Funding of Early Retirement Incentives

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In yesterday’s post, I stated that “The Postal Service has been coy about whether it will offer retirement incentives partially because if Congress passes a bill that includes the incentives included in the S.1789, the Postal Service can offer larger incentives than it can under current law and the Postal Service needs the refund of FERS over-payments to cover early retirement incentives.”  This statement raised some questions from readers that are worth responding to in a full post.  See: Impact of USPS Consolidations on Employees Tom wrote: Alan, how do you reconcile this post with what you said a month ago, ( that we all had better prepare for a [...] Read more »

Nearly one-third of APWU Mail Processing Jobs Cut in Eastern Area


Looking at the APWU job cuts as a proportion of total APWU jobs by craft shows the extent of the impact on individual employees and provides some idea as to the impact on mail handlers, supervisors, managers and administrative personnel. and The projected job cuts that the Postal Service provided the American Postal Workers Union (APWU) shows that three Areas will see mail processing jobs cut by more than 20% with the Eastern Area seeing job cuts of nearly one-third.   Information on maintenance crafts suggests that the consolidation is expected to reduce maintenance employees  by nearly 20% by over 80% in two areas with over 56% of  nationwide. The following table [...] Read more »

Impact of USPS Consolidations on Employees

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Last week, the Postal Service provided employees significantly more information regarding the scale of the changes coming to its operations and for many employees whether the facility they now work at will remain open. While this information has provided employees with some indication as to what lies ahead, the details as to what will happen to individual employees remain sketchy. The following set of questions and answers provide information contained in the Postal Service’s “Our Future Network” website, presentations to Postal Unions, bulletins of Postal management associations and press reports from both national and local news sources. When Will the Postal Service Start to Make Changes? Based on information provided [...] Read more »

Comments of Representative Dennis Ross on USPS Consolidation


The following is a  dialogue that I had with Congressman Dennis Ross via Twitter regarding the Postal Service’s plant consolidation announcements: CEP Observer: Do you have a statement on the change in USPS service standards and closing of plants? Congressman Dennis Ross: not really. USPS needs to right size and list appears to be non political. Closed facility in my home town. CEP Observer: I would guess there would not be much blowback in Congress. Do you still need a BRAC fro processing plants -seems redundant. Congressman Dennis Ross: for facilities in general, probably. For processing, maybe not. May have taken care of it. Want to hear from PMG on [...] Read more »

Impact of the USPS Consolidation on the Mailing Industry


Now that consolidation of the Postal Service’s operation network is public, mailers can now shift their attention from the impact of consolidation on service standards and a generic understanding of the USPS operation plan to how they change how print and prepare, and receive their mail to take advantage of the Postal Service’s new network.   Based on presentations made at various public meetings concerning individual plants and public presentations made by the Postal Service, these are the questions that mailers need to think about as they make decisions about how they print and prepare their mail after consolidation goes into effect. Does printing and preparing mail in house still make sense?  If [...] Read more »

The Politics of Network Optimization

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Starting yesterday, information about closures of Postal Service facilities have leaked out one by one.  The Postal Service this morning published the full list of facilities that will be impacted.   The Postal Service states that “264 processing facilities were studied, 6 are on hold for further internal study, 35 will remain open for now and 223 will be consolidated  — all or in part. Looking at the list of facilities that will not be consolidated fully, it is clear that with very few exceptions the evaluation process  and all of the public hearings did not change the likelihood that a facility would be consolidated.  It would appear that the effort that local, sate [...] Read more »

The Postal Service Business Plan: the Result of Choosing a Government Business Model


The Postal Service today presented a 5-year business plan that it calls a Plan for Profitability. The plan represents the impact of the investment bank Evercore partners and clearly indicates that Evercore was required to develop a plan that maintained the financial and market restrictions of a quasi-governmental Postal Service. Therefore the plan differs significantly from successful plans for profitability of most foreign postal administrations. The two key differences are 1) the plan does not include an infusion of capital, mostly coming from private sector; and 2) the plan does not include the commercial freedom to fully exploit the value of the Postal Service brand or its human, physical or [...] Read more »

Fitch Lowers Pitney Bowes Rating: Raising Questions About Use of Mail by Small and Medium Enterprises

Yesterday, Fitch lowered Pitney Bowes credit rating from  BBB from BBB+.  Pitney Bowes lower rating is not investment grade which indicates that Fitch believes that investments are risky.   Fitch does not appear concerned that Piney Bowes will default on its debt, which is qite modest but the downgrade suggests suggests that Fitch does not believe that Pitney Bowes, even with an 8.1% yield is not an investment for risk adverse investors. Key Points from the press release: Fitch’s primary concern is the downward trajectory of the top line. Importantly, Fitch believes cyclical pressures accelerate the well-documented secular challenges, as Fitch believes customers will look to digital mailing as a cost [...] Read more »

USPS 1st Quarter Volumes and Revenues Better than Forecast

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With its filing of its 1st Quarter 2012 10-Q, the Postal Service reported another quarter of substantial losses.   While the report clearly indicated that the Postal Service’s financial position is unsustainable, the decline in volume and revenue is substantially less than projected in the Postal Service’s 2012 Integrated Financial Plan.  In the First quarter of fiscal year of 2012, the Postal Service has handled nearly 2 billion more pieces and generated $745 million more revenue than the forecast that the the Postal Service filed on January 20, 2012 with the Postal Regulatory Commission that the Postal Service more than likely used in its 2012 Integrated Financial Plan. Comparison of 1st Quarter 2012 Volume [...] Read more »

Portugal Preparing Sale of Post Office

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As part of its bailout plan, Portugal has prepared a second round of sales of government owned corporations.  According to Jorge Cardoso, CEO of Caixa Banco de Investimento, who has advised the government in the sale, indicated that the Portugese Postal Service, CTT — Correios de Portugal, is one of the major government corporations that the Portuguese government expects to sell in 2012. While Portugal is a small country, its postal service offers a broader range of services than the United States Postal Service.  In addition to traditional letter and parcel delivery services, Correios de Portugal offers: For Consumers: Financial Services, including money orders, savings accounts, money transfers, insurance, toll [...] Read more »