Corrections to Yesterday’s post

I have made two changes to yesterday’s post, The Postal Service Should Default on Its Retiree Health Care Obligation from the original version to correct errors.   Accounts payable replaced accounts receivble in the first paragraph.  Both are bad but as the USPS collects revenue up front it has minimal accounts receivable.  It does have substantial accounts payable and other liabilities that need to be paid for which it does not have needed revenue.  The paragraph on geographically oriented rates would was changed to correct an error regarding rates to high density areas.   Rates there would go down not up.  Geographically oriented rates are used outside of the US by postal [...] Read more »

The Postal Service Should Default on its Retiree Healthcare Obligation

The Postal Service is broke.   It has expenses far above revenue and has contract agreements and accounts payables far above its ability to pay.    Besides payroll its largest obligations are to the Federal government and transportation companies like FedEx.  It cannot afford to offer the services it is required to provide.  A recent report from the USPS Office of Inspector General states that the Postal Service is even less likely to be financially viable under the current operating model if volumes continue to decline. In this financial state, the Postal Service must default in its obligations to the Federal Government and force Congress and the administration to choose between restructuring [...] Read more »

Senator Carper’s Bill: D.O.A

Senator Tom Carper introduced a new postal bill, the ‘‘Postal Operations Sustainment and Transformation Act of 2010’’ (The POST Act of 2010), to modify the Postal Service’s business model on September 23rd.   The bill includes all of the legislative changes that the Postal Service requested as part of its action plan last March.  The strong support that Postmaster General Potter shows for the bill in the press release from Senator Carper’s office confirms that this bill can be thought of as the “Postal Service’s bill.” Unfortunately for Postmaster General Potter, Senator Carper’s bill is effectively dead on arrival.  Why? The bill was introduced at the end of the legislative session.    [...] Read more »

Could FedEx be Beating USPS and UPS in Expanding the use of its Retail Network?

In a story today, the Wall Street Journal reported that Walmart is introducing a program that allows customers to buy online and pick up the item at FedEx Office locations as well as Walmart stores.  Walmart added this delivery option this summer in Los Angeles and Boston, where FedEx has 24 and 18 FedEx Office locations respectively.  In both cities, Walmart has few stores where customers can collect items shipped to a store. This program allows Walmart to sell its products more effectively to customers who are rarely at home during the day.  Also FedEx Office delivery significantly reduces the cost of delivery of large and heavy items making Walmart’s [...] Read more »

Why Tablet Based Newspapers and Magazines will Succeed

The following ad from Newsday illustrates why ipad and other applications will succeed.  Watch it once to get the joke.   Watch it a second time to see how thr reader is holding the iPad.   It looks like the iPad can be physically handled not much differently than a newspaper.  The only problem is bright light that might favor the less expensive Kindle and Nook for books and other text only applications.  This is illustrated in the following ad for Kindle that competes nicely with a printed book. Tweet Read more »

FedEx Earnings – Implications for the USPS

FedEx’s earnings announcement and conference provided some insights into the parcel market and the increasing integration of the Postal Services delivery network with the marketing and distribution capabilities of FedEx.   The comments relating to FedEx Smart Post seem to indicate that United Parcel Service and other carriers that compete in the market for delivering small parcels to households, whether by their own drivers or by the Postal Service may be losing market share to FedEx. Here are the relevant excerpts:  Parcel Volume Dave Bronczek – President and CEO of FedEx Express from the Q & A Well, Art, as Fred mentioned in his opening remarks, we expect a very solid [...] Read more »

Increased competition in International Parcels

In August, Eastern Connection announced an alliance with TNT Express.   This alliance gives international shippers in Eastern Connection’s service area from Maine to Virginia better access to TNT Express’s extensive international network.   The closeness of the link can be seen by clicking on the International shipping picture on Eastern Connection’s home page which links you directly to TNT’s website. Eastern Connection is a regional parcel carrier, that offers next day ground delivery service from Maine to Northern Virginia at rates that they state are 15 to 25% below that of UPS and FedEx.   Eastern Connection’s service area is ideal for companies with the need to distribute parcels from distribution centers [...] Read more »

50% off Express and Priority Mail

Office Depot has posted a 50% off coupon on its Facebook page that is good for shipping one item using the Postal Service.   The one day promotion is only good today, September 8, 2010.    It is designed to promote Office Depot’s new relationship with the Postal Service and the Express Mail and Priority Mail Services that Office Depot now sells. The promotion has attracted significant press attention in nearly every city that Office Depot has stores.   Because the sale is for one day and timed before the heavy parcel shipping season, it is unlikely to attract significant volume so the cost to Office Depot should be small. It is less [...] Read more »

Closing Post Offices or Cutting Hours.

The Spatanburg Courier-Journal reported that the Clifton, South Carolina post office is going to have reduced hours.   Currently, the Clifton post office is open Monday through Friday from 7:30 to 11 a.m. and from 1 to 4:45 p.m. and on Saturday from 8 to 11:45 a.m.  The new hours will be 9 a.m. to 1 p.m. and 2 to 4 p.m. Monday through Friday and 9 to 10 a.m. on Saturdays.   This is a reduction of 8 hours per week or more than 20% of total hours.  The reduction in hours creates greater difficulty for households or businesses that are within one-quarter mile from the post office as they have [...] Read more »

The OSHA Fines: A Canary in the Coal Mine

The financial problems of the Postal Service have so far had minimal impact on the service that mailers receive.   The Postal Service has generally met its service commitments at levels similar or better than what existed at the time of the passage of the Postal Accountability and Enhancement Act.  To the extent that the financial problems have affected operations, the impact has been hidden from view. However recent actions by OSHA indicate that the financial challenges are beginning to impact the ability of the Postal Service to safely operate its facilities.   OSHA has found sufficient common violations exist that it issued a complaint to the Occupational Safety and Health Review [...] Read more »