Fastenal Corporation Suspects that USPS Operating Changes Hurt Its Finances

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Last week, Fastenal became the first public corporation to report that changes in service standards for single-piece First Class mail have had a negative impact on its finances.   In reviewing the 2nd quarter’s results, Fastenal’s CFO Daniel Florness explained that the most significant reason for the increase in the corporation’s accounts receivable was changes in how Fastenal receives payment from its mostly small business customers. Now both June of 2012 and June of 2013 ended on a weekend. So the calendar is similar, so my comment about the calendar might sound a little odd. But what we’re — and I don’t know if this is a post office, logistics thing or [...] Read more »

Senator Carper Working to Put Postal Reform on President Obama’s Desk As Early As The July 4th Recess

Senator Carper

At Postal Vision 2020, Senator Tom Carper indicated that he hopes to have a Postal reform bill on the President’s desk by the July 4th recess and if not then by the August recess.   He expects to work toward passage of a postal reform bill within this time frame in the Senate through regular orders.  This means he will hold a hearing and accept comments on a public draft of a Senate Homeland Security and Governmental Affairs committee drafted bill within the next month.    Then after a short period of reviewing this testimony and comments submitted, the Committee will hold a business meeting to mark-up the bill.   Given [...] Read more »

Gene Del Polito: The Prospect for Any USPS Reform Legislation This Year

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The first part of the interview with Gene Del Polito concluding that no legislation proposed “would set right all that is wrong with the Postal Service’s current fiscal situation, ensure the Postal Service’s ability to operate on a self-funded (no taxpayer money) basis, and ensure the Postal Service’s ability to satisfy the nation’s continuing (albeit evolving) postal needs for the reasonably foreseeable future.” “Gene DelPolito on the Status of Postal Reform Bills“   This statement clearly needs further explanation as does what options are there if his conclusion that no legislation currently on track for consideration on the floor of the House of Representatives or Senate have a reasonable chance of passage.  This [...] Read more »

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

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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 »

Why Mail Matters: Santorum’s Rise Came Too Late for Direct Mail Attacks

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Former Pennsylvania Senator Rick Santorum experienced a unique bit of luck in his last minute rise in the polls. It came too late for opponents to direct a direct mail campaign against him like the one that devastated former Speaker Newt Gingrich and to a lesser extent Congressman Ron Paul. The possibility that Rick Santorum’s poll numbers would rise in Iowa was talked about nearly as a joke for weeks after nearly every other Republican presidential hopeful had his or her place on top of the leaderboard. Even as late as the Wednesday before tomorrow’s Iowa’s Caucus no one had any hard evidence that a Santorum surge was coming. Public [...] Read more »

Capital Constraints Should Worry USPS Employees, Unions, and Management Associations

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Most of the news about the Postal Service focuses on service changes that it wants to make to reduce its workforce. These include initiatives to: downsize the retail and mail processing networks, eliminate Saturday delivery, cut First Class Service standards, and intensify route optimization of city carriers. The impact of these changes on employees is clear and most employees understand that if these actions are implemented, the reduction in the workforce will happen relatively quickly. Even with all of the proposed changes, the majority of people currently working at the Postal Service today will still be working there in 2015. Most probably plan to continue to work well past then, [...] Read more »

Representative Ross Indicates that Issa/Ross Bill will have no Change in Retiree Payments

In a tweet, Representative Dennis Ross hinted that the bill that Representative Darrell Issa and he will introduce tomorrow will not contain any change to the payment schedules for retiree obligations that are now contained in all other postal reform bills. RepDennisRossDennis Ross #USPS, this is why you prefund retiree benefits. http://t.co/wm1cnvI | “no one else does…” and this is where they are now. If there are no changes in the payment schedules to reflect overpayment of either FERS or retiree healthcare benefits then the Issa/Ross bill will need to find quick reductions in Postal Service costs elsewhere.   There are few options but all will likely affect both compensation to [...] 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 »

Smart Post – What Does its Success Suggest for Letter and Flat Mailers

In my previous post, I noted that FedEx volumes for Smart Post exceeded the Postal Service’s measured volumes for Parcel Select.   This implied that FedEx Ground, UPS and other parcel consolidators used other postal products, most likely Standard Mail Parcels, to handle the parcels that they want delivered less than 1 pound.  The attention that Smart Post received from analysts raised some additional questions that suggest that there may be Postal Service revival strategies that are not the focus of the current discussions about future business models for the Postal Service. So lets start with what we know about Smart Post and how the Postal Service handles it. What We [...] Read more »

What is the Context for 5-day Delivery?

One of the problems with the current regulatory and business model is that every action that is proposed to make the Postal Service financially viable is evaluated independently.   This allows those that object to one solution or another to oppose the solution under review and argue that something else should be done to restore the Postal Service’s viability. Right now the solution in the public eye is 5-day delivery.   The Postal Regulatory Commission has begun its review and Congress will soon follow with its own.  Each review appears to be completed independently of any other changes in the business model or regulatory framework that would be necessary to create [...] Read more »