USPS’ December – Better But Still on the Precipice

USPS finances marked steady improvement on a month-by-month basis in its first fiscal quarter.  These improvements allowed it to earn a small operating profit in the December and a smaller than forecast loss for the quarter.   The improvements while promising do not suggest that within the foreseeable future the Postal Service can earn a sufficient operating profit to sustain the enterprise even if its retiree obligations are removed. What does the data tell us? Revenue and Volume In general, the trends in revenue and volume suggest that the Postal Service’s business is now recovering at about the same pace as other advertising and parcel delivery modes.  The economic recovery is [...] Read more »

USPS Presentation of Action Plan

February 23, 2010 Contact: Sue Brennan 202.268.6363 Action Plan for the Future of the U.S. Postal Service Postmaster General John E. Potter to give briefing What: Postmaster General John E. (Jack) Potter is hosting a conference to address  the future of the U.S. Postal Service and to announce new business model Who: John E. Potter, Postmaster General and Chief Executive Officer Louis J. Giuliano, Chairman, Board of Governors, U.S. Postal Service Meldon J. Wolfgang, Partner/Managing Director, The Boston Consulting Group Thomas Dohrmann, Principal, McKinsey & Company When: Tuesday, March 2 9 a.m. – 12 noon Welcoming Remarks                                            Chairman Giuliano Introductory Remarks                                           PMG Potter Projecting U.S. Mail Volumes to [...] Read more »

Postal Service in Triage

Anyone who has ever been in an emergency room has had to deal with a triage nurse.   The triage nurse’s job is to conduct an initial assessment of every patient that comes for emergency treatment and prioritize the patients based on the severity of their illness or injury. Triage gets complicated when there is second door for patients that come in ambulances.   These patients skip the triage nurse and may have their first assessment by the emergency room nurse or physician.  This second door may allow a patient who is less sick than one who is driven to the emergency room to see a physician faster, or at least be [...] Read more »

Time to Make Flat Rate Boxes More Convenient

The Postal Service has created a strong marketing campaign around flat rate boxes.  But there is a better way to offer a flat rate service more convenient and more profitable,    It is remarkably simple. Allow flat rate box rates for any box meeting required dimensions.   To assure compliance certify boxes sold by third-parties as meeting the size requirements. Sell flat rate stamps like stamp books and around the size of half a book of stamps.  flat rate stamps could be sold in supermarkets using current procedures for stamp consignments. Sell flat rate stamps like high value lottery tickets.  Print them on a roll with each stamp numbered to prevent fraud.  [...] Read more »

Analizing the Postal Service as a Cancer Survivor

Many of the readers of this blog have known me for many years either through work I have done related to the postal industry or from presentations at international conferences.   These readers know that since 1996, I have been a somewhat flinty survivor of oral cancer; having gone through chemo and radiation in 1996 and 1997, surgery in 2000 and surgery in 2007.   As far as I am concerned, I have been cancer free since 2000, but my last surgery left me with more serious speech defects and the inability to swallow.   This experience, and the financial challenges that significant illness creates has in many ways aided me in my [...] Read more »

Is it Time to Choose Alternative Delivery?

Mailers face greater uncertainty today than ever before about the future of the Postal Service.  Mailers face the real possibility that rates could begin rising faster than inflation in 2011 and beyond if the Postal Service’s volume projections do not pan out or Congress fails to make all of the changes necessary to ensure a viable postal enterprise.  The face the likelihood of less service as the Postal Service switches to 5-day service and less certain service as the inevitable glitches arise during the transition. So what should a mailer do? Most mailers have few options.   If they want to delivery to households, access to the mailbox is key [...] Read more »

Potential 5-day Delivery Implementation Schedules

A previous post, “Is 5-Day Delivery Inevitable?“, laid out a potential schedule for when the Postal Service could implement a switch to 5-day delivery.   As the Postal Service’s filing with the Postal Regulatory Commission is coming in the matter of weeks, this post takes a second look at likely implementation schedules for stakeholders to think about.   This post lists four potential schedules: a fast track schedule; a standard track; a slow track due to longer PRC review than the USPS anticipates; a slow track due to longer time to get Congressional action. Fast Track Schedule – assumes a short PRC review and Congress acting either just before the 2010 election [...] Read more »

Walking Between the Law and Disaster

The Postal Regulatory Commission held its public forum on the Postal Service’s Annual Compliance Review (ACR) yesterday.   The tenor of the discussion suggests that the Commission facing the challenge in this proceeding of walking the fine line between the law and disaster. Simply put, the ACR proceeding raises two questions relating to the law. Did the Postal Service’s ACR filing show that it complies with the requirements of 39 U.S. Code to 1) provide prompt, reliable, and efficient services to patrons in all areas[39 U.S.C. § 101 (a)] ; and 2) “to assure adequate revenues, including retained earnings, to maintain financial stability?” [39 U.S.C. § 3622(b)(5)]. If it did not, [...] Read more »

IRS Cracks Down on Worker Status Abuse

The Associated Press has reported that the IRS and many states are cracking down on on the widespread use of the contractor model for workers.    By using the contractor model, the company saves the cost of payroll taxes, workers compensation expenses, and unemployment insurance levies.    The interest in this issue is likely driven by declining tax revenue during the recession as well as pressure by labor unions and competitive businesses that use an employee model.  In its most recent report on the topic, the Government Accountability Office estimated that employee mis-classification resulted in the underpayment of an estimated $2.72 billion in Social Security taxes, unemployment insurance taxes and federal income [...] Read more »

Closing the USPS’ Income Gap

The Public Representative performed a service for postal stakeholders in their estimates of the required rate increases to return the Postal Service to break even by 2011 under various estimates of the Postal Service’s retiree obligations. These estimates represent the worst case scenarios for mailers as they assume that the return to break even could only come from increases in rates. Unfortunately for mailers, the Public Representatives estimates of rate increases are not enough to return the Postal Service to self sufficiency. Simply put, the break even goal for 2011, a goal that guided rate cases under the Postal Reorganization Act, is not sufficient to ensure a financially viable Postal [...] Read more »