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Quadracci: Put USPS on Path to Sustainability

February 22, 2013

"The competition is real and it is out there," Quadracci told the committee.

Among the core elements of postal reform Quadracci would like Congress to implement are:

• Ensuring the USPS has the authority to streamline its operations. The USPS has infrastructure and capacity to handle and process 300 billion pieces of mail annually. According to USPS estimates, mail volume will only be 153 billion pieces in 2013. It’s important that the USPS be able to right-size its operations, Quadracci said.

• Lengthening the amount of time the USPS has to pre-fund healthcare benefits for retirees. The current 10-year amortization schedule has resulted in unaffordable $5.5 billion annual payments on which the USPS has already defaulted twice. Extending payments over a longer period of time would relieve some short-term financial pressure while still enabling the USPS to meet its retiree benefit obligations long-term.

• Providing the USPS the flexibility to manage escalating healthcare costs without disadvantaging employees or retirees. Quadracci shared that it is possible to improve the quality of healthcare while reducing costs. "Too much of healthcare talk has been about who pays for what as opposed to how do you pull the costs out. There are ways to pull out costs," Quadracci said, citing Quad/Graphics' own success with focusing on preventive care through its 23-year-old QuadMed subsidiary.

• Addressing volume declines by maintaining the postage rate caps and pricing flexibility the USPS needs to develop new products and services and, ultimately, attract more business. Quadracci noted that the USPS' use of pricing incentives to promote QR-coded mail works. He cited the example of a client who used a QR code on a mailer to link shoppers to a product demonstration video. The client saw an approximate 20 percent increase in sales of the featured product.

Acknowledging that postal reform is a complex issue, Quadracci nonetheless urged the committee to move forward as fast as possible to solidify the USPS' future. The long-term success of the USPS is critically important for the United States, he said.


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