Funding retiree healthcare in the Private Sector

At the joint Senate-House hearing, the issue of funding the Postal Service’s retiree health care obligation was raised by every witness.   There is near unanimity among all non-governmental stakeholders on this issue which can be summarized in four bullet points. The Postal Service cannot be a viable enterprise, maintain current service levels, pay wages at or near current levels, and price products at levels that allow mail to be a competive mode for delivering advertising, other firms of business and personal communications and parcels as long as the retiree health obligations hang over its head.   The Postal Service’s obligation has been overstated by the Office of Personnel Management. The Postal [...] Read more »

Why the First Mile Matters

Many postal commentators have suggested that the Postal Service take a last mile strategy, focusing on the advantages that the delivery network offers shippers and advertisers for a low cost solution.   What these commentators miss is that a last mile strategy results in an enterprise that has little control over what it handles and little understanding as to what the mailer or shipper really needs for service. FedEx and UPS and for that matter Pitney Bowes, Valassis, and Val-Pak all have first-mile strategies, working closely with customers to ensure that their shipping or mailing needs are met from the point of production until delivery.  All of these customers invest heavily [...] Read more »

How Smart Post Makes FedEx More Profitable

In the conference call with analysts this week, Mike Glenn, President and CEO of FedEx Services, explained how Smart Post makes FedEx more profitable. One of the key advantages that we have in our ability to not only deliver solid growth rates, but yield improvement at the same time is the ability to balance our ground and home services with SmartPost.Customers that are benefiting from e-commerce and e-tailing in general tend to be growing at higher rates. At the same time, many of those companies produce packages that result in lower yields for us. While we’re prepared to handle that traffic, we’re going to ship that traffic where appropriate into [...] Read more »

National Envelope Company Bankruptcy Details

A Bloomberg story has more details on the bankruptcy that provides some guidance as to how tough the decline in mail has been on the envelope business. NEC began defaulting on the bank loan agreement in 2007.  The problems facing produces of envelopes to be mailed began showing up well before the recession.  In May, the lenders called a default on the latest forbearance agreement when a buyer wasn’t signed to a letter of intent before the May 12 deadline. NEC received four bids in early May after extensive marketing, according to court papers. Assets and debt are both less than $500 million, according to the bankruptcy petition. Liabilities include [...] Read more »

National Envelope Company Bankruptcy

The Wall Street Journal reported that the National Envelope Company, the largest envelope manufacturer in the United States filed for bankruptcy today. The bankruptcy filing indicated that the company had between $100 and $500 million in both assets and liabilities.  The company is family owned. National Envelope Company is unlikely to cease operations under bankruptcy.   The bankruptcy proceeding will allow it to renegotiate existing contracts with employees  and vendors, renegotiate terms of loans, and renegotiate or terminate real estate leases that could not be completed outside of bankruptcy.  National Envelope Company’s bankruptcy follows a nearly two year process during which it has been consolidating operations.   During this period it [...] Read more »