Mailing/Fulfillment - Postal Trends

The Postal Service lost $8.5 billion last year, despite deep cuts of more than 100,000 jobs and other reductions in recent years. The man leading the Postal Service through this tumultuous time is Postmaster General John Potter, who is retiring at the end of this week. But first he joined the Federal Drive for an exit interview.

Before he leaves, Potter has developed a 10-year plan for the future of USPS, including getting it out of the current financial crisis. Bringing the Postal Service back to black must begin, Potter said, with changing the way the pension system

Of the 290 business mailers surveyed by USPS’s Office of Inspector General, 58 percent said they did not use Full Service IMbs (Intelligent Mail barcodes) because of high start-up costs and software requirements. Only 23 percent of the surveyed mailers said they were using Full Service.

“The man hours that go into making a mailing Full Service compatible are not worth the postage discount,” said one large mail owner (more than 1 million pieces annually). Another estimated it would have to spend more than $100,000 on new print heads and software upgrades to be able to create Full

Because the Postal Service is seeking a ruling on how to calculate its rate cap, mailers will probably have to wait a few weeks before learning what rate increases are in store for next year.

USPS asked the Postal Regulatory Commission yesterday to determine “the amount of unused rate adjustment authority when rate adjustments are more than 12 months apart.” The issue is especially murky because the PRC’s rules for determining the inflation-based price cap on most postal rates (including First Class, Standard, and Periodicals) did not anticipate periods of deflation, as occurred in late 2008.

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To understand how Congressional leaders exert influence over the supposedly independent U.S. Postal Service, consider the agency’s mail-processing centers in West Virginia. As long as the late Sen. Robert C. Byrd, sometimes known as the Prince of Pork, ruled the Senate Finance Committee, the 11 mail-processing centers in his home state were safe. Though West Virginia had more such centers per capita than nearly any other state, the Postal Service’s efforts to consolidate its processing network somehow bypassed the Mountain State.

But all that has changed in the past five months, during which the Postal Service’s AMPS program

Regardless of what happens in the Court of Appeals for the District of Columbia, the appeal is likely to be a winner in the court that really matters for the Postal Service—Congress. Win, lose or draw, there’s not enough money at stake in the exigency case (“only” $2.3 billion) to fix the Postal Service’s finances.

The only potential solutions big enough to stanch the bleeding seem to be reforming retirement-benefits payments that shift money from USPS to the federal government, reducing days of delivery, or some kind of radical downsizing. Congress is the key,

Postage rates are likely to increase about 1.7% in January as a result of a letter that the Postal Regulatory Commission's chief lawyer issued today. When the PRC established its rate-making rules, "little attention was given to the possibility that during periods of deflation, the Postal Service might accrue negative rate authority," PRC General Counsel Stephen L. Sharfman acknowledged in a letter to his counterpart at the U.S. Postal Service. That's why the Postal Service sought Sharfman's advice in how to interpret the law and regulations that limit increases in most postal rates to changes in the Consumer Price Index.

The U.S. Postal Service is teetering on the brink of financial collapse and is very close to running out of money. Its fate appeared sealed on Tuesday when Congress decided not to give USPS about $4 billion in financial relief as part of the temporary spending measure it will pass before the recess.

So what does this mean for mail customers only concerned about sending and receiving mail? It means the possibility of delayed mail deliveries if the Postal Service runs low on cash and has to furlough workers.

The U.S. Postal Service’s cost to deliver a magazine or newspaper has been rising twice as fast as inflation for more than two decades, but don’t blame employee pay levels. The real culprit is declining productivity, the Postal Service’s own numbers indicate.

“The tendency of Periodicals costs to increase much faster than inflation...has continued with few interruptions since FY1986,” postal expert Halstein Stralberg wrote recently. As a result, the Postal Service has repeatedly hit the Periodicals class with rate increases that exceed both inflation and those for most other classes, as it is trying to do again in the

By Sen. Susan Collins. This postal rate hike, far beyond the inflation rate, is inconsistent with the law. The 2006 postal reform act was intended to produce pricing predictability and stability, allowing the Postal Service to raise rates up to the consumer price index without going through a litigious, expensive process.

As the principal author of that law, I know, however, that the Postal Service has the authority to increase rates above the inflation rate only if it demonstrates “extraordinary or exceptional circumstances.”