Potential Business Models

The range of potential business models include nearly a continuum of options that run the gamut from a government department to a corporation owned by private shareholders. How close a particular model is to one end of the continuum or the other depends on choices regarding to corporate governance, employment and labor law, financial management, operations management and marketing management. This paper divides potential models into two groups, governmental and corporate models, depending upon whether the characteristics of the model are more similar to the characteristics of the models on either extreme of the continuum. In total five models were looked at: Governmental Models Government Department – This is how [...] Read more »

Challenges Facing All Potential Business Models

Potential business models all have to deal with eight challenges. They are: Maintaining Mail’s Importance to the Economy – The mail industry is responsible for over eight million jobs and $800 billion in economic activity.The business model can accelerate or retard economic growth depending on how well it serves customers that need mail delivery. Minimizing Financial Risks to the Federal Treasury – At the end of the third quarter of 2009, the Postal Service’s obligation to the Treasury for debt, retiree health benefits and workers compensation payments is $ 72.7 billion. Ensuring Financial Self Sufficiency – Since the passage of the Postal Reorganization Act, financial self sufficiency has been an [...] Read more »

Choosing a Mail Industry Policy

In choosing a potential business model for the Postal Service, policymakers are as much choosing a path for the entire industry within which the Postal Service operates as choosing a path for the Postal Service itself. The United States Postal Service is only one supplier within a much larger communications and parcel delivery market.This industry supplies households, businesses, government entities, and other organizations that need to: Solicit, conduct, and complete transactions; Distribute advertising, news, and other types of information; Communicate with friends, family, and business associates; and Deliver packets and parcels. The public face of the Postal Service is its service to individual citizens through its 6-day delivery service and [...] Read more »

Future Business Models for the USPS

The Postal Service has just posted on its website five papers on potential business models. Besides a paper presented by the Postal Service, four papers were prepared by independent consultants. As one of the four consultants, I will not comment on the other papers at this time.The papers are lengthy and total over 200 pages so I urge those interested in the future of the Postal Service to download the papers and read them carefully as they all provide useful insights about the problems at hand. In the next three posts, I will provide the readers of this blog with the executive summary of my paper. The links listed below [...] Read more »

Job Cuts or Wage Cuts (2)

According to Radio Netherlands Worldwide, the Dutch postal union has agreed to an new contract with TNT that chose job cuts over wage cuts. The union agreed to the contract once it realized that the job cuts were inevitable. Immediately, 5,000 postal employees or around 22% of all postal employees will be laid off. An additional 6,000 jobs will be eliminated with retirements, not renewing temporary contracts, and not filling vacancies. When the process is over TNT will have little more than half of the employees the have today. TNT has an advantage over the USPS as it can afford the severance, early retirement incentives, and unemployment expenses associated with [...] Read more »

The Future of the Document is the Future of Mail

In order to understand the future of mail, one needs to first understand the future of the document. The word “document” immediately congers up an image of a written, printed format. That image is too narrow in today’s multi-modal communications world that includes information that can be provided printed on paper but also in numerous forms on a computer display or in text-messages, or other format on a wireless smart phone. At the recent Document forum, Craig Le Clair of Forrester Research illustrated that companies develop three types of documents: Structured documents - identical or nearly identical documents that are sent to a large number of recipients at the same [...] Read more »

The USPS and Apple.

It is about time. The Washington Times reported today that the Postal Service is finally making Click-N-Ship compatible with Apple Computers and the Safari Browser. Apple has a 9% market share. Apple now has a market share among consumers of at least 21%. Consumers are one of the target markets for Click-N-Ship, so this step is probably a year or more overdue. Not being compatible with Apple computers will likely hurt the Postal Service during the peak consumer parcel shipping period starting now. Apple computers are expensive and therefore are likely more common in higher income households that are the heaviest users of mail services. These consumers are driven by [...] Read more »

The End of Mail? (Just Kidding)

In its 10-k, the Postal Service honestly reported that 2009 was a terrible year. Its forecast for 2010 is not much better as it projects: a loss of an additional 10 to 15 billion pieces of mail; an operating loss of 7 billion which means the USPS will have an operating loss of $1.5 billion before accounting for retiree health benefit payments; the need to borrow $3 billion in 2010 and borrowing needs in 2011 that will exceed its statutory borrowing limits; and a continuation of the freeze on construction of most new facilities, which severely limits its capability to optimize its processing and transportation network; and a cut in [...] Read more »

USPS, UPS, FedEx Express and the RLA

The choice of labor law (Postal Reorganization Act (PRA) vs. National Labor Relations Act (NLRA) vs. Railway Labor Act (RLA)) going forward for the USPS may not be clear, FedEx has a clear preference for keeping the FedEx Express Service under the provisions of the RLA. FedEx Express’s current position under the action has been under attack by United Parcel Service and the Teamsters who would prefer that that FedEx Express status be changed so that it would be covered under the NLRA. The change is currently included in HR915, the House version of the FAA Reauthorization Act. This would make it easier for the Teamsters, or any other union, [...] Read more »

Negotiating under the Railway Labor Act

In a recent post (Does Labor Law Matter for the USPS), this blog raised the point that the Postal Service, its labor unions, and other policymakers and stakeholders should think carefully about the potential impact of changing the Postal Service’s labor law. One of the options that is available would have the Postal Service operate under the Railway Labor Act (RLA). The Airline Pilot’s Association provides a detailed overview in question and answer format of bargaining under the RLA. It is presented below in its entirety. Readers interested in seeing all the questions in a list should follow the link the Airline Pilot’s Association website. What is the Railway Labor [...] Read more »