Moody’s Projects the Future of Transaction and Advertising Mail

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In assigning a rating on new debt issued by Harland Clarke to cover the purchase of Valassis, Moody’s made an assessment of a business that is primarily dependent on check printing and mail advertising.   Its comments suggests that Wall Street sees both the transaction and advertising mail businesses as profitable but in a secular decline.  More importantly for holders of bonds due in 2021, Moody’s expects the secular decline in both checks and mail advertising to accelerate towards the end of the decade. Harland Clarke’s B2 Corporate Family Rating reflects Moody’s ongoing concern that the combined business model is subject to secular decline in both its check printing and Valassis’ [...] Read more »

Congress Acts on Meaningful Postal Legislation (Just Kidding)

Eatonville-Featured

This week the House of Representatives passed six bills renaming Post Offices.   These ceremonial bills were all passed under suspension of the rules.  Maybe its time for a member of Congress to object to suspension of the rules on each bill that renames of Post Office until the House of Representatives acts on postal reform.  It may not move legislation forward faster, but it would raise public awareness as to the failure of the House of Representatives to act. H.R. 5788 - To designate the facility of the United States Postal Service located at 103 Center Street West in Eatonville, Washington, as the “National Park Ranger Margaret Anderson Post Office” (Sponsored [...] Read more »

How Congress Plans to Pass USPS Reform in the Lame Duck

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The Hill has reported that leaders of the Senate Homeland Security Committee and the House Government Oversight Committee are currently working on a compromise Postal reform bill that could pass in the lame duck session.  Given the limited time available in the lame duck session, Congress does not have the time to have the House of Representatives pass some version of H.R. 2309 and then negotiate the differences with S. 1789 in a Conference Committee.  Therefore the leadership of the House Oversight and Government Reform and the Senate Homeland Security and Government Affairs Committee are working to short cut the normal legislative process. If the negotiations are successful the next steps in [...] Read more »

If the USPS Is In Trouble, Why Did Mailing Industry Stocks Rise Sharply?

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Today the Postal Service reported its financial results for fiscal year 2012.    Headlines of the wire services and major newspapers all suggested that a calamity is just around the corner. Bloomberg - U.S. Postal Service on a ‘Tightrope’ Lost $15.9 Billion   Washington Post - Postal losses cap year of payment defaults, little help from Congress; more red ink in 2013   Reuters – U.S. Postal Service has record loss, sees “fiscal cliff”   Wall Street Journal - U.S. Postal Service Reports Record Loss   Associated Press - Post office reports record loss of $15.9B for year   Pittsburgh Business Times – Postal Service: ‘Far short on liquidity’   How Did Postal Industry [...] Read more »

United Parcel Service Earnings Report Has Good News for the USPS

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United Parcel Service reported earnings press release today provides hints of a changing parcel delivery marketplace that favors the parcel delivery services that the Postal Service does best. Volume grew across all products as ground rose 3%, UPS Next Day Air® increased 5% and deferred air climbed 8.6%. The majority of the improvement was driven by large e-commerce customers shipping low-weight residential packages. The shift to residential deliveries has resulted in UPS’s revenue per piece rising far less than its change in rates from a yar ago.  UPS states that the change is due to a customer and product mix.  The change in customer mix describes the growing proportion of UPS”s [...] Read more »

Senator Carper Ups the Ante on USPS Reform

Senator  Tom Carper

Senator Tom Carper (D-De) has upped the ante in the battle between the Senate and the House on postal reform legislation when he launched a new page on his website that includes a clock that counts down to the date that the Postal Service’s current moratorium on facility closures ends. The web page,  http://www.carper.senate.gov/May15 also calls on the U.S. House of Representatives to pass legislation aimed at reforming the U.S. Postal Service before a critical deadline of May 15, 2012, the date that the Postal Service has stated that is facility closing moratorium ends. In a statement announcing the new web-page Senator Carper stated: My friends in the House must move [...] Read more »

Could Royal Mail’s Approach to Postal Retail Services Work in the United States?

Post Office UK

One of the major issues related to the United States Postal Service is the future of its retail infrastructure. The issue of the future of retail is important everywhere. In Great Britain, where 97% of all Post Offices are contract operations, the issue of the future of retail postal access has been a major issue because Royal Mail had reduced the number of retail locations by 25% over the past decade. Royal Mail Ltd, runs its retail operations as a separate, for profit entity called Post Office, Ltd. This subsidiary currently has a ten year exclusive contract to sell Royal Mail Services through a franchise network of retail counters as [...] Read more »

United Parcel Service Delivery Failures Raise Questions About its Readiness for e-commerce.

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In December this holiday season, United Parcel Service just wrote the advertising campaigns for both FedEx and the United States Postal Service. Both competitors can go to potential e-commerce shippers with a very simple slogan: “We deliver when you need us most.” United Parcel Service’s problems were bad enough to cause the Denver Post editorial board to comment. While Federal Express and the U.S. Postal Service were able to get their packages delivered before Christmas without significant incident or complaint, the same can’t be said for UPS. On Saturday afternoon, hundreds of people stood in line at the UPS customer service center in Commerce City hoping to retrieve gifts, medication [...] Read more »

UPS Rate Increase Could Help Priority Mail

United Parcel Service  announced a 4.9% net increase (i.e. rate  increase minus decrease in fuel surcharge) in rates today.  Logistics Management reports on some of the details that suggests that UPS rate changes could provide the Postal Service could increase its competitive advantage in delivering small light-weight parcels or give it more room to raise rates on parcels weighing less than five pounds.  These details include: UPS is raising minimum charges by 6.2%.  The minimum charge is what shippers pay even when their contracts have significant discounts.   UPS minimum charges affect shipments that weigh less than 2 pounds, a market that the Postal Service has the largest market share. UPS’s highest increase is for [...] Read more »

Deutsche Post New Labor Agreement – Could It Provide a Model for the USPS

Logo Deutsche Post

In its Presentation to Analysts, one of the slides detailed the new labor agreement that Deutsche Post states will help keep its mail business profitable.  The portions of the agreement cited are as follows: New flexible model for age-based working solutions Option to pay proportion of current salary into worktime account Partial-retirement program supplemented by working-time accounts and a demographic fund Extension of no compulsory redundancy until 2015 Continued outsourcing 990 parcel-delivery districts handled by sub-contractors Outsourcing of transportation extended by 1,000 drivers Agreed salary/working condition changes 4% lower entry wage for new Mail employees New vacation policies based on company service, not age Renewal of non-chargeable overtime, work days [...] Read more »