National Postal Forum Highlights Few, but Vital, Options for Smaller Mailers
April 16, 2010
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The 235-year old U.S. Postal Service presented its future vision to the 4,000 mail aficionados gathered in Nashville’s Opryland for the annual National Postal Forum. This vision—entitled “Ensuring a Viable Postal Service for America; An Action Plan for the Future”—has been reported in the national press as well as the printing trade press in detail for the past two months. While highlights of this plan and its process will be discussed in this article, my opinion of the very limited but essential strategic options remaining for the small- to medium-sized printer, who are inextricably dependent upon the USPS, will be detailed.
Lets review the basics.
The USPS will lose money for the third year in a row forcing Congress to bail them out. The old Congressional dog barks and growls but it is toothless. The $5-8 billion range bail out is a pittance compared to the AIG and General Motors debacles. Plus the 44¢ stamp required to reach each household and business in our 50 states is perceived to be a world-class bargain by many. Warnings and reprisals will be issued, as in the past, but the relief motion will pass.
Despite USPS top management claiming to have excellent working relationships with the myriad Postal Unions, the facts reveal that the unions have come out of every single binding arbitration with increased benefits, higher compensation and more rigid work rules than ever before.
The Federal law stipulates, “Arbitrators may not consider USPS’ financial condition when making binding arbitration decisions.” Losses create an urgency to find cost savings. Most every single significant cost saving option considered by USPS management will reduce jobs and its onerous labor cost burden, which are unbelievably 80% of total expenses. Congress members do not want to be identified with a vote that will put more of their constituencies out of work. Hence, their willingness to change this arbitration clause is doubtful. The unions seem to have every reason to feel bullish.
As mail volume continues to collapse, the USPS must do everything it can to automate the processing of mail and remove as much labor content as possible. Hence, it has bet all its chips on the Intelligent Mail Barcode (IMb). Extremely sophisticated and complex software is required to be employed by every mailer to comply at the full IMb level. Since about 10% of mailers represent nearly 90% of the total mail volume, this single strategic initiative is a fairly sure bet by the USPS as these big boys easily have the required million dollars and full-time, dedicated IT staff to invest to bring all of their addressing and electronic communications up to the IMb level.
Lets review the basics.
The USPS will lose money for the third year in a row forcing Congress to bail them out. The old Congressional dog barks and growls but it is toothless. The $5-8 billion range bail out is a pittance compared to the AIG and General Motors debacles. Plus the 44¢ stamp required to reach each household and business in our 50 states is perceived to be a world-class bargain by many. Warnings and reprisals will be issued, as in the past, but the relief motion will pass.
Despite USPS top management claiming to have excellent working relationships with the myriad Postal Unions, the facts reveal that the unions have come out of every single binding arbitration with increased benefits, higher compensation and more rigid work rules than ever before.
The Federal law stipulates, “Arbitrators may not consider USPS’ financial condition when making binding arbitration decisions.” Losses create an urgency to find cost savings. Most every single significant cost saving option considered by USPS management will reduce jobs and its onerous labor cost burden, which are unbelievably 80% of total expenses. Congress members do not want to be identified with a vote that will put more of their constituencies out of work. Hence, their willingness to change this arbitration clause is doubtful. The unions seem to have every reason to feel bullish.
As mail volume continues to collapse, the USPS must do everything it can to automate the processing of mail and remove as much labor content as possible. Hence, it has bet all its chips on the Intelligent Mail Barcode (IMb). Extremely sophisticated and complex software is required to be employed by every mailer to comply at the full IMb level. Since about 10% of mailers represent nearly 90% of the total mail volume, this single strategic initiative is a fairly sure bet by the USPS as these big boys easily have the required million dollars and full-time, dedicated IT staff to invest to bring all of their addressing and electronic communications up to the IMb level.
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