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Association for Postal Commerce

"Representing those who use or support the use of mail for Business Communication and Commerce"
"You will be able to enjoy only those postal rights you believe are worth defending."


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August 8, 2009

The Washington Post has reported that "In an increasingly bitter Washington battle between the nation's two largest shipping companies, some unionized UPS workers say they are being forced to write letters to their lawmakers in support of more stringent labor rules for arch rival FedEx. Officials with UPS and the International Brotherhood of Teamsters, which represents 240,000 UPS drivers, acknowledge that the company has paid for workers' time to pen many of the letters and has supplied the envelopes, paper and stamps needed to mail thousands of them to Congress. Internet sites dedicated to UPS-related discussions feature dozens of accounts from anonymous employees who in recent weeks have said they were forced to write the letters or felt they would be punished for not doing so. Such tactics could run afoul of both labor laws and lobbying disclosure requirements, according to legal experts."

As one New York Times blogger put it: "More and more businesses have concluded that they are better off figuring out ways to avoid using the Postal Service, whose bureaucratic mindset simply isn’t as customer-friendly as it needs to be. It is hard to see how the Postal Service’s decline will be stemmed anytime soon."

The latest copy of the National Association of Postmasters of the U.S. electronic governmental affairs newsletter is available on the NAPUS web site.

August 7, 2009

According to Politico, "The Senate Ethics Committee has dismissed ethics complaints against Sen. Chris Dodd and Sen. Kent Conrad in the Countrywide Financial inquiry, saying it found no credible evidence of a Senate ethics violation." [EdNote: So, when is PMG Jack Potter going to be given a clean slate?]

The Sun-Sentinel has reported that "Congressman Ron Klein took the plea of Boca Raton city leaders to the highest postal official this week. In a letter to Post Master General John Porter, Klein asked that the city's downtown post office be spared from closure. Postal officials recently announced almost 700 post offices nationwide could be closed or consolidated due to financial difficulties. Mayor Susan Whelchel and County Commissioner Steven Abrams convened a news conference on Monday to urge Klein to stand behind the downtown post office at 170 NE 2nd St. The facility is central to downtown redevelopment and serves a large swath of coastal residents and businesses, they said."

As postal commentator Gene Del Polito put it: "There are lies....There are lies....And then there are damn lies! I don't know about you, but I've had my fill of listening to the claptrap peddled on the Hill by the American Postal Workers Union's William Burrus. As they once said about Joseph Goebbels and the Nazi big lie, if you tell an untruth often enough, people just might begin to believe it. What really got me was Burrus' baloney about people being paid four times what postal workers are paid to perform the kind of worksharing that has saved the Postal Service billions of dollars since worksharing's inception. Where are his facts? In reality, he has none."

Hellmail has reported that "Dave Ward, CWU deputy general secretary of the Communication Workers Union, attacked Royal Mail management today, saying they were out to "crush" Royal Mail."

The U.S. Postal Regulatory Commission has an exciting employment opportunity for a highly motivated person with experience in Microsoft Server based LAN/network administration.

It's official: "President Barack Obama today designated Commissioner Ruth Y. Goldway Chairman of the Postal Regulatory Commission, succeeding Dan G. Blair."

Advertising Age has noted that "Only 5% of web users in Russia and the Ukraine currently shop or bank online, while Estonia and Poland boast 10 times that percentage. Polls indicate online shopping is being conducted by only 8% of respondents once a month. In Poland and Austria, monthly online shoppers clock in at nearly 30%. Meanwhile, after several years, Molotok.ru (Russia's eBay) has still not become a significant RuNet player. Despite slow online-commerce development, 55% of Russian web users take advantage of e-mail services. Monitoring news online is popular among 48.6% of RuNet users, while 21.5% download music, videos and photos on a daily basis. Thirteen percent of users exchange files over the internet, while 12% play online games. And while the penetration of credit cards into the Russian consumer market has been limited, stunting online payment capabilities, SMS purchasing remains popular, with many Russian consumers making low-price purchases via mobile phone."

Media Daily News has reported that "The list of magazine casualties keeps on growing. That latest victim is Southern Accents, a bimonthly title from Time Inc.'s Southern Progress Corp., which is closing after its September/October issue. Southern Accents was a regional lifestyle title targeting women with a taste for refined elegance associated with classic Southern homes and gardens; it also covered travel, fine arts and antiques. But its high-end appeal couldn't save the magazine from the same recessionary forces that hit other shelter and homemaking titles beginning with the collapse of the housing market in 2006. In the first half of the year, ad pages dropped 37.4% compared to the same period in 2008, from 282 to 176."

According to the Pensacola News Journal, "Given the Postal Service's structure, with 80 percent of costs in salary and benefits, that is obviously where the money is. And right now it is facing a heavy burden to pay for a retiree health-benefit fund. Can it afford it? If not, it's time to cut back. Congress has to decide, too. It can increase subsidies, require drastic cost-cutting that risks making the system even less cost-effective, or even decide that it no longer makes sense to maintain a universal postal system. If it does make sense, then Congress might have to steel itself to providing growing subsidies. The question is whether it is worth it to maintain a government postal system dedicated to universal service, despite the fact it means an unbalanced cost-revenue equation. The alternative is to let private companies handle all mail, which likely means a drop in service to some areas, especially rural communities, or else higher postage rates for service to those areas."

The Richmond Times-Dispatch has noted that "A recent bit of news from Europe caught our attention. The center-right government of France is pushing through a privatization of postal services, following the lead of other countries such as Germany, the Netherlands, and New Zealand, which have opened up their mail delivery systems to competition. Beginning in 2011, mail services throughout the European Union will be deregulated and thus opened to competition. Now, our Western European friends could hardly be considered free-market ideologues. (France's government-mandated 35-hour workweek springs to mind as a classic example of Old Europe's aversion to rough-and-tumble capitalism.) If even they are ending their postal monopolies, why can't we? The nations that have pursued reform have seen postal rates fall and labor productivity rise. The USPS has absorbed billions in taxpayer-funded subsides over the years, so Americans get hit twice in our current system: first through artificially high rates -- and then by getting stuck with the bill when the government monopoly can't turn a profit. So what's stopping U.S. postal reform? FedEx and UPS have both shown how private delivery companies can innovate and compete for consumers. With the federal government running trillion-dollar deficits for the foreseeable future, we should all be on the lookout for ways to cut costs. Postal privatization (or deregulation) would be a small step in the right direction."

As one writer for the Philadelphia Tribune put it: "the U.S. Postal Service is a perfect example of what happens when a fat monopoly is challenged by the influx of hungry competition, but blindly refuses to change the status quo. Back when the USPS was the only game in town, the lines at the local branches of the post office were interminably long; and at the end of the wait, you could look forward to being served, if you want to call it that, by a surly employee who clearly wished you would just go away and leave them alone. Home delivery wasn’t much better. Mail was missing, delivery was inconsistent, credit cards and entire identities were routinely stolen. I personally knew a carrier who dumped entire bags of mail down the sewer. That was yesterday’s postal service. Then, starting about 20 years ago, the USPS found itself facing stiff and increasingly effective competition — first from UPS, FedEx, DHL and the other reliable overnight delivery services, and then later from the Internet, when e-mail and text messaging revolutionized written communications. How did they react? How did today’s postal service respond to this threat to its very existence? One trip to your local post office will tell you. The lines are longer than ever and the employees are surlier than ever. About the only thing that has changed is the price of stamps."

According to the Associated Press, "Postmaster General John Potter is trying to think outside the mailbox."

According to the News-Journal, "We suspect the interests of too many members of Congress also include beating up easy targets and standing in the way of real solutions. Take the U.S. Postal Service. (Please.) For years, members of Congress have beat up the federal agency because of service and cost issues. Congress has demanded solutions in breath one and then railed against proposed solutions in breath two. American voters shouldn't let their representatives have it both ways. The time has come for the closure and consolidation of lesser-used facilities, and the time has come to end Saturday delivery. Yes, those cuts will be painful. The fact is that e-mail, private delivery services and electronic billing and payment services have combined with other factors to reduce the need for a federal postal service. Consolidations, closures and the end of Saturday delivery would at least stem the increases in postal costs so people who continue to depend on the federal service do not continue to face constant price increases."

The Nation has reported that "Thailand Post Co Ltd is offering a 5 per cent discount on shipment services to the small and medium-sized enterprises on the list of the Office for Small and Medium Enterprises Promotion (OSMEP). The discount from Aug 12 to Apr 30, 2010, is to help the SMEs better manage their distribution costs, said Anusara Chittmittrapap, senior executive vice president for marketing and business development. Meanwhile, the company also puts the SMEs' products on its catalogues and offers e-commerce market place for the products on its own website and websites of postal partners in Asean."

Hellmail has reported that "Royal Mail slammed the CWU yesterday for announcing it intended to ballot union members for national strike action, despite both sides having agreed a timetable for further talks on change, just a week ago. Royal Mail said it was stunned that the Communication Workers Union would undermine Royal Mail's attempts to preserve as many jobs as possible, by calling on members to vote for a national strike which would damage customer confidence in the service and undermine the entire UK postal industry at a time when UK mail volume was dropping by almost 10% year on year. Royal Mail said it had last week met with the union and agreed a timetable for a new programme of talks about the final stage, phase 4, of the 2007 Pay and Modernisation agreement but that the CWU was ignoring its requests to engage and was clearly out to block change and modernisation and to absolutely oppose Royal Mail's goal to make Royal Mail a strong and innovative leader in the UK and international postal markets."

The Lewiston Sun Journal has reported that "U.S. Sen. Susan Collins, R-Maine, expressed frustration with the continued financial woes of the U.S. Postal Service during a committee hearing Thursday morning in Washington, D.C.  "The Postal Service is the linchpin of a $900 billion mailing industry that employs 9 million Americans in fields as diverse as direct mail, printing, catalog production, paper manufacturing and financial services," Collins said during her opening statement at the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management hearing."

Missed yesterday's hearing? You can still see it by going to the Senate subcommittee video archive.

 
The latest issue of the
PostCom Bulletin is available online.
 In this issue:

  • On August 6, 2009, the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security held the second in a series of oversight hearings on the U.S. Postal Service. Testimony was presented by Postmaster General John E. Potter, Postal Regulatory Commissioner Ruth Goldway, Postal Service Inspector General David Williams, OPM Associate Director Nancy Kichak, and the Government Accountability Office's Director of Physical Infrastructure Phillip R. Herr, National Association of Letter Carriers President Frederic Rolando. American Postal Workers Union President William Burrus, National Association of Postmasters President Dale Goff, Williams-Sonoma Postal and Legislative Affairs Director James West, and NewPage Corporation Executive Chairman Mark Suwyn.
  • Legislative relief, service performance, and continuing financial losses were the major themes of the USPS Board of Governors open session held this week. The year-to-date adjusted net loss is $4.7 billion for the Postal Service, while it lost $2.4 billion in Quarter Three. The USPS volume was down 14.3% over the same period last year. The Postal Service is well on its way to meeting its 100 million workhour reduction goal, with cutting 88 million year-to-date, the equivalent of a reduction of 57,000 full-time employees.
  • Postmaster General Jack Potter and Chief Financial Officer, Executive Vice President Joe Corbett met with the media this week to discuss the U.S. Postal Service's current financial condition. Potter points to the 2006 federal statute and the recession as the reasons why the USPS is facing such fiscal solvency.
  • The Postal Regulatory Commission (PRC) recently released its Review of Retiree Health Benefit Fund Liability as Calculated by Office of Personnel Management and U.S. Postal Service Office of Inspector General. The PRC estimated an annual payment of $3.4 billion is needed for the USPS to adequately prepay its retiree health liability.
  • In light of the two recent bills being discussed on Capital Hill, it is important to understand the impact on the current fiscal solvency of the USPS. The figure below, presented by PMG Potter at a recent media briefing shows the USPS' financial projections for the end of this fiscal year with and without the Retiree Health Benefit payment.
  • Reading recent news reports about the Postal Service, one would think that it is on its deathbed. While times are dire and a major restructuring is in order, the underlying business may be better than what some of its competitors face even if the Postal Service's ability to remain a sustaining enterprise under the current business model looks increasingly unlikely. The Courier, Express and Postal Observer tell you why it thinks the future of the mail business is positive even though the Postal Service's situation is dire.
  • In testimony presented before the Senate Committee on Homeland Security and Government Affairs on August 6, 2009 Williams-Sonoma Postal and Governmental Affairs Director James West said that it is imperative that mail volume be stabilized. Without a doubt, increased postage costs on consumers or commercial mailers will only serve to drive more mail out of the system. Any increase, especially an exigent rate increase to cover expected losses, must be avoided. Processing facilities and retail services likewise must be brought in line with mail volume. Prudent business practices dictate that a company must continually modify its infrastructure to match the volume of its business and the USPS can no longer be an exception. Completing the transformation of the USPS into a modern business enterprise will require more and sometimes difficult support from Congress.
  • Dead Tree Edition has asked: "With the U.S. Postal Service struggling to make ends meet, could it cut its losses by getting rid of the money-losing Periodicals Class or at least by jacking up Periodicals rates?"
  • USPS may close up to 1,000 post offices. Postal Service expands MTAC workgroup. USPS business model under threat. Kucinich wants reassurances. APWU opposed . . . .NO sympathy for usps from newspaper. So where's the growth.
  • A quick update on postal notices published in the Federal Register.
  • Updates on dockets at the Postal Regulatory Commission.
  • An update on DMM Advisory notices issued by the U.S. Postal Service.
  • A review of postal news from around the world.
  • Postal previews.
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At the Postal Regulatory Commission:

As The Hill put it: "The United States Postal Service (USPS) is in financial disarray, with plummeting levels of mail being sent and heathcare costs for retirees increasing."

According to Dow Jones, "The U.S. Postal Service is seeking permission from Congress to enter new lines of business, hoping to boost revenue at a time when traditional mail volumes are posting double-digit losses, putting the Postal Service into a deep financial hole. A green light from lawmakers could allow 30,000 post offices to offer banking and insurance products, renew drivers' licenses or sell pre-paid cellular telephone service, offsetting hits from the recession and a shift to electronic bill payment. "

According to the Charlottesville Daily Progress, "achieving savings to offset declines in mail volume and revenues will not be easy for a creature of government that confronts a host of politically charged issues, from closing rural postal retail stations to eliminating Saturday deliveries. The support and collaboration of Congress, the Postal Regulatory Commission, businesses and other large postal customers are essential if the USPS is to deliver successfully on a mandate to break even. The USPS needs to start afresh on a plan for restructuring, one which it probably should hand-carry — rather than mail — to Congress and the GAO."

GovExec.com has reported that "To stay afloat, the U.S. Postal Service needs immediate relief from a congressional mandate that requires the agency to make advance payments to its retiree health fund, witnesses and lawmakers said during a hearing on Thursday. But union leaders and senators clashed over amendments to a relief bill that would affect contract negotiations set to take place in 2010 and 2011."

According to the AFL-CIO, "we need another round of economic recovery action. At its recent meeting, the AFL-CIO Executive Council called for a second round of recovery, specifically urging Congress to: Bolster the financial stability of independent government agencies such as the U.S. Postal Service."

Free Speech Radio News has reported that "Email and the economic crisis put US Postal Service in the red."

According to Forbes, "The Postal Service has sharply cut costs and staffing, Potter added, but also needs to look to additional sources of income. He said in Australia people can renew driver's licenses in post offices, while Italians can do their banking and other countries' post offices handle insurance. The U.S. post office is not exploring these particular ideas, he said, but "other countries faced with the same dilemma have explored these areas." He suggested that Congress allow the post office to consider some activities that have not traditionally been part of the post office, adding he assumed that would come with limits or regulations."

August 6, 2009

The folks over at Rag Content have asked: "Is privatization the answer?"

Expect an announcement that Ruth Goldway has been named by the President to serve as the newest chairman of the Postal Regulatory Commission.

Advertising Age has published a piece on "A Guide to Magazines That Have Ceased Publication."

From NewsLink: "PMG Jack Potter today testified before a Senate panel responsible for USPS oversight, stressing the need for a “fundamental restructuring” of the Postal Service’s legislative and regulatory framework. He said such changes are “critical to future growth” of the organization."

The Journal of Commerce has reported that "DHL agreed to pay $9.4 million to settle allegations it violated U.S. export controls for shipments to Iran, Sudan and Syria, the government said Thursday. Export regulators alleged the express carrier violated Office of Foreign Asset Controls regulations between August 2002 and March 2007, making more than 300 shipments to Iran and Sudan. Regulations bar shipments for most goods under Iran transaction and Sudan sanction regulations. DHL further violated regulations by failing to maintain records on other shipments to Iran, government officials said. Waybills allegedly lacked required descriptions of the goods."

"The U.S. Postal Service In Crisis" Before the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security.

See the running summary recorded from this hearing.

Member Statements Witnesses Panel 1
  • The Honorable John E. Potter [view testimony]
    Postmaster General 
    United States Postal Service
  • The Honorable Ruth Goldway 
    Chairman-Designee
    Postal Regulatory Commision
  • Mr. David Williams [view testimony]
    Inspector General 
    United States Postal Service
  • Ms. Nancy Kichak [view testimony]
    Associate Director, Strategic Human Resource Policy 
    U.S. Office of Personnel Management
  • Phillip R. Herr 
    Director, Physical Infrastructure Issues 
    Government Accountability Office
     
Witnesses Panel 2
  • Mr. Frederic Rolando [view testimony]
    President 
    National Association of Letter Carriers
  • Mr. William Burrus [view testimony]
    President 
    American Postal Workers Union AFL-CIO
  • Dale Goff [view testimony]
    President 
    National Association of Postmasters of the United States
  • James West [view testimony]
    Director of Postal and Legislative Affairs 
    Williams-Sonoma, Inc.
  • Mr. Mark Suwyn [view testimony]
    Executive Chairman 
    NewPage Corporation

Press Release: "U.S. Postal Service Governor Katherine Tobin has been appointed Deputy Assistant Secretary for Performance Improvement in the Department of Education’s Office of Management and will be leaving the postal governing board effective Aug. 30."

The Washington Times has reported that "Some members of Congress have seemed reluctant to agree to close post offices. Mr. Potter said that move remains in the review stages. He said an initial list of about 3,200 facilities considered for consolidation or closure has been narrowed to about 800. There are more than 36,000 post offices nationwide."

The Daily Pennsylvanian has reported that "In a move to increase sustainability efforts at Penn, the University's Mail Services has recently decided to end the distribution of unsolicited mail to the College Houses. The U.S. Postal Service will no longer deliver unsolicited mail - letters sent without a specific campus address, such as general advertisements - for distribution by Penn Mail Services."

Marketing Daily has noted that "Perhaps a sign that the economic doom is lifting, U.S. households are starting to receive more credit card offers from certain banks. Card mailers that ramped up their mail volumes in the second quarter this year included Bank of America (77% more than the first quarter) and Citibank (up 65%), according to Synovate's Mail Monitor, a credit card direct mail tracking service."

The BBC has reported that "Over 25,000 postal workers will stage a series of strikes from Friday to Tuesday over pay and jobs, the Communication Workers Union has said. Services across the UK, including in London, Scotland, the West Country, East Anglia and the Midlands will be affected, the union added. London and Scotland have already witnessed stoppages in recent weeks. Royal Mail said over 90% of staff would keep working and the "vast majority" of services would operate normally." See also Reuters, the Daily Express, and Bloomberg.

From Newsday's quotations of the day: "Every major postal policy, from employee pay, to days of delivery, to the closing of postal facilities must be on the table. Without major change, the day will soon come when the Postal Service will be unable to pay its bills." — Government Accountability Office after adding the Postal Service to its list of troubled agencies, saying serious and significant structural financial challenges face the agency.

Hellmail has reported that "Latvian Post has announced it is introduce extensive cost saving measures in an attempt to put the service on a stronger financial footing. Latvian Post, which has already cut the Board's remuneration by as much as 50%, said that increasing operational efficiency would be essential."

The Guernsey Post has reported that "ending Guernsey Post’s monopoly could be disastrous for the States utility, according to its chief executive."

CNNMoney has reported that "The U.S. Postal Service reported a $2.4 billion loss in its most recent quarter Wednesday, blaming plunging mail volume and rising retiree health care costs. The USPS, which is not a government agency but is exempt from taxes and antitrust law, lost $1.1 billion a year earlier. The service said it expects to suffer a $7 billion loss for its full fiscal year ending in September. Operating revenue fell 8.8% to $16.34 billion. Contributing to that revenue decline was what the service called an "unprecedented" drop in mail volume. In the nine months of the fiscal year, volume has fallen by 20 billion pieces, the USPS said in a regulatory filing. The Postal Service expects mail volume to decline another 10 billion to 15 billion pieces in fiscal 2010."

According to Gigaom, "Sure more business is being done online, but there is no correlation between Internet adoption rates and a drop in mail — both have been generally rising over the past 15 years, at least until mail service fell off a cliff over the past few months. It’s likely that the Internet is playing a role, but I don’t think all the blame can be placed on technology. A look at the history of total mail volumes shows that declines around recession years are not uncommon, with particularly large drops occurring in the 1930s. Additionally, the service’s package delivery competitors, like FedEx and UPS, don’t show a comparable drop in revenue, though it’s not a great comparison as those company’s routes have traditionally been more profitable than the Postal Service’s — plus, as a publicly traded company, FedEx has more of an obligation to be profitable than the government-run USPS. Though, as one of the few legal monopolies, shouldn’t the post office, with no competitors in most of its market (federal law states the USPS is the only organization that can deliver “non-urgent” letters like First Class and bulk mail), be able to make a profit?"

The Economic Times has reported that "The ban on entry load on mutual funds (MFs) has struck its first blow to the asset management industry, with the government-run India Post stopping the distribution of MF schemes through its designated post offices."

Multichannel Merchant has reported that "Despite the financial crisis burdening the U.S. Postal Service, Postmaster General John Potter says there won’t be any exigent rate case. At least not this year. While the USPS expects to lose about $7 billion during its fiscal year, which ends Sept. 30, that fiscal reality won’t force an immediate rate case. “We’re reviewing everything as to where we can cut costs,” Potter said during today’s conference call regarding the USPS’s third-quarter financial results. “There are some rumors out there we’re going to raise our rates double digits,” Potter noted. “That would only compound the volume problem.”

GovExec.com has reported that "The U.S. Postal Service on Wednesday announced a loss of $2.4 billion in its third quarter, underscoring the financial woes of an agency already groaning under the weight of the recession. USPS reported a $1.6 billion decrease in revenue between April and June, and a total net loss of $4.7 billion so far for fiscal 2009. It has now suffered net losses for all but one quarter in the last three fiscal years. Some attribute the staggering net losses to a requirement, approved by Congress in 2006, that the Postal Service make advance payments to cover the costs of health benefits for retirees. Sen. Thomas Carper, D-Del., chairman of the Homeland Security and Governmental Affairs Federal Financial Management Subcommittee, wanted Senate leaders to bring to the floor this week legislation that would tweak the timing of those payments and give USPS more flexibility to borrow funds to cover costs. But Majority Leader Harry Reid, D-Nev., is not expected to bring up the bill until after the August recess."

At the Postal Regulatory Commission:

FedEx Trade Networks is opening new offices in Asia and Latin America to expand its international freight forwarding capability. The new Asia offices are in Singapore, Taiwan, and in Qingdao, Beijing, Guangzhou and Shenzhen, China. In Latin America, the company opened an air and ocean forwarding office in Sao Paulo, Brazil. FedEx Trade Networks, a subsidiary of Memphis-based FedEx Corp., has additional plans to expand its global freight forwarding operation throughout Asia, Europe, the Middle East, Africa and Latin America. These new offices support those plans.

   

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HAVE YOU HAD IT WITH
"DO NOT MAIL" MANIA?
Then be sure to read:

* The Environmental Impacts of the Mail: Initial Life Cycle Inventory Model and Analysis (USPS study)
* Informing The Dialogue: Facts About Mail And The Environment (SLS Study) 
* Informing The Dialogue: Facts About Mail And The Environment (SLS Study) 
* The many documents that serve as backup  (SLS Study) 
* How To Deal With "Do Not Mail" Mania (PostCom) 
* What You Need to Know About
Mail, the Economy, and Society
(PostCom) 
* U.S. Constitution, Article 1
Section 8:
"The  Congress 
[not the States] shall have power...To establish post offices and post roads."

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