA mail is an attractive and reliable  source of clean mixed paper needed for manufacturing these and other  products.
A USPS-sponsored study reported that in fiscal year 2004, UAA mail cost  the agency more than $1.8 billion, which represented about 2.6 percent of  USPS’ total expenses (approximately $69 billion). About two-thirds of  UAA mail costs resulted from forwarding mail to the intended recipients  ($422 million—23 percent) or returning it to the sender ($822 million—44  percent). The remaining one-third of UAA mail costs are the result of  processing waste ($270 million—15 percent), correcting addresses ($197  million—10 percent), processing address change requests ($132 million—7  percent), and general administration and support ($24 million—1 percent).  Furthermore, according to USPS, creating and sending mail that cannot be  delivered costs businesses more than $2 billion annually.
With the exception of UAA Standard Mail, the responsibility for recycling  discarded mail primarily lies with mail recipients. While the majority of  mail is recyclable, according to the Environmental Protection Agency,  mail recipients and others recycled only about 39 percent of the Standard  Mail they received and subsequently discarded in 2006. Studies find that  the volume of products recycled depend on, among other matters, whether  a recipient knows that a product is recyclable and whether the recipient  has access to a recycling program or facility. According to one study, over  40 percent of the public are unaware that it can recycle mail. Numerous  stakeholders we interviewed confirmed this lack of recycling awareness.  Even if individuals are aware that mail is recyclable, according to a 2005  survey conducted by the American Forest and Paper Association,  residents in about 31 percent of U.S. communities (14 percent of the  population) do not have access to paper recycling programs. In addition,  while a 2006 survey by the Federal Trade Commission found that only a  small number of victims (2 percent) reported that the theft of their identify  was connected to the mail, several stakeholders told us that identity theft  concerns prevent some recipients from recycling their mail. In December  2006, we reported on efforts to increase the volume of materials recycled  and found that, to increase recycling, U.S. municipalities need to conduct  public education campaigns and ensure that access to recycling is both  convenient and easy. Further, we identified federal policy options that  would help municipalities increase the volume of materials recycled,  including the establishment of (1) a nationwide education campaign to  inform the public about recycling and (2) programs that enable consumers  to recycle products by returning them to the manufacturer or some other  party for recycling. These programs are known as “take-back” programs.
USPS and the mailing industry formed a Greening the Mail Task Force in  1996 to identify cost-effective ways to integrate environmental  considerations into mailing practices and business processes. The task  force issued a final report of its activities in 1999, including its efforts to  identify “green” mail attributes (environmentally preferable attributes).  According to the task force, environmentally preferable mail includes,  among other attributes:    Mail that contains recycled paper.
Mail that uses certified paper.
Mail that is designed to use materials efficiently (such as “two-way”  envelopes).
Mail that is accurately addressed for delivery.
Mail that is targeted to recipients who may wish to receive it.
USPS’ Environmental Policy and Programs organization is principally  responsible for increasing the agency’s recycling of mail-related materials  and is the focal point for executing its environmental policy throughout  the agency. USPS also has organizations that, among their other  responsibilities, attempt to increase the amount of mail with  environmentally preferable attributes. For example, Address  Management’s goal is to decrease the amount of UAA mail. To accomplish  this, the organization provides mailers with tools to better manage the  quality of their mailing lists while, according to USPS, striving to maximize  its ability to efficiently deliver mail as addressed. The Product  Development organization within Marketing helps manufacturers develop  mail-related products that contain recycled materials. Finally, USPS’ Sales  organization—also within Marketing—promotes the use of environmental  preferable attributes in direct mail advertising and in USPS shipping  materials.
section_title: USPS and the Mailing Industry Have Undertaken Numerous Mail- Related Recycling Initiatives
paragraphs: USPS and the mailing industry have undertaken numerous initiatives to  increase the recycling of mail-related materials and increase the amount of  mail with environmentally preferable attributes. For example, USPS has  undertaken five key mail-related recycling initiatives, including the  establishment of annual goals to increase its recycling revenue from $7.5  million in fiscal year 2007 to $40 million in fiscal year 2010 and a pilot  recycling program in New York City. Representatives of the mailing  industry and other stakeholders also have undertaken a wide range of  initiatives to, among other actions, increase the amount of mail that is  recycled. For example, three mailing industry associations recently  introduced separate recycling awareness campaigns to encourage mail  recipients to recycle their catalogs, envelopes, and magazines. In addition,  the Direct Marketing Association—whose members collectively send  about 80 percent of all Standard Mail—is undertaking several initiatives,  including an effort to encourage mailers to use environmentally preferable  mail attributes.
subsections: section_title: USPS Has Undertaken Five Key Initiatives to Increase Its Recycling of Mail- Related Materials
paragraphs: USPS has undertaken five key initiatives to increase its recycling of mail- related materials. Specifically, USPS recently (1) established goals for  increasing its recycling revenue; (2) refocused its attention on  environmental matters, including mail-related recycling, and intends to  require recycling where cost-effective and feasible; (3) consolidated waste  management contracts to generate increased recycling revenues and  reduce its waste disposal costs; (4) launched a pilot recycling program in  New York City; and (5) implemented tools to track the environmental  performance of its areas and districts. While USPS recently established  goals for increasing its recycling revenues, inconsistencies in the way  USPS collects data, if not resolved, will hamper efforts to measure its  progress in meeting these goals. Furthermore, at the conclusion of our  review, it was not clear whether, or to what extent, USPS would require its  managers at other facilities to adopt—where applicable, feasible, mission  compatible, and appropriate in view of cost and other considerations— lessons learned from its New York City pilot.
subsections: section_title: USPS Established Goals for Increasing Its Recycling Revenue, but Inconsistencies in the Way It Collects Data, If Unresolved, Will Hamper Efforts to Measure Its Progress
paragraphs: In March 2008, USPS established annual goals for increasing the $7.5  million it generated from recycling mail-related materials in fiscal year  2007. Specifically, USPS intends to generate $15 million in mail-related  recycling revenue in fiscal year 2008, $30 million in fiscal year 2009, and  $40 million in fiscal year 2010. According to USPS, reaching its fiscal year  2010 goal could also reduce its solid waste disposal costs by $10 million  annually. Thus, in fiscal year 2010, USPS could realize a full financial  benefit of $50 million. To help reach its initial fiscal year 2008 goal,  according to USPS officials, each of the agency’s nine geographic areas  developed a plan to generate $2 million from recycling in fiscal year 2008.  Longer term, according to these officials, the $40 million goal for fiscal  year 2010 is based on the expectation that each of its 82 districts will  generate an average of about $500,000 in recycling revenues.
Such goals are a step in the right direction and address the need for USPS  to generate additional revenue, which is one of the agency’s four strategic  goals. However, by excluding savings that result from lower waste  disposal costs, the goals do not reflect the full financial benefit attributable  to mail-related recycling. This is because when USPS facility managers  implement mail-related recycling programs, their facilities generate less  waste, thereby reducing the facilities’ waste disposal costs (in addition to  generating recycling revenue). Revising the agency’s goals to include the  savings from lower waste disposal costs or adopting additional goals to  reflect the full financial benefit of recycling would help focus USPS  employees on the need to achieve greater cost reductions—consistent  with a second USPS strategic goal. According to USPS officials, USPS is  developing the capacity to track solid waste disposal volumes and intends  to develop a plan for achieving its recycling goals. However, at the  conclusion of our review, it had not agreed to revise its goals or to adopt  additional goals for measuring its savings from lower waste disposal costs  to reflect the full financial benefit attributable to mail-related recycling.
Regardless of whether USPS finds it beneficial to revise its goals to reflect  the full financial benefit attributable to mail-related recycling, in order to  measure its progress, USPS will need to (1) specify how it will measure its  progress toward its goals and (2) ensure that its organizations collect and  report accurate, reliable, and consistent data, which, according to agency  officials, does not presently occur. For example, according to both USPS  officials and our analysis of USPS documentation some district facilities  combine recycling revenues with waste disposal costs. Additionally, our  analysis of USPS documentation indicates that in fiscal year 2006 at least  one large district facility combined recycling revenues with waste savings  attributable to recycling—which, together, comprise the full financial  benefit of recycling. Inconsistent reporting practices hamper efforts to  accurately measure the agency’s progress in meeting its recycling revenue  goals. To partially address this problem, in March 2008, the agency’s  accounting organization sent an e-mail to USPS area managers requesting  that they report recycling revenues separately from waste disposal costs.  While this request addresses the need to report recycling revenue  separately, it does not constitute a requirement for the managers at the  area-, district-, or facility-level to do so. Furthermore, the e-mail does not  address matters related to the reporting of USPS’ savings from lower  waste disposal costs, or require these managers to report data on their  savings using a consistent method. Finally, at the conclusion of our  review, USPS had neither (1) specified how it will measure progress  toward its goals nor (2) required its organizations to collect and report  accurate, reliable, and consistent data. Without taking further action,  USPS may not be able to accurately assess its progress toward meeting its  goals—regardless of which goals it eventually adopts.
section_title: USPS Recently Refocused Its Attention on Environmental Matters, including Mail-Related Recycling, and Intends to Require Recycling Where Cost- Effective and Feasible
paragraphs: While USPS has had a mail-related recycling program in place since the  1990s, security concerns arising from the introduction of anthrax in the  mail stream in 2001 caused USPS to deemphasize recycling until recently,  according to USPS officials. In December 2007, however, USPS announced  its intention to refocus its attention on environmental matters, including  the recycling of UAA mail and mail-related materials. According to USPS,  recycling will help protect the value of Standard Mail as a form of  advertising, generate additional revenues, and reduce USPS’ waste  disposal costs. Recycling UAA mail and other mail-related materials also  provides USPS with a means to enhance its long-standing commitment to  environmental leadership. Furthermore, recycling these materials appears  to be consistent with the Postmaster General’s recent commitments to  minimize the agency’s impact on every aspect of the environment and to  act as a positive environmental influence in U.S. communities.
As part of its refocused attention on environmental matters, in July 2007,  USPS issued a revised policy—termed a Management Instruction—that  addresses its waste management issues. With respect to recycling, the  policy encourages district managers and installation heads to establish  recycling programs to collect UAA mail and discarded lobby mail in  central locations. While the policy indicates that employees at USPS’  plants and post offices “should recycle” these mail-related materials, they  are not required to do so if it is not cost-effective or logistically feasible.  For example, according to USPS officials, recycling may not be cost- effective or logistically feasible at facilities that lack storage space or  generate a limited quantity of recyclable mail-related materials.
The July 2007 policy superseded USPS’ previous policy and guidelines,  issued in September 1995, which (1) were specific to recycling mail- related materials and (2) provided significantly more guidance on  recycling UAA mail, discarded lobby mail, and facility paper waste. In  addition, while not explicitly stated, the 1995 policy “technically required”  facility managers to implement mail-related recycling programs at all  USPS facilities that generate these types of waste, according to agency  officials.
According to the prior policy, effective targeting of UAA mail can achieve  many objectives. For example, it “can help meet postal waste reductions  goals and implement more efficient and environmentally sound  alternatives to solid waste disposal practices.” In addition, the 1995 policy  noted that such an “effort saves  money in solid waste disposal and  reduces criticism that third-class  mail volumes contribute  to municipal solid waste problems.” Finally, according to the prior 1995  policy, recycling UAA mail also enhances the viability of Standard Mail as  an environmentally friendly advertising medium. To help USPS accomplish  these objectives, the 1995 policy required facility managers to (1) keep  records of revenues generated by recycling, as well as the costs and  quantities of solid waste generated at their facilities; (2) conduct an annual  evaluation of their practices related to discarded mixed paper, disposal  methods, and recycling alternatives; and (3) supply information on their  annual evaluations, including the costs, volumes, disposal methods,  recycling alternatives, and barriers associated with implementing a mail- related recycling program at their facilities to his or her district manager.  The prior policy also established others responsibilities. For example, area  managers were responsible for ensuring that facilities that generate UAA  mail conducted the annual evaluations and for assisting district managers  in finding markets for the material. USPS’ latest policy, issued in 2007,  does not address these and other matters.
During the course of our work, we discussed differences between the two  policies with USPS officials, including the requirement for an annual  evaluation of facility practices related to discarded mixed paper.  According to USPS officials, the omission of this requirement was  unintended. To address this omission as well as others, the officials  indicated that USPS would develop a new policy that will, among other  things, (1) provide employees with specific information on how to  implement recycling programs at their facilities, (2) require USPS facility  managers to implement mail-related recycling initiatives unless doing so is  not cost-effective or logistically feasible, and (3) specify requirements for  reporting data on USPS’ mail-related recycling activities. USPS expects to  release its revised policy, as well as guidance for implementing its  recycling program, later this year.
section_title: USPS Consolidated Contracts to Increase Its Recycling Revenue and Reduce Its Waste Disposal Costs
paragraphs: To increase its recycling revenues and reduce its waste disposal costs,  USPS began a multi-phased process to consolidate its waste disposal and  recycling contracts at USPS facilities nationwide. In the first phase,  completed in January 2006, USPS centralized its negotiation and  management of all waste disposal and recycling contracts at the Memphis,  Tennessee, Category Management Center (Memphis Center). In the  second phase, which recently began, the Memphis employees are working  with managers at facilities with existing waste disposal and recycling  contracts and are attempting to convince these managers to incorporate  their facilities within larger, regionally-based USPS waste disposal and  recycling contracts. Such contract consolidations are consistent with our  prior findings. Specifically, in 2004, we reported that consolidating  contracts allows private-sector companies to leverage their buying power  and identify more efficient ways to procure goods and services.
The Memphis Center offers facility managers four types of contracts: (1)  waste disposal only; (2) removal of recyclables only; (3) removal of waste  and recyclables; and (4) Total Solid Waste Management contracts, which  cover both waste disposal and recycling. In fiscal year 2007, the four  types of contracts managed by the Memphis Center resulted in  approximately $6.6 million in recycling revenues (about $6 million) and  waste disposal cost savings (about $600,000).
Total Solid Waste Management contracts attempt to both (1) maximize  recycling revenues and (2) minimize waste disposal costs by using two  methods to collect and transport mail-related recycling materials. The first  method—“backhauling”—uses USPS’ labor and existing transportation  network to collect and transport mail-related recyclable materials from  local USPS facilities (e.g., post offices) to a single USPS location, such as a  mail processing and distribution center, where the materials are  consolidated prior to USPS’ subsequent delivery to a paper mill or other  vendor interested in purchasing the materials. When consolidation at a  single USPS facility is not feasible, USPS uses a second method—“milk  runs”—to collect its recyclable materials. Milk runs use contractors, such  as paper brokers and other vendors, to collect recyclable materials stored  at local USPS facilities and transport them to their destination. USPS  officials stated that because the contractor uses its resources, including its  labor and transportation, to collect and transport the materials, USPS must  pay for these services—a factor that reduces both USPS’ recycling  revenues and its savings from lower disposal costs.
Total Solid Waste Management contracts may include a shared savings  component with the contractor, whereby the contractor receives a portion  of USPS’ recycling revenues and savings from lower waste disposal costs.  Cost-sharing arrangements are intended to encourage the contractor to  implement initiatives that maximize USPS’ recycling revenues while  minimizing its waste disposal costs. One example of such a contract is  USPS’ contract with Rand-Whitney, which covers 457 facilities throughout  Pennsylvania. Rand-Whitney developed a recycling program for each  facility that, according to documentation supplied by USPS, generated  $177,000 in recycling revenues and reduced USPS’ waste disposal costs by  $98,000—for a total financial benefit of $275,000 from July 2006 to June  2007. Because this contract allows Rand-Whitney to share USPS’ revenues  and savings, Rand-Whitney received 25 percent of this total, or  approximately $69,000, during the 12-month period.
section_title: USPS Launched a Pilot Recycling Program in New York City
paragraphs: In an attempt to demonstrate the value of mail-related recycling programs,  USPS began a pilot program in New York City in May 2007. The goal of the  pilot—termed “New York City SOARs!” (Saving of America’s Resources)— is to identify opportunities to establish and expand recycling programs in  USPS facilities throughout New York City and, based on lessons learned,  identify recycling practices that can be used in other USPS facilities.  USPS is implementing the pilot in stages. The first stage assessed postal  recycling activities underway in each of New York City’s five boroughs,  using a variety of factors, such as costs to USPS, feasibility (including  logistical considerations), and mission compatibility. The report on the  assessment, issued in September 2007, concluded that recycling in New  York City (1) can generate recycling revenues, (2) will substantially reduce  USPS’ waste disposal costs, (3) will not interfere with postal operations,  and (4) will require only a “modest incremental” effort to accomplish.
Based on the results of the first stage, the report suggested specific  recycling activities in each borough, including: (1) the initiation of  backhauling recycling programs for UAA Standard Mail and mail-related  materials in Manhattan, Brooklyn, and the Bronx, and the expansion of the  existing backhauling program in Queens; (2) the implementation of milk  runs for UAA Standard Mail and mail-related materials in Staten Island; (3)  the designation of sufficient loading dock space at USPS processing and  distribution centers in Manhattan to accommodate trailers for storing and  transporting mail-related recycling materials; and (4) the establishment of  recycling programs for discarded lobby mail in all five boroughs.  According to USPS, it is optimistic that, by carefully implementing and  enhancing mail-related recycling programs throughout New York City, it  could generate approximately $1.3 million per year in recycling revenues  and save an additional $800,000 in waste disposal costs.
The pilot’s second stage began in January 2008 and, in February 2008,  according to USPS officials, the agency issued a solicitation for a contract  to provide waste disposal and recycling services to USPS facilities in four  of New York City’s five boroughs—Brooklyn, the Bronx, Manhattan, and  Queens. USPS expects the contract will begin in October 2008. This pilot is  in its early stages and, at the conclusion of our review, USPS did not have  a plan or timeline for, among other actions, ending the pilot program or  issuing a final report on the pilot. Furthermore, it was not clear whether,  or to what extent, USPS would require its managers at other facilities to  adopt—where applicable, feasible, mission compatible, and appropriate in  view of cost and other considerations—lessons learned from the pilot.
section_title: USPS Has Implemented Tools to Track the Environmental Performance of Its Areas and Districts
paragraphs: USPS also has implemented tools for tracking the environmental  performance of its areas and districts. One such tool, called an  “environmental scorecard,” tracks and ranks the environmental  performance of USPS’ nine geographic areas. In fiscal year 2007, USPS  used the tool to collect information needed to rank each area’s  environmental performance in 12 general areas, such as pollution  prevention, that includes recycling. To measure environmental  performance at the district level, USPS also created a budgetary line-item  for tracking each district’s recycling revenues.
USPS plans to share the results of both its environmental evaluation tool  and its analyses of the districts’ recycling revenues (from the budgetary  line-item) with its postal managers. Because USPS officials believe that the  agency’s employees are highly competitive, according to USPS officials,  relative differences between the areas and districts are expected to foster  competition and increase recycling revenues throughout the postal  network. While USPS currently does not use the results of the  environmental evaluation tool or its analyses of the districts’ recycling  revenues for recognizing significant mail-related recycling achievements,  according to USPS officials, USPS could choose to do so in the future. In  the interim, according to these officials, USPS (1) is considering  establishing a program to nominate facilities, teams, and individuals for  environmental excellence in seven environmental categories—one of  which includes recycling—and (2) has changed its accounting policy to  allow districts to receive credit for the revenue each district generates  from recycling.
section_title: USPS Has Undertaken Two Multi-Faceted Initiatives to Increase the Amount of Mail with Environmentally Preferable Attributes
paragraphs: To increase the amount of mail with environmentally preferable attributes,  USPS has undertaken two multi-faceted initiatives. Specifically, USPS (1)  initiated a second Greening the Mail Task Force to, among other activities,  promote the use of environmentally preferable attributes in mail and (2)  established a UAA mail cost reduction goal. It also has numerous actions  underway that may help the agency meet its UAA mail cost-reduction goal.  Such actions include USPS’ implementation of a new mail processing  method that identifies and redirects incorrectly addressed mail to the  intended addressee before delivery is attempted. USPS also has taken  other actions to increase the amount of mail with environmentally  preferable attributes. We discuss these actions in appendix II of this  report.
section_title: USPS Initiated a Second Task Force to Increase the Amount of Environmentally Preferable Attributes in Mail
paragraphs: In September 2007, USPS initiated a second Greening the Mail Task Force  to, among other goals, increase the amount of mail with environmentally  preferable attributes. As discussed earlier, USPS disbanded the first task  force in 1999 after it issued a final report that, among other matters,  identified environmentally preferable attributes associated with mail. The  most recent task force—formed to address mail-related issues on a long- term basis—includes USPS officials, mailing industry representatives, and  other stakeholders. The task force has five subcommittees, each with a  different goal. Table 1 identifies each of the subcommittees’ relevant goals.
USPS established a UAA mail cost-reduction goal in 2006 and has  developed numerous tools that mailers can use to improve the accuracy of  their mailing lists and reduce the amount of UAA mail they send. More  recently, USPS introduced two new requirements that are expected to help  USPS meet its UAA mail cost-reduction goal. In addition, USPS has  implemented a new mail processing method that identifies and redirects  incorrectly addressed mail to the intended addressee before delivery is  attempted.
USPS Established a UAA Mail Cost-Reduction Goal  In addition to its recent establishment of goals for increasing the revenue  USPS generates from recycling mail-related materials, in 2006, USPS set a  goal of reducing UAA mail by 50 percent by fiscal year 2010. In the  summer of 2007, USPS clarified this goal, specifying that it applied to the  cost—not the volume—of UAA mail. USPS is developing measures to  accurately assess its progress in meeting the UAA mail cost reduction goal.  According to USPS, its interim measures are not sufficient for this  purpose; however, USPS officials believe that data from its May 2009  deployment of Intelligent Mail, which we discuss later in this report, will  provide data needed to accurately measure its progress in meeting this  goal.
USPS’ Tools for Improving the Accuracy of Mailing Lists Reduce  UAA Mail  USPS has developed numerous tools that mailers can use to increase the  amount of mail that is accurately addressed for delivery. Mail that is  accurately addressed decreases UAA mail volume, which, in turn,  decreases USPS’ operational and waste disposal costs. Since these address  accuracy tools decrease USPS’ operational costs, USPS provides lower  postage rates (worksharing rates) to mailers who use them. A partial  description of some of USPS’ address accuracy tools follows:    “Address Element Correction” identifies mailpieces that are potentially  UAA and corrects small errors in the addresses (e.g., the omission of a  directional indicator such as “NW,” or errors that refer to an avenue as a  street).   “Delivery Point Validation” verifies that the address on a mailpiece  exists in USPS’ database of addresses to which it delivers.    “National Change-of-Address LINK” allows mailers to check their  mailing lists against USPS’ National Change-of-Address database, which  contains updated address information for mail recipients who have filed  change-of-address notices with USPS.   “Address Change Service” allows mailers to receive, for a fee,  electronic notices that inform them when USPS cannot deliver their  mailpieces. For First-Class Mail, these electronic notices reduce the  amount of mail USPS must return to the sender, thereby decreasing UAA  mail and USPS’ operating costs. For Standard Mail—which USPS generally  is not obligated to return to the sender—the electronic notices (1) inform  mailers when their Standard mailpieces are UAA and (2) provide mailers  with the correct addressing information. This information enables  Standard mailers to update their mailing lists with corrected addresses  prior to their next mailing, thereby reducing future UAA mail-related costs.
USPS Introduced Two New Requirements That Are Expected to  Reduce UAA Mail  USPS also introduced two recent changes that, according to USPS  officials, will reduce UAA mail and, consequently, help USPS meets its  UAA mail cost reduction goal (i.e., a 50 percent reduction by fiscal year  2010). First, USPS has revised its “Move Update” requirement, which  currently obligates First-Class mailers to use at least one approved address  accuracy tool (such as National Change-of-Address LINK or the Address  Change Service) to qualify for worksharing rates. In September 2007,  USPS expanded this requirement to include mailers who send Standard  Mail, effective November 23, 2008. Furthermore, USPS will begin requiring  First-Class and Standard mailers to update their mailing lists—using an  approved address accuracy tool—95 days prior to each of their mailings.
Second, beginning in May 2009, USPS intends to require mailers to use a  new barcode—called the “Intelligent Mail Barcode”—on their mailpieces  to qualify for worksharing rates. According to USPS officials, the new  barcode will allow USPS and mailers to track individual mailpieces as they  move through the mail stream. USPS officials believe that the capability to  track mailpieces will reduce UAA mail volumes—and, potentially, USPS  operating costs—because mailers will be able to use the barcode to  determine which of their mailpieces cannot be delivered and correct their  mailing lists accordingly. USPS has initiatives underway, including an  agreement with the Bank of America, to test the effectiveness of the  Intelligent Mail Barcode before it is fully implemented.
USPS Has Implemented a Method to Identify and Redirect  Improperly Addressed Mail before Delivery Is Attempted  In September 2007, USPS also implemented a new, nationwide mail  processing method—called the “Postal Automated Redirection System”— that identifies and redirects mailpieces to individuals who have moved.  According to USPS, if a mail recipient has moved and filed a change-of- address request with USPS, the automated redirection system identifies  mailpieces addressed to his or her prior address when these mailpieces  first enter the mail stream and initiates one of three possible actions. The  first possible action is for USPS to immediately redirect the mailpiece to  the new, correct destination. Second, if the mailpiece is not eligible for  forwarding or if the mailer has authorized its disposal, USPS would  remove the mailpiece from the mail stream and discard it. Finally, if  requested by the mailer, USPS would return the mailpiece to the mailer  (i.e., the sender). In the past, USPS redirected mailpieces only after  delivery had been attempted. In such cases, Standard Mail was returned to  the postal facility and discarded as waste (and disposed of through  recycling or some other means), while First-Class Mail was processed and  forwarded, returned to the sender, or sent to a mail recovery center.  Because USPS generally does not forward or return UAA Standard Mail— regardless of when it is first detected—the automated redirection system  will not reduce the amount of UAA Standard Mail that USPS must  eventually discard. However, USPS officials believe the automated  redirection system will reduce the cost of processing UAA mail, thereby  contributing to the agency’s UAA mail cost-reduction goal.
section_title: The Mailing, Paper Recycling, and Environmental Advocacy Industries Have Undertaken Several Key Initiatives to Increase Mail- Related Recycling
paragraphs: In addition to USPS’ efforts, the mailing industry and other stakeholders  have undertaken several key initiatives to increase the volume of mail- related materials that are recycled. Some of these initiatives were  developed by mailing industry associations, while others are the result of  efforts by individual mailers and organizations in the paper and  environmental advocacy industries. For example, in 2007, the Direct  Marketing Association (DMA), the Envelope Manufacturers Association,  and the Magazine Publishers of America developed nationwide mail  recycling awareness campaigns. While similar in nature, the three  programs use different logos to increase recycling awareness and are  intended for different types of mailpieces (e.g., catalogs, envelopes, and  magazines). DMA members who participate in the association’s “Recycle  Please” program are expected to include a logo in their catalogs and other  mailpieces to encourage mail recipients to recycle their mailpieces after  reading them. The envelope association’s program—called “Please  Recycle”—promotes mail recycling by encouraging manufacturers to place  a recycling logo on the front of envelopes and other packaging materials.  Finally, the magazine association—which also calls its program “Please  Recycle”—developed recycling logos and a full-page recycling  advertisement that the association encourages its members to include in  their magazines in order to increase the volume of magazines recycled.  Participation in these recycling awareness campaigns varies. Specifically,  based on our calculations of data provided by officials from DMA and the  envelope and magazine associations, as of mid-March 2008, about 2  percent, 30 percent, and 10 percent of their members participated in these  programs, respectively. (The logos used for these recycling awareness  campaigns are depicted in fig. 1 of app. III.)
The second key recycling initiative involves the National Recycling  Coalition, which intends to develop new recycling logos to replace the  familiar “chasing arrows” logo currently displayed on many products.  According to coalition representatives, one of the new logos will be  specific to mail. The coalition believes that this logo—which has been  used for many years—is confusing to the public. According to coalition  officials, the logo has been repeatedly altered by product manufacturers  and others since it was first introduced and, as a result, multiple versions  of the logo currently exist, each of which signifies different meanings  depending on its use. By updating the existing logo, the coalition hopes  to, among other intentions, enhance consumer awareness that mail can be  recycled. (Examples of selected “chasing arrows” recycling logos are  depicted in fig. 2 of app. III.)
Finally, in 2004, Time, Inc.; Verso Paper; and the National Recycling  Coalition, among other parties, initiated the “Recycling Magazines is  Excellent” project to inform consumers—primarily via advertisements in  magazines—that catalogs and magazines are recyclable. These parties  have piloted the project in five areas: Boston, Massachusetts; Prince  George’s County, Maryland; Portland, Oregon; Milwaukee, Wisconsin;  and New York City, New York. According to a Time, Inc., official, in  Boston, Portland, and Prince George’s County, the program increased  magazine recycling by 18 percent, 6 percent, and 19 percent, respectively.  Data for the Milwaukee and New York City pilots were not available at the  conclusion of our review.
section_title: The Mailing Industry and Other Stakeholders Have Undertaken Several Key Initiatives to Increase the Amount of Mail with Environmentally Preferable Attributes
paragraphs: In addition to their efforts to increase mail-related recycling, the mailing  industry and other stakeholders have undertaken a variety of key  initiatives to increase the amount of mail with environmentally preferable  attributes. As described below, DMA is responsible for several of these  initiatives. Other stakeholder initiatives, including those of individual  mailers, environmental organizations, and other non-profit organizations  are discussed in appendix IV of this report.
subsections: section_title: DMA Has Undertaken Several Key Initiatives to Increase the Amount of Mail with Environmentally Preferable Attributes
paragraphs: DMA has undertaken several key initiatives to increase the amount of mail  with environmentally preferable attributes, particularly with respect to  improving its members’ mail targeting practices and the accuracy of their  mailing lists. The first such effort, the Mail Preference Service, was  introduced in 1971 and is a list of consumers who have requested not to  receive (i.e., opt-out of) “prospecting mail” sent by DMA members. DMA  requires its members to honor such requests and, consequently, forbids its  members from selling or exchanging this list for any purpose other than  removing prospective customers from their mailing lists. According to  DMA officials, by eliminating prospecting mail, the Service (1) reduces the  amount of mail a consumer receives by approximately 80 percent and (2)  prevented 930 million pieces of unwanted mail from entering the mail  stream in 2007. While DMA officials stated that the association works  with consumer advocacy groups and other parties to inform consumers  about the Mail Preference Service, a recent study conducted by Pitney  Bowes indicates that two-thirds of Americans are not aware of the  Service’s existence. In part to address this lack of awareness, several  parties within the environmental advocacy industry recently implemented  other opt-out programs. As noted previously, these programs are  discussed in appendix IV of this report.
More recently, DMA formed the Committee on Environment and Social  Responsibility, which is comprised of 16 executives from DMA’s member  organizations. Formed in 2005, the committee’s goals are to identify  challenges that direct marketers face with respect to “social  responsibility” issues, such as environmental sustainability and corporate  citizenship issues, and to develop guidance to address these challenges.  The committee designed and executed a survey to benchmark the  environmental practices of its members and developed a Web-based tool  to help members evaluate their environmental practices in five areas: (1)  paper procurement and use, (2) address quality (accuracy) and data  management, (3) design, (4) packaging and printing, and (5) recycling and  pollution reduction. The tool also enables mailers to create an  environmental vision statement or policy statement for, among other  purposes, displaying on their Web sites. DMA officials could not supply  data on the extent to which its members use this tool.
In 2007, DMA also passed the “Resolution Asserting Environmental  Leadership in the Direct Marketing Community.” The resolution calls on  DMA members—by June 2008—to voluntarily establish internal  measurements and benchmarks for assessing their business practices with  respect to a list of 15 environmentally preferable practices. This list— called the “Green 15”—aligns with mailer business activities, such as paper  procurement and use, mailing list accuracy, and mailpiece design. While  the adoption of the 15 environmentally preferable practices is generally  voluntary, in June 2008, DMA intends to establish goals and timetables for  measuring its members’ success in implementing these practices, which,  according to DMA officials, could lead to future DMA requirements. DMA  officials stated that, thus far, members generally have reacted positively to  the list of 15 preferable practices, although some members have expressed  concerns about purchasing recycled and certified paper. Specifically,  members expressed concerns that (1) the supply of these products may  not be sufficient to meet demand if DMA were to require its members to  use them; and (2) due to the number of forest certification programs and  the controversy over the programs’ various merits, it is not clear which  program they should use. (For more information on the Green 15, see  app. V of this report.)
Finally, in October 2007, DMA launched its “Commitment to Consumer  Choice” program. Under this program, DMA members must, among other  actions, include—on every direct mail solicitation they send—an option  for consumers to opt-out of receiving future direct mail solicitations from  that member, regardless of whether the member has previously  established a business relationship with those customers. The new  requirement, effective in October 2009, will strengthen DMA members’  current obligation to provide mail recipients with one opt-out notice per  year. The Commitment to Consumer Choice program also includes several  other requirements related to consumer choice. Some of these  requirements are new or modified, while others are long-standing. For  example, DMA members must (1) disclose, upon consumer request, the  source from which they obtained data about the consumer; (2) eliminate,  upon consumer request, the transfer or rental of the consumer’s personal  information to other marketers; (3) increase the frequency with which  they update their mailing lists against information in DMA’s Mail  Preference Service opt-out database (from a quarterly to a monthly basis);  and (4) act on all customer opt-out requests within 30 days and for a  period of at least 3 years.
According to DMA officials, DMA has an internal process for ensuring that  members comply with its requirements. The process begins with DMA’s  Corporate Responsibility group, which receives all customer complaints  regarding the receipt of unwanted mail. If a pattern of complaints about a  company emerges, DMA officials stated that the group would file a formal  case before DMA’s Committee on Ethical Business Practices. If the  offending mailer still refuses to comply with DMA requirements, DMA’s  Board of Directors can, among other actions, expel the mailer from the  association. According to DMA officials, however, member expulsions are  rare. The officials explained that the association’s goal is self-correction,  not punishment, and that mailers normally alter their practices to avoid  expulsion from DMA.
section_title: Stakeholders Cited Five USPS Mail- Related Recycling Opportunities, but USPS Would Need to Assess Several Factors in Deciding Whether to Adopt Them
paragraphs: USPS, mailing industry, and other stakeholders we spoke to identified five  opportunities that USPS could choose to undertake to increase its  recycling of mail-related materials and to encourage mailers to increase  the amount of mail with environmentally preferable attributes. The five  opportunities cited most frequently were for USPS to (1) implement a  program for recognizing mail-related recycling achievements; (2) increase  awareness among mail recipients that mail is recyclable and encourage  them to recycle their mail through, among other actions, collaboration  with mailing industry and other stakeholder initiatives; (3) collaborate  with parties interested in increasing the supply of paper fiber available for  recycling; (4) establish a special, discounted postal rate—or Green Rate— as a means of inducing mailers to adopt one or more environmentally  preferable attributes in their mailpieces; and (5) initiate a mail take-back  program in locations that do not have access to municipal paper recycling.  Each of these opportunities appears to be consistent with (1) the agency’s  long-standing commitment to environmental leadership and (2) the  Postmaster General’s recent commitments to both minimize the agency’s  impact on every aspect of the environment and to act as a positive  environmental influence in U.S. communities. Based on our analysis,  however, USPS would need to assess factors such as costs to USPS;  feasibility, including logistical considerations; and mission compatibility in  deciding whether to adopt the opportunities.
subsections: section_title: Stakeholders Identified Five USPS Opportunities
paragraphs: The stakeholders we interviewed identified five opportunities that USPS  could chose to undertake to increase its recycling of mail-related materials  or to encourage mailers to increase the amount of mail with  environmentally preferable attributes. First, several stakeholders stated  that USPS could increase its mail-related recycling activities by offering  recognition, financial awards, promotional opportunities, and other  incentives to reward exemplary USPS recycling achievements. Three  USPS officials stated that such incentives could target facility-level  managers and employees, who are likely to be critical to the successful  implementation of mail-related recycling programs. As discussed, USPS is  considering establishing a program to nominate facilities, teams, and  individuals for environmental excellence. As currently envisioned, the  program would honor excellence in seven environmental categories,  including “pollution prevention.” While USPS is contemplating recognition  for “improvements in recycling processes or programs” as part of its  achievements related to pollution prevention, the program under  consideration does not specifically recognize mail-related recycling  achievements. An incentives program targeted specifically toward such  achievements could foster greater competition throughout USPS, resulting  in substantial increases in the agency’s recycling revenue and significant  savings in its waste disposal costs. Such a program could be based solely  on recycling revenues, or include other metrics—such as the amount  (tonnage) of materials recycled or its savings in waste disposal costs.
Second, because mail recipients often are unaware that mail can be  recycled, stakeholders suggested that USPS conduct a campaign to  increase awareness among mail recipients that mail is recyclable and to  encourage them to recycle their mail. Such a campaign could be  collaborative in nature, unilateral, or undertaken through some  combination of outreach efforts. For example, several stakeholders stated  that USPS could collaborate with one or more of the ongoing mailing  industry and other stakeholder initiatives to increase recycling awareness  among mail recipients and to encourage them to recycle. Such an effort,  among other matters, could (1) address common misconceptions related  to the recyclability of various types of mail and (2) raise awareness about  the primary causes of identity theft—two reasons why recipients may not  recycle their mail. In addition, USPS could collaborate with members of  the Greening the Mail Task Force to design and implement a plan to  increase the public’s awareness in these and other areas. If USPS desired  to do so, stakeholders suggested that the agency also could take unilateral  action to promote mail recycling by, for example, delivering an  informational post card or some other form of communication to each  address in America. Such an approach would be similar to USPS’ actions  to promote its various products and services nationwide, which, according  to USPS officials, typically increase consumer awareness by nearly 30  percent. Stakeholders also suggested that USPS develop postmarks and  stamps and install signage in postal lobbies to promote mail recycling.
Third, numerous stakeholders suggested that USPS collaborate with  parties, such as the American Forest and Paper Association and U.S. paper  recycling companies, to increase the supply of fiber needed for  manufacturing recycled paper products. According to these stakeholders,  such fiber is typically in short supply domestically because it is usually  exported to countries, such as China and India, which pay premium prices  for the fiber. The stakeholders added that the constant supply of UAA mail  available through USPS could be used to increase the domestic supply of  recycled fiber. Such a supply increase could potentially decrease the cost  of using recycled paper products which, in turn, could encourage their  increased use. One way for USPS to undertake this opportunity is to  collaborate with the American Forest and Paper Association, which,  according to association representatives, is eager to increase mail-related  recycling. Such a collaboration, they said, would contribute to the  association’s goal of recovering (i.e., preventing landfill disposal or  incineration) 55 percent of paper consumed in the United States by 2012.  In addition, USPS could collaborate with members of its Greening the Mail  Task Force to design and implement a plan to increase the supply of paper  fiber available for recycling. USPS also could choose to explore, or  expand, partnerships with local recyclers. One paper recycling company in  New Jersey, for example, purchases and transports UAA mail from USPS  facilities in Maryland, Pennsylvania, New Jersey, and elsewhere to  manufacture recycled paper products, such as paper towels, toilet paper,  facial tissue, and napkins. According to a company representative,  because UAA mail is a critical feedstock for the company’s production  methods, the company would like to increase its supply of UAA mail as  long as the cost of transporting UAA mail to the company does not  become prohibitive.
Fourth, numerous stakeholders in the environmental advocacy industry,  suggested that USPS establish a special, discounted postal rate—or Green  Rate—as a means of inducing mailers to adopt one or more  environmentally preferable attributes in their mailpieces. According to  these parties, for example, USPS could establish a special discount for  mailers that use recycled and/or certified paper. Such a discount, they  said, would help mailers offset the increased costs associated with using  recycled paper and would provide an incentive for mailers to use certified  paper. A Green Rate also could reward mailers who, among other  practices, (1) use certain targeted marketing strategies, (2) can  demonstrate measurable reductions in the amount of UAA mail they send,  and (3) use mail materials efficiently. With respect to targeted marketing  strategies, for example, a Green Rate could reward mailers who  voluntarily participate in mail opt-out programs—such as the program  offered by Catalog Choice—and can demonstrate that they honor mail  recipients’ requests to be removed from their mailing listings. A Green  Rate also could reward mailers who, over time, reduce the amount of UAA  mail they send. Beginning in May 2009, USPS intends to use its Intelligent  Mail Barcodes to establish large mailers’ UAA mail rates (the baseline)  and, over time, measure changes in the frequency of the mailers’ UAA  mail. While large mailers will be required to use the barcodes to receive  worksharing rates for their mailings, USPS also could choose to use these  data to reward mailers who meet a specified target for UAA mail  reductions. In addition, if USPS chose to do so, it could reward mailers  according to a “sliding scale,” whereby mailers would receive larger  discounts for greater UAA mail reductions. A final example of practices  that could be considered for a Green Rate is the use of two-way reusable  envelopes and other mailpieces that use materials efficiently.
Finally, numerous stakeholders suggested that USPS, using its existing  transportation network, initiate a mail take-back program to facilitate the  recycling of discarded and unwanted mail in rural, sparsely populated  areas that do not have access to municipal paper recycling. While the  details of such a program would need to be developed, stakeholders  suggested that USPS—possibly, in collaboration with others—could  supply mail recipients in these locations with pre-addressed packages to  send their discarded mail either directly to a plant for recycling or,  indirectly, to other facilities—including, possibly, USPS facilities—where  the packages could be held for subsequent pick up and recycling.  Conceptually, such a program resembles several existing take-back  programs for used products—such as inkjet cartridges, digital cameras,  and cellular phones—whereby the program sponsor (e.g., a manufacturer)  supplies the consumer with a pre-paid and pre-addressed envelope for  returning used products through the U.S. mail. Stakeholders noted that  USPS receives revenue for returning the products under the existing take- back programs and, depending on how such a program is funded, also  could receive revenue under a take-back program for mail.
section_title: USPS Would Need to Assess Several Factors in Deciding Whether to Adopt the Opportunities
paragraphs: Each of the five stakeholder-identified opportunities appears to be  consistent with (1) the agency’s long-standing commitment to  environmental leadership and (2) the Postmaster General’s recently  expressed commitment to minimize USPS’ impact on every aspect of the  environment and to act as a positive environmental influence in U.S.  communities. However, based on our analysis, USPS would need to assess  factors such as cost; feasibility, including logistical considerations; and  mission compatibility in deciding whether to adopt the opportunities.
section_title: Cost Considerations
paragraphs: Each of the five opportunities has overall cost considerations given their  likely impact on staff and other resources that would be needed to, among  other actions, develop plans, procedures, and agreements for  implementing them. USPS also would need to identify the staff and offices  responsible for successfully initiating and carrying out the opportunities,  and provide training as appropriate. In addition, while the costs associated  with implementing a program for recognizing mail-related recycling  achievements are likely to be minimal (and more than offset by increases  in USPS’ revenues), the remaining four opportunities necessitate  additional cost consideration. For example, two of the opportunities— increasing awareness about mail recycling and initiating a Green Rate— appear to have little likelihood of increasing the agency’s revenue.  Furthermore, the remaining two opportunities—collaborating with parties  interested in increasing the supply of paper fiber available for recycling  and initiating a mail take-back program—may not generate sufficient  revenues to cover their costs. Depending on the magnitude of variance  between the expected costs and revenues, USPS may find implementing  one or more of the opportunities unacceptable. This is, in part, because as  we recently testified, USPS faces multiple short- and long-term pressures  in improving its operational efficiency, increasing its revenues, and  controlling its costs—some of which are increasing faster than the overall  inflation rate. In addition, unlike in the past, USPS is now subject to an  inflation-based cap on the prices it can charge for its goods and services.  Specifically, the 2006 Postal Accountability and Enhancement Act includes  an annual limitation on the average percentage changes in rates for each  market-dominant mail class—such as First-Class Mail and Standard Mail— which is linked to the change in the Consumer Price Index for All Urban  Customers.
In addition to these overall cost considerations, three of the five  opportunities have additional cost-related factors that USPS would need to  assess prior to deciding whether to adopt them. First, while the cost of  collaborating with other entities to increase recycling awareness among  mail recipients and to encourage mail recipients to recycle their mail could  be minimal, according to a USPS official, each of its recent nationwide  promotional campaigns (which do not involve collaboration) cost USPS  approximately $2.1 million. Such costs, however, may be overstated with  respect to a recycling campaign because USPS could choose, in  collaboration with others, to target only mail recipients in zip codes that  do not have access to municipal paper recycling (about 14 percent of the  U.S. population). Furthermore, USPS could elect to “piggyback” a  recycling awareness message on another of its promotional mailings,  which, by itself, would result in little additional cost. However, according  to USPS officials, such a promotional campaign would necessitate the use  of recycled paper to remain consistent with the agency’s recycling  awareness message. As previously stated, using recycled paper is more  expensive than using virgin paper and, thus, would increase the cost of  such a campaign.
Second, because establishing a special discount to induce mailers to adopt  more environmentally preferable business practices would—absent other  actions—reduce USPS revenues, USPS would have to assess the overall  affects of such a discount on its financial position. In addition, USPS  would need to assess the specific cost implications associated with each  environmentally preferable attribute it chooses to include in a Green Rate.  For example, if USPS were to consider allowing mailers who, among other  attributes, use certain mail targeting strategies to qualify for a Green Rate  (e.g., participation in voluntary opt-out programs), USPS would need to  assess whether, and to what extent, doing so would reduce its revenues.  USPS also would need to assess the costs associated with, among other of  its activities, defining a Green Rate (i.e., determining which  environmentally preferable attributes mailers must use to qualify for the  discount) and, to avoid potential abuse, ensuring that the mailpieces  presented by mailers as “green” actually qualify for the discount.
Finally, initiating a mail take-back program in locations that do not have  access to municipal paper recycling could greatly increase USPS’ costs  and workload. The extent of these increases would depend on a variety of  factors, including (1) the volume of additional mail generated by the  program; (2) the characteristics, including the dimensions and weight, of  the take-back packages that would require processing and delivery; (3)  whether the packages would need to be manually processed; (4) the  frequency with which each package needs to be handled; and (5) the  distance the packages need to be transported. First, depending on the  rate of program participation, the volume of mail requiring USPS  processing and delivery could increase substantially. In addition, because  the intent of such a program is for a mail recipient to combine all of the  mail they discard during a given time frame into a single package, the  package would greatly exceed the weight of typical mailpieces received by  the recipient. Furthermore, because communities that do not have access  to paper recycling are typically in rural, sparsely populated areas, the  increased volume of larger and heavier mailpieces probably would travel  long distances before reaching their final destination, thereby increasing  USPS’ transportation costs throughout the journey. The volume, weight,  and size of these packages also could overwhelm USPS’ service capacity in  certain rural locations. Rural postal delivery service is typically carried out  by USPS letter carriers using privately-owned vehicles that may not be  capable of accommodating the increased volume, weight, and size of the  take-back packages. Thus, USPS may incur costs for additional vehicles  or changes in its operational arrangements with its rural postal carriers.  Finally, the packages mailed by recipients would not be presorted and,  depending on how the program is implemented, may not be barcoded— two factors that would require more costly, manual processing before  delivery.
section_title: Feasibility Considerations
paragraphs: Four of the five stakeholder-identified opportunities also have issues  related to their feasibility, which USPS would need to assess prior to their  adoption. For example, if USPS chose to implement a program for  recognizing mail-related recycling achievements, such as an incentive  program for facility-level managers and employees, it would first need to  collect the data needed to do so. The two existing sources for USPS  recycling data—the agency’s evaluation tool for its areas and the  budgetary line-item for its districts—do not include facility-level data.  Furthermore, collecting this data may not be feasible due to staffing  constraints and the large number (about 37,000, according to USPS) of  postal facilities nationwide. In light of this feasibility limitation, however,  and given USPS’ goal of earning $40 million in recycling revenue in fiscal  year 2010 from its districts’ efforts (approximately $500,000 per district),  the agency could, instead, focus on recognizing the significant  achievements of its district managers and employees. A district-level  incentives program, however, has its own feasibility constraints. For  example, to help ensure equity in such an incentives program, USPS would  need to resolve several factors related to the program’s successful  implementation. Specifically, USPS likely would need to make  adjustments for large, regional variations in the price paid for recyclable  mail-related materials. If USPS did not consider these variations, an  incentives program based solely on revenue generated from mail-related  recycling would seriously disadvantage certain districts. One possibility  for resolving this issue may be to structure an incentives program on other  metrics, such as the total tonnage of material recycled or a district’s  savings in waste disposal costs, either in lieu of, or addition to, recycling  revenues. However, such an action would introduce other issues related to  the opportunity’s feasibility because, according to USPS officials, USPS  does not currently require its organizations, including its districts, to (1)  report their recycling tonnage or savings from waste disposal costs or (2)  collect and report their recycling data using consistent methods. The  Manager of USPS’ Environmental Policy and Programs organization told  us that the agency intends to require its area managers to report  information on their recycling tonnage, in addition to their recycling  revenue and waste disposal costs, but at the conclusion of our review,  USPS had not required these managers to do so.
Second, if USPS chose to coordinate with parties, such as domestic  recyclers, to increase the supply of fiber available for paper recycling, it  would need to resolve a multitude of logistical considerations. For  example, (1) Where will USPS store its mail-related materials for  recycling? (2) Is sufficient storage available within USPS facilities? (3)  Who will load the materials for delivery to the recycler? (4) Who will be  responsible for transporting the materials and how will the deliveries be  accomplished? and (5) Given space constraints, how often will the  materials need to be transported, and to whom? Furthermore, to the  extent that USPS facilities, vehicles, and other materials (e.g., crates and  moveable carts) are used, the agency would need, among other actions, to  develop a method for sharing its costs with recyclers and others who  benefit directly from its efforts. If USPS were to undertake this  opportunity with a goal of recycling domestically—as recommended by  some stakeholders—USPS may also wish to explore arrangements to  recoup a portion of any reduction in its revenues attributable to using  domestic recyclers. If USPS did not use its staff or if sufficient and capable  staff is not available to undertake these and other efforts, USPS could hire  a third party to identify locations where this opportunity may be feasible  to implement and, in such cases, act as USPS’ intermediary in addressing  these and other logistical considerations.
Similarly, if USPS chose to establish a Green Rate, the agency would need  to resolve a wide range of issues related to the feasibility of doing so. For  example, USPS would need to assess whether a discount for mailpieces  with certain environmental attributes is the appropriate mechanism for  promoting environmentally preferable business practices. If USPS were to  proceed, it would need to define the parameters of the discount and, to  avoid abuse, determine how it would ensure that mail presented as “green”  actually qualifies for the discount. Several stakeholders expressed  particular concern about the feasibility of enforcing a Green Rate,  indicating that such a task would be administratively difficult and,  possibly, impossible to accomplish. Finally, to determine whether a Green  Rate is feasible, USPS would need to (1) assess the impact of such a  discount on its net revenues and existing postal rates; (2) determine  whether, and to what extent, a Green Rate would affect its market- dominate products, which are subject to an annual inflation-based price  cap; and (3) if the establishment of the discount resulted in the need to  raise postal rates, evaluate whether USPS would be able to raise rates in  accordance with the requirements in Postal Accountability and  Enhancement Act.
Finally, to initiate a mail take-back program, USPS would need to consider  the logistics and overall feasibility of collecting and transporting the  increased volumes of larger and heavier mailpieces through the mail  stream. USPS, probably in collaboration with others, also would need to  determine how the program would work—which likely would be a  complex arrangement. For example, what classes of mail would the  program cover? Who would supply the packages and postage needed to  return the discarded mail? How would the appropriate postage be  determined? Furthermore, where would the packages be sent, and to how  many locations? In addition, to estimate its costs, USPS would need to  develop, among other factors, a method for estimating (1) the number of  mail recipients who would participate in the program and (2) the volume,  size, and weight of their discarded mail take-back packages. While these  considerations are numerous, the most serious question with respect to  the program’s feasibility is “Who will pay the substantial costs associated  with implementing the program?”
USPS has three options to cover the costs of a mail take-back program.  First, USPS could explore increases in its postage rates for the applicable  classes of mail—an action that mailing industry stakeholders would likely  strongly oppose. Furthermore, it may not be feasible to raise these rates  because of a limitation specified in the Postal Accountability and  Enhancement Act. Second, while USPS could require mail recipients to  pay the postage needed to cover the program’s costs, such an action, in  our view, would greatly diminish or eliminate public participation. As we  reported in 2006, one key to increasing the volume of materials recycled is  to offer financial incentives to increase recycling. Thus, a mail take-back  program that departs from this premise is, in our view, unlikely to  succeed. Finally, USPS could solicit funding from other parties, such as  communities, federal and non-profit organizations, businesses,  environmental organizations, Congress, and other interested parties. While  USPS could explore this option, it is unclear whether other parties would  find it in their best interest to fund such a program.
section_title: Mission Compatibility Considerations
paragraphs: While each of these opportunities appears to be consistent with the  agency’s environmental commitments, including the Postmaster General’s  recent commitments to both minimize the agency’s impact on every aspect  of the environment and to act as a positive environmental influence in U.S.  communities, it is unclear to what extent USPS views actions to fulfill  these commitments as being compatible with its mission and strategic  goals. Similarly, it is not clear whether, or to what extent, USPS would be  willing to sacrifice revenue and/or incur additional costs to further its  environmental commitments.
In addition, two of the five stakeholder-identified opportunities—the  establishment of a mail take-back program and a Green Rate for  mailpieces that incorporate a variety of environmentally preferable  attributes—would necessitate additional cost considerations. First, several  mailing industry stakeholders told us that they strongly oppose a Green  Rate, in part, because of mission compatibility concerns. According to  these stakeholders, unlike worksharing rates that reward mailers for  reducing USPS’ costs, a Green Rate discount does not align with USPS’  primary mission of delivering the mail. In addition, they said that market  forces and mailer preferences—not the establishment of a Green Rate— should determine whether mailers choose to include environmentally  preferable attributes in their mailpieces. Depending on how USPS chose to  define a Green Rate, some specific aspects of the definition could cause  additional mission compatibility concerns. For example, if the use of  certified paper was included in a Green Rate, USPS lacks the expertise  needed to evaluate the relative merits of the various—and controversial— certification programs. Likewise, if a Green Rate incorporated certain  targeted marketing strategies, USPS could be drawn into a contentious  debate about the relative merits of various opt-out programs, including  voluntary programs administered by Catalog Choice and others.
Finally, as discussed previously, establishing a mail take-back program  likely would result in significant increases in the volume, size, and weight  of packages moving through the mail stream. Such increases could  overburden USPS’ delivery networks and create delivery delays. Related to  this, several stakeholders from USPS and the mailing industry told us that  USPS’ mission is to deliver the mail in a timely fashion—not to help mail  recipients recycle their discarded and unwanted mail.
section_title: Conclusions
paragraphs: USPS, the mailing industry, and others have developed a wide range of  initiatives that, over time, could alleviate some concerns related to the  perceived negative impact of mail on the environment. Several of the  initiatives also have the potential to improve USPS’ financial position— while also enhancing its environmental reputation in U.S. communities.  However, it is not clear what level of trade-offs, including decreased  revenue and/or increased costs, USPS would find acceptable to incur to  further its commitments and reputation on environmental matters.
While much is being done, USPS has numerous opportunities to enhance  its mail-related recycling efforts. For example, while establishing goals  should assist USPS in generating substantial additional mail-related  recycling revenues, the agency has not established similar goals for  reducing its costs associated with waste disposal. Consequently, its  recycling goals do not reflect the full financial benefit attributable to mail- related recycling. In our view, revising USPS’ recycling goals to include  savings from lower waste disposal costs or adopting additional goals that  reflect the full financial benefit attributable to mail-related recycling would  help focus USPS employees on the need to achieve greater cost  reductions—consistent with one of USPS’ strategic goals. Related to this,  while USPS intends to develop a plan to help it achieve its recycling goals,  it is not clear whether this plan will (1) specify how progress toward its  goals will be measured or (2) ensure that the data USPS will use to  measure its progress are accurate, reliable, and collected using a  consistent method. Furthermore, while USPS launched a pilot recycling  program in New York City to, among other objectives, apply lessons  learned to other postal facilities, it is unclear whether, and to what extent,  USPS will require its facility managers to adopt these lessons where  applicable, feasible, mission compatible, and appropriate in view of cost  and other considerations. Finally, while these considerations are also  applicable to the adoption of the five stakeholder-identified opportunities  discussed in this report, each opportunity, at a minimum, provides  thoughts and insights on activities that USPS might find—after careful  analysis—beneficial to adopt.
section_title: Recommendations for Executive Action
paragraphs: To increase USPS’ recycling of mail-related materials and increase the  amount of mail with environmentally preferable attributes, we recommend  that the Postmaster General direct the Manager of Environmental Policy  and Programs and other parties, as appropriate, to take the following four  actions:    Revise the agency’s recycling goals to include savings from lower waste  disposal costs or adopt additional goals that would reflect the full financial  benefit attributable to mail-related recycling.
Ensure that the mail-related recycling plan it develops specifies, among  other matters, how USPS will (1) measure progress toward its goals and  (2) ensure that the data it uses for these measurements are accurate,  reliable, and collected using a consistent method.
After completion of the New York City pilot, require facility managers at other  facilities to adopt lessons learned, where applicable, feasible, mission  compatible, and appropriate in view of cost and other considerations.
Assess the environmental benefits of the mail-related recycling  opportunities identified by stakeholders in this report, and any others, and  adopt those opportunities that are feasible, compatible with USPS’  mission, and appropriate in view of cost and other considerations.
section_title: Agency Comments and Our Evaluation
paragraphs: USPS provided its written comments on a draft of this report by letter dated  May 2, 2008. These comments are summarized below and are included, in  their entirety, as appendix VI to this report. USPS agreed with three of our  four recommendations and stated that it had begun initiating actions to  implement them. USPS also agreed, in principle, with our remaining  recommendation to adopt applicable lessons learned from its New York City  recycling pilot nationwide, where feasible, mission compatible, and  appropriate in view of cost and other considerations. USPS stated, however,  that it cannot require all of its facility managers to adopt these lessons since  “not all lessons learned are applicable nationwide.” We recognize that the  pilot’s lessons will not be applicable at every postal facility and, thus, clarified  the recommendation to avoid confusion.
We are sending this report to the congressional requestors and their staffs.  We are also sending copies to the Postmaster General and other interested  parties. We will make copies available to others upon request. In addition,  the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions regarding this report, please  contact me at siggerudk@gao.gov or by telephone at (202) 512-2834.  Contact points for our Office of Congressional Relations and Public Affairs  may be found on the last page of this report. GAO staff that made key  contributions to this report are listed in appendix VII.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) describe the key, recent recycling  accomplishments (initiatives) of USPS, the mailing industry, and other  stakeholders and (2) identify additional recycling opportunities that USPS  could choose to engage in (or influence mailers to undertake), including  the factors that USPS would need to assess prior to adopting the  opportunities. Such factors include costs to USPS; feasibility, such as  logistical considerations; and compatibility with USPS’ mission.
To address our overall reporting objectives, we interviewed a wide range  of USPS officials as well as representatives from about 40 organizations  (stakeholders) that have expertise in mail and paper recycling issues. For  expertise in mail, we contacted numerous, major mailing industry  associations which encompass the three major classes of mail that contain  advertisements—First-Class, Standard, and Periodical. For expertise on  environmental matters, we contacted organizations with positions on a  wide range of environmental matters, including the waste generated from  mail. For expertise in paper recycling issues, we contacted organizations  that, among other matters, have an interest in increasing the amount of  paper fiber available for recycling. During our interviews, we requested  contact information for other relevant stakeholders and, as appropriate,  contacted representatives from those organizations who agreed to speak  with us. The stakeholders we interviewed are listed in table 2.
In addition, to describe recent USPS initiatives, we (1) reviewed and  analyzed relevant documents related to the initiatives; (2) toured various  facilities engaged in recycling activities, including USPS facilities in  Baltimore and Philadelphia, a paper recycling facility and a printing  facility; and (3) attended meetings of the “Greening the Mail Task Force”— a committee of USPS, mailing industry, and other stakeholders whose  mission is to identify and address environmental issues that relate to the  mail. We also interviewed a wide range of officials in various USPS  organizations, including Environmental Policy and Programs, Address  Management, Product Development, Pricing and Classification, Marketing,  Government Affairs, the Office of Inspector General, and the Memphis  Category Management Center. In addition, we interviewed USPS staff  involved in implementing the New York City pilot; facility managers and  employees involved with recycling in Baltimore and Philadelphia facilities;  and employees involved with the National Postal Forum and the Mailers’  Technical Advisory Committee, among others. To determine recent  initiatives of the mailing industry and others, we interviewed each of the  stakeholder organizations listed above and reviewed and analyzed relevant  documents related to the initiatives they identified. We selected key,  recent initiatives undertaken by USPS, the mailing industry, and others  based on our professional judgment.
To identify additional mail-related recycling opportunities that USPS could  choose to undertake, we solicited the views of representatives from the  aforementioned stakeholders. We specifically inquired about opportunities  to increase the recycling of mail and the amount of mail with  environmentally preferable attributes. We reported on those opportunities  that stakeholders cited more than twice and that were not currently being  addressed by an ongoing USPS initiative. Finally, using our professional  judgment, we analyzed pertinent factors, such as cost; feasibility, including  logistical considerations; and compatibility with USPS’ mission, that USPS  would need to assess prior to adopting the opportunities.
We discussed First-Class, Standard, and Periodical Mail with stakeholders;  however, we primarily focused on Standard Mail because of (1) its  increasing prominence in the mail stream; (2) its contribution to the  municipal solid waste stream; (3) USPS’ responsibility for discarding large  volumes of UAA Standard Mail; and (4) the issues critics cite related to  Standard Mail, which are reflected in numerous “Do Not Mail” state  legislative initiatives and a recent online petition for a national Do Not  Mail Registry. While other studies measure the environmental impact of  mail using different measurements (e.g., the carbon footprint attributable  to mail), this report focuses on the role recycling plays in eliminating mail  and mail-related materials from municipal solid waste, decreasing USPS’  waste disposal costs, increasing USPS’ revenue, and enhancing USPS’  commitment to environmental leadership.
We conducted this performance audit from April 2007 to June 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
section_title: Appendix II: Other USPS Actions to Increase the Amount of Mail with Environmentally Preferable Attributes
paragraphs: In addition to the two multi-faceted initiatives discussed in the body of this  report, USPS also has undertaken other actions to increase the amount of  mail with environmentally preferable attributes. First, according to USPS  officials, the agency uses 100 percent recycled paperboard in its Priority  Mail and Express Mail packages and envelopes. In addition, these officials  stated that the agency’s marketing materials, such as postcards and  brochures, typically contain at least 10 percent recycled paper. Finally,  USPS recently approved a change in its mailing standards which allows  mailers to use reusable mailpieces, such as “two-way” envelopes. Such  envelopes enable mail recipients to either remove or cover the recipient’s  address in order to reveal a return address. Mailers that use two-way  envelopes do not need to include a return envelope in their mailpieces,  which reduces their paper use and costs.
section_title: Appendix III: Depiction of Various Mail- Related Recycling Logos
section_title: Appendix IV: Other Stakeholder Initiatives to Increase the Amount of Mail with Environmentally Preferable Attributes
paragraphs: While several initiatives have been taken by the Direct Marketing Association  (DMA), other stakeholders in the mailing industry and environmental  advocacy organizations also have initiatives underway to increase the amount  of mail with environmentally preferable attributes. For example, the National  Postal Forum—a non-profit educational corporation—sponsors an annual  postal event and trade show with the same name. This forum, among other  goals, provides USPS and mailing industry attendees with training, education,  and opportunities to communicate with USPS officials on matters related to  the mail. In 2007, the forum included a series of workshops designed to  educate mailers on USPS’ tools for improving the accuracy of their mailing  lists and reducing UAA mail volumes. The May 2008 forum featured more  workshops on improving the accuracy of mailing lists, including a series of  “Xtremely Green” workshops to address the environmental implications of  the mail and ways to effectively communicate to mail recipients about  environmental issues.
A second stakeholder, the Mailers’ Technical Advisory Committee, (1)  shares technical information on matters of mutual interest related to mail- related products and services and (2) discusses ways to enhance the value  of these products and services. The committee recently published two  reports. The first report, issued in 2006, contained a list of best practices  for accurately addressing mailpieces and recommended, among other  matters, that mailers—prior to each mailing—update their mailing lists by  using USPS’ tools for improving address accuracy. We were unable to  ascertain the extent to which mailers have adopted the report’s  recommendations. The second report, issued in 2007, (1) outlined a system  by which USPS could certify the accuracy of mailing lists purchased by  mailers and (2) described several scenarios in which such a system would  reduce UAA mail. According to USPS, it intends to develop a list  certification system by October 1, 2010. However, this time frame is  contingent on the deployment of software upgrades related to its postal  automated redirection system and the mailing industry’s implementation  of Intelligent Mail barcodes, expected in May 2009.
Third, several parties within the environmental advocacy industry have  undertaken initiatives to decrease the amount of unwanted mail received  by mail recipients. For example, “41 Pounds” and “GreenDimes”—a non- profit and for-profit organization, respectively—were established in 2006  to help mail recipients decline (i.e., opt-out of) many types of unwanted  mail, including credit card and sweepstakes offers, insurance promotions,  coupon booklets, and catalogs. These organizations accomplish this goal  by, among other activities, (1) helping mail recipients register for DMA’s  Mail Preference Service and (2) directly contacting non-DMA mailers— who are not required to use this service—to request them not to send mail  solicitations to these mail recipients. 41 Pounds charges $41 for its  services and, according to its Web site, donates one-third of this fee to  community and environmental organizations. GreenDimes charges $20 for  its services and, as of mid-March 2008, planted five trees for its services  and an additional tree for every catalog that a member (mail recipient)  declined (up to five additional trees). In addition, Catalog Choice—a non- profit program sponsored by the Ecology Center and endorsed by the  National Wildlife Federation and the Natural Resources Defense Council— offers a free service that allows consumers to stop receiving unwanted  catalogs. Consumers can search for catalogs on the Catalog Choice Web  site and, after providing their address information, opt-out of those they do  not wish to receive. According to the organization’s Web site, nearly  700,000 people had registered for its service, opting out of over 9 million  catalogs as of March 31, 2008.
Fourth, some parties within the envelope industry also have undertaken  initiatives to increase the amount of mail with environmentally preferable  attributes. For example, one major envelope manufacturer enables its  customers to customize their envelopes with an assortment of  environmentally preferable attributes, including recycled and certified  paper. A company official estimated that 80 percent of his company’s  envelope sales include at least one environmentally preferable attribute.  Another company designed reusable “two-way” envelopes that are made  with at least 30 percent recycled paper.
Fifth, some individual catalog mailers have undertaken their own efforts to  incorporate environmentally preferable attributes in their mailpieces. In  2007, Forest Ethics—an environmental non-profit organization that,  among other activities, encourages catalog companies to improve their  environmental practices—surveyed the catalog industry and reported that  nine major catalog mailers had attained its highest environmental rating  by, among other actions, reducing the quantity of paper they use and using  certified and recycled paper. Another catalog mailer partnered with  Environmental Defense in 2001 and began using paper with 10 percent  recycled paper. This company also offers mail recipients a “frequency opt- out” option that enables mail recipients to choose how often they wish to  receive the company’s catalog.
Finally, to increase the prevalence of environmentally preferable attributes  in magazines, a non-profit organization called Co-op America created the  “Magazine PAPER Project.” The project helps magazines change their  business practices to better protect the environment by, among other  actions, educating magazine publishers about the environmental  consequences associated with the paper they use and working with  publishers to help them adopt environmentally preferable practices, such  as the use of recycled or certified paper. A representative of Co-op  America estimated that the percentage of magazines using recycled paper  is extremely low. According to the representative, convincing magazine  officials to use recycled or certified paper is difficult, due, in part, to (1)  confusion regarding the environmental benefits of using these products,  (2) the higher cost of recycled paper, (3) the availability of recycled paper,  and (4) the perception among many magazine companies that using  recycled paper will adversely affect the appearance of their products.
section_title: Appendix V: DMA’s List of 15 Environmentally Preferable Business Practices
paragraphs: As discussed in the body of this report, DMA developed a list of 15  environmentally preferable business practices—the “Green 15.” While  adoption of these 15 practices is mostly voluntary, in June 2008, DMA intends  to establish goals and timetables for measuring its members’ success in  implementing these practices, which, according to DMA officials, could lead  to future DMA requirements. Overall, the Green 15 consists of five mailer  business practices: paper procurement and use, mailing list accuracy and data  management, mail design and production, packaging, and recycling and  pollution reduction. A description of the specific practices related to each of  the five overall business practices follows:  Paper procurement and use – Mailers should:  1.  Encourage paper suppliers to increase their wood purchases from  recognized forest certification programs;  2.  Require paper suppliers to commit to implementing sustainable  forestry practices that (a) protect forest ecosystems and biodiversity  and (b) provide wood and paper products that meet industry needs;  3.  Ask paper suppliers where their paper comes from before purchasing  it, with the intent of avoiding paper from unsustainable or illegally  managed forests;  4.  Require paper suppliers to document that they do not produce or sell  paper from illegally harvested or stolen wood; and  5.  Evaluate the paper used for advertising, product packaging, and  internal consumption in order to identify opportunities to increase  their environmentally preferable attributes.
Mailing list accuracy and data management – Mailers should:  6.  Comply with DMA guidelines for list management, such as:  a.  maintaining lists of consumers who do not wish to receive their  b.  updating their mailing lists against the Mail Preference Service  database;  c. including—on every direct mail solicitation they send—an option  for mail recipients to opt-out of receiving all direct mail  solicitations from that member, regardless of whether a business  relationship has been previously established;  7.  Use tools developed by USPS or other parties to improve the accuracy  of their mailing lists; and  8.  Apply predictive targeted marketing models to reduce unwanted mail,  where appropriate.
Mail design and production – Mailers should:  9.  Review their direct mail solicitations and other printed marketing  material to determine whether, for example, smaller or lighter designs  (that use less paper) are appropriate; and  10. Test and use production methods that reduce waste.
Packaging – Mailers should:  11. Encourage their packaging suppliers to submit price quotes for  environmentally preferable packaging alternatives, in addition to  approved or existing packaging specifications.
Recycling and pollution reduction – Mailers should:  12. Purchase office paper and packaging materials that are made from  recycled paper, where appropriate;  13. Integrate the use of electronic communications (e.g., e-mail, internet,  and intranet) for both internal and external communications;  14. Ensure that all environmental labeling is clear, honest, and complete;  15. Participate in DMA’s “Recycle Please” campaign and/or other recycling  campaigns in order to demonstrate that their company or organization  has a program to encourage recycling.
section_title: Appendix VI: Comments from USPS
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Kathleen Turner, Assistant  Director; Samer Abbas; Kathleen Gilhooly; Jeff Jensen; Joshua Ormond;  Daniel Paepke; Stephanie Purcell; and Erin Roosa made key contributions  to this report.