Deconstructing: How The USPS Is Killing Indie
There is a great episode of Seinfeld in which Kramer, fed up with receiving junk mail, decides to permanently suspend his mail service. Mailman Newman attempts to convince Kramer to reconsider by offering a series of hypotheticals — What about bills? What about cards and letters? — each of which Kramer dismisses with sound logic. Newman is eventually forced to concede that physical mail is unnecessary. “Of course nobody needs mail!” he finally blurts out, daunted. It’s a very funny scene that makes a pretty compelling case for not needing the USPS.
But Newman was wrong. In fact, a good portion of USPS’s 7 million daily customers own businesses that rely almost exclusively on the troubled agency. And Monday’s dramatic rate increase has the potential to cripple or hamper greatly the livelihood of some of those most loyal and dependent customers. Chief among these are bands and independent labels with international customers, for whom the USPS provides a lifeline that no laptop, fax machine, or smartphone can provide.
First, the good news: the changes in Domestic shipping rates are relatively minimal. According to the official Domestic and International Shipping Price Change breakdown on the USPS’s official website, Express Mail has increased 5.8%, Priority Mail 6.3%, Parcel Select 9% and First Class 3%. This is cause for mild concern, but such a hike is not unreasonable, given the post office’s highly publicized financial woes (more on that later). Even Media Mail, beloved by everyone from fanzine editors to high profile indie labels, will not be greatly affected by the hike.
International mail is a different story. Published prices for all retail international Shipping Services –- Global Express Guaranteed (GXG), Express Mail International (EMI), Priority Mail International (PMI), and Airmail M-Bags -– show an average increase of 14.5 percent (with many services increasing far above that figure). Many small labels and artists ship as much as half of their stock to fans overseas, and this sharp rate increase is the highest since most of those labels began operating.
It would be delusional, paranoid, and self-centered to consider this hike part of some vast elaborate conspiracy to expedite the demise of independent media as we know it, and I will leave such theories to the bunkered-down folks stockpiling canned goods. But this rate increase could very well prove to be the final nail in the coffin of labels already struggling with sales lost to streaming services, media saturation, and piracy.
Since 2000, Cory Rayborn has run the popular underground label Three Lobed, releasing albums by Bardo Pond, Jack Rose, Magik Markers, and Rachel’s, among others. Like many of the bands on his roster, Three Lobed is as popular in European territories as here at home. A one-man operation with a single intern, Three Lobed is already feeling the effects of the hike.
“I have a title due out in February that I felt sure I could have shipped prior to the rate shift,” says Rayborn. “As such, the price I charged folks for pre-orders internationally was at the old rate. As fate would have it, the title ran a little bit late and I’ll be left shipping at the new prices now and will end up taking a hit out of projected revenue from those copies sold of about $400.
“There’s no way these new rates don’t seriously cut down on my international sales,” says Rayborn. “The rate increases are basically 50% on Canadian and ROW [rest of the world] packages. That’s going to be a significant addition for some folks and I expect that folks may think twice about placing an order, especially when in some cases the price of the shipping will exceed the price of the LP being purchased.”
Temporary Residence is a Brooklyn-based label run by Jeremy DeVine. Artists as diverse as Three Mile Pilot, the Books, and William Basinski have all called the label home over its near-20-year existence. DeVine, too, expects to lose customers. “We’ve tried to keep the prices of our products as low as possible to compensate for the fact that shipping rates keep increasing,” says Devine, “but we will inevitably lose some customers as the shipping costs become prohibitive for some folks.” Far from feeling blindsided by the hike, the veteran label boss admits he saw it coming. “It’s very disappointing,” says DeVine, “but the USPS is hemorrhaging money … so I’m not particularly shocked at any of this,” he says.
John Whitson, who has operated the taste-making psych label Holy Mountain label since 1992, releasing albums by Wooden Shjips, Six Organs Of Admittance, and Om, is similarly trying to roll with the punches. “It’s unfortunate the prices aren’t raised incrementally each year so things like this aren’t such a shock to the system,”he says, “but so few people understand the value of the service the post office provides to small businesses and record labels in particular.”
It’s not only labels being affected. For many artists with small but loyal fanbases, the ability to sell physical media to international collectors is often the difference between eking out a living and having an expensive hobby. Kevin De Broux has been making visceral drone punk under the name Pink Reason since 2007, releasing acclaimed albums on legendary labels like Siltbreeze as well as on his own Savage Quality Recordings label. “I do close to half of my sales overseas,” he says, “and I predict this will eliminate up to a third of my sales.”
But the short-term effects are nothing compared to the long-term ramifications. “My customers are foreign, not rich,” says De Broux. “If they can’t afford to buy my records, I can’t afford to make more. It’s simple economics.” Rayborn agrees: “It’s also not like a lot of the European folks making orders have great economic situations in their home countries.”
So why the increase? Many blame Congress’s 2006 provision in the USPS contract stipulating that they subsidize pension retirement accounts and healthcare benefits upfront for 70 years. The mandate –- which applies to no other federal agency –- has been the biggest blow in a series of acts by the US House of Representatives and the Senate to undermine the USPS. The provision gives the already ravaged USPS a mere decade to fully pre-fund the benefits of even future employees, some of whom will not even be born until 2058. The provision’s purpose seems transparent enough: to topple a public sector union and privatize mail delivery. In a plot-thickening move that will no doubt cramp the newsletter-writing hands of conspiracy theorists nationwide, UPS and Fed Ex –- both private corporations and the USPS’s biggest competitors –- have both lobbied hard for the provision. Both companies are among the biggest campaign contributors in the United States. Not surprisingly, when it comes to writing checks, both Fed Ex and UPS seem to skew politically to the right: Both contributed the maximum $250,000 to sponsor the second inauguration of George W. Bush, who presided over the 2006 provision. It is ironic that many of the political factions who espouse fundamental Constitutionalism where things like private gun ownership are concerned are the same ones doing everything they can to hobble one of the only government agencies explicitly authorized by the United States Constitution.
An online petition urging Congress to repeal the Postal Accountability and Enhancement Act of 2013 blames Congress for the USPS’s current economic struggles, reasonably pointing out the unfairness of asking the USPS to fund seven decades of benefits, while no other government agency or private company faces such an unachievable task. At the time of this writing, the petition still required more than 23,000 signatures of its goal of 25,000 by February 4th.
In a prescient Esquire piece in December of 2011, Charles P. Pierce wrote “This whole crisis could still be avoided if Congress would recalculate the pension money in a more reasonable way.” De Broux agrees. “This isn’t the USPS itself doing this,” he says. “This is corporate interests and conservatives behind these moves, and their intention is to cripple the USPS. I assure you, the workers at USPS don’t want an unsustainable business model that will result in the eventual loss of their careers.”
With a reported 8.3 billion dollar budget deficit and losses of $25 million a day on average, the USPS had little choice but to raise their rates. According to the USPS website, the Postal Regulatory Commission reviews the price adjustments before they become effective, and by law, each product must cover its attributable costs. But even this increase might just prove a spit into the ocean, postponing the inevitable end of the centuries-old federal institution that currently employs over 570,000 Americans, making it the third largest civilian workforce in the United States behind the federal government and, um, Walmart.
The music industry is merely one potential casualty resulting from this provision, as the rate increase will affect most companies doing international business of any kind. But the change in the ability to get music to fans will likely provide a rapid acceleration of the already imminent death of physical media, as even diehard record collectors will find they are simply financially unable to sustain the artists and labels they love. Boutique American labels like Three Lobed, Temporary Residence and Holy Mountain, to name just three of hundreds of examples, offer high quality music and vinyl, special editions and elaborate packaging as a way to maintain brand loyalty during a time in which the acquisition of music through illegal means has never been easier or more seductive. It cannot be overstated that these increased international shipping charges will make it even more difficult to do business in what is already a hopelessly fragile independent music economy.
Maybe Newman was right after all; maybe no one needs record labels and mail order distributors, either. But it’s difficult to imagine a thriving underground music community without them, or the independent artists that rely on them to distribute music that may not be commercially viable enough to be licensed for use in a television program, blockbuster movie, or halftime show. With the USPS poised to go the way of the Pony Express, it seems grimly inevitable that many artists and labels will have no choice but to go down with the proverbial ship.