U.S. Postal Service: Another Looming Crisis
Another highly visible figure in the direct mail printing space—IWCO Direct President and CEO Jim Andersen—takes a guarded approach to the issue of five-day mail. Like Schick and the Coalition, the chief executive of the Chanhassen, MN-based printer will be keeping his eyes peeled to the fine print of any such proposal.
"While the USPS has given assurances that it will maintain sufficient mail processing operations over weekends to avoid mail delays during the early part of the week, we continue to be skeptical about the USPS' ability to achieve that outcome," Andersen remarks.
"We look forward to the Postal Regulatory Commission's advisory opinion on this topic, which should provide more background on potential savings and impacts on postal operations."
Schick emphasizes that pension overfunding and the onerous retiree healthcare prepayment are the twin 800-lb. gorillas standing in the way of a self-sustaining, fiscally viable Postal Service. But right-sizing the USPS network through closures and consolidations is critical to its ability to control costs, he notes. For example, Schick points out that the USPS' current network was built to support the processing, distribution and delivery of 300 billion pieces, while current volume is barely more than half of that at 170 billion pieces.
USPS' Proactive Moves
For its part, the USPS has taken what it considers a proactive approach toward cleaning its house. More than 100,000 jobs have been reduced through attrition, early retirement packages, etc. And it is closing 2,000 facilities this year, which will result in a savings of roughly $500 million over the next two years.
Right-sizing, while not a cure-all, is a good place to start. "As we've heard from (Donahoe), he is focusing on the number of employees needed to efficiently manage and operate their network," Schick says. "Managing that process will continue to happen through attrition, a planned restructuring of field offices, a reduction in headquarters management and administrative staffing...and other offers for early retirement."