The Mail Pivot: From Cost Crisis to Competitive Advantage

By Dennis P. LeStrange , President & CEO, BlueCrest

Executive Summary

I've been watching the mail industry for over two decades, and 2025 feels different. We're seeing structural change happen in real time. Mail volumes keep dropping while operating costs climb, and many organizations are still fighting yesterday's battles with yesterday's tools.

The USPS modernization is forcing every player in our ecosystem to rethink how they plan, invest, and compete. The companies that recognize this inflection point and act on it will separate themselves from those still hoping things return to "normal."

Here's what I'm seeing: declining volumes aren't going away, labor shortages are not improving, and the operators who survive will be those who build flexibility into everything they do. This means investing in infrastructure that adapts, data systems that inform real decisions, and workflows that evolve with market conditions.

Gut Check Time

The numbers tell a stark story. USPS just reported a $3.1 billion loss in Q3 of FY2025, up from $2.5 billion the year before. Revenue held steady at $18.8 billion, but only because rate increases masked the underlying volume decline. First-Class Mail dropped 5.4 percent, and even Marketing Mail couldn't hold steady.

David Steiner, the new Postmaster General, is making the right comments about independence and public service, but he's inheriting a $40 billion transformation that's still in motion. The "Delivering for America" plan is completely rewiring the postal network through Regional Processing and Distribution Centers, Local Processing Centers, and Sorting & Delivery Centers.

What does this mean for us? Uncertainty. Service standards will keep shifting. Rate structures will evolve. And the network we've planned around for years will look fundamentally different by 2027.

Meanwhile, try finding qualified production staff. I'm talking to CEOs across our industry, and everyone's dealing with the same problem: skilled workers are scarce, wages are rising, and the knowledge gap between what we need and what's available keeps growing.

The same forces creating these challenges are also creating unprecedented opportunities for organizations willing to think differently.

The Next Five Years: Three Forces That Will Define Winners

• Policy Volatility as the New Normal Postal policies will continue to influence rates, service standards, and network configurations. Organizations that can adapt quickly will control costs and maintain service levels. Those that cannot, will find themselves continually playing catch-up.
• Labor Transformation The skilled worker shortage isn't temporary. Rising wages and demographic trends mean we need to fundamentally rethink how work gets done. This will accelerate automation adoption and reward organizations that can simplify complex processes and reduce points of manual intervention.
• Data-Driven Operations The USPS is already using analytics and AI to optimize routing and reduce undeliverable mail. The private sector needs to match this sophistication. Real-time visibility, predictive maintenance, and integrated enterprise systems are survival tools now.

As Chris Lien , Executive VP Industry Affairs, BCC Software, puts it: "With rates shifting and the USPS network evolving, mailers that use reliable data and efficient workflows will control costs and adapt faster." The gap between data-rich and data-poor organizations will only widen.

What Smart Operators Are Doing Now

I'm seeing four strategies that consistently separate industry leaders from everyone else:

1. Building Flexible Infrastructure Recently, one of our financial services clients needed to double their card fulfillment speed while maintaining quality standards. Their legacy equipment couldn't handle the demand or adapt to changing requirements. We implemented a new card-attaching solution that doubled throughput and gave them the flexibility to handle volume spikes and format changes without major disruptions. That's the kind of thinking that wins: infrastructure that grows with you.
2. Embracing Cloud-Native Workflows Real-time dashboards, automated quality checks, exception-based management. When you can see problems before they become crises, when you can adjust operations based on actual data rather than assumptions, you're managing proactively instead of reactively.
3. Collaborating on Innovation The best solutions come from combining operational expertise with advanced technology. When vendors understand real-world challenges and operators embrace new possibilities, innovation accelerates dramatically. This is about co-developing solutions that address actual problems.
4. Investing in People Technology alone doesn't create competitive advantage. The organizations winning right now are upskilling their teams, fostering adaptability, and preparing their people to work alongside new technologies rather than be replaced by them.

Eddy Edel , Vice President of Global Product Line Management at BlueCrest, who has helped numerous operations modernize and adopt data-driven workflows, puts it well: “Cloud-native software gives leaders real-time control. It turns firefighting into thoughtful planning and keeps systems running ahead of demand.”

The Partnership Advantage

My experience tells me, that breakthrough improvements happen when operators and technology providers work together to solve real problems. When you combine deep operational knowledge with advanced tools, you get solutions that actually work in the real world.

This collaborative approach creates sustainable competitive advantages because the solutions are built for actual operating conditions, not theoretical ideals.

The Path Forward

The mail industry in 2025 is transforming. Declining volumes, rising costs, and labor shortages are real challenges, but they're also clearing the field for organizations that can adapt and innovate.

The winners over the next five years will be those who act now: investing in adaptable infrastructure, implementing data-driven workflows, building strong partnerships, and preparing their teams for a different kind of industry.

Change is coming whether we're ready or not. The question is whether to lead the adaptation or follow it.

The companies that choose to lead will thrive in the industry that emerges.

Dennis P. LeStrange is President & CEO of BlueCrest, a leading provider of mail processing and digital communication solutions.