Mailing/Fulfillment - Postal Trends

The Postal Service Retiree Health Benefits Fund is bankrupting USPS. It is currently sitting at roughly $46 billion reserved for future retirees, or so we thought. The USPS puts roughly $5 billion into this fund every year, which it must do by law. Now Treasury just wants to step in and take it, which amounts to robbery.

I’m perplexed as to how the U.S. government can justify stealing money from both retirement accounts while the USPS, a private entity of the federal government, is on the verge of bankruptcy. The USPS is running out of options to remain a viable business.

The study carried out by Massachusetts-based consultancy InfoTrends and commissioned by the USPS Inspector General, polled 5,000 American Internet users aged 18 and above.

The results excluded the views of 20 percent of Americans who are not Internet-connected, potentially skewing results toward urban-based and higher income groups.

The InfoTrends survey still found healthy support for the Postal Service’s traditional role delivering the physical mail, and the concept of the universal service, although a sizable 77 percent of those surveyed incorrectly believe that USPS is funded by the taxpayer, rather than postal service income.

A new study released today by a non-partisan Washington think tank recommends a radical departure for the struggling United States Postal Service: a public-private partnership that would open up much of the service’s back-end logistics to outside competition.

But the study released today by The Information Technology & Innovation Foundation adds a bit more to the discussion.

The government on Wednesday said it had appointed Goldman Sachs and UBS to manage an initial public offering for the Royal Mail later this year, The New York Times reports.

The sale would be the biggest privatization in the country since the railroads in the 1990s, The New York Times reports. Michael Fallon, the minister for business, said the sale was a “practical, logical and commercial decision.”

“Unless Royal Mail has the capability in the future to access equity markets, every £1 that it borrows is another £1 on the national debt,” he

U.S. Postal officials have said recently that they plan to implement new postage rates for the Standard and Periodicals classes early next year that include “an FSS pricing structure.”

Details have not been released, but discussions indicate the plan will include significant incentives for mailers to create FSS-optimized bundles for ZIP codes served by the giant machines while continuing to make traditional carrier-route and 5-digit bundles for non-FSS areas.

The move would take aim at a major reason the $1 billion-plus FSS investment so far has increased USPS’s mail-handling costs more than it has reduced delivery expenses.

The U.S. Postal Service added to its losses in the second quarter and is closer to needing “extreme action” to keep it afloat, Postmaster General Patrick Donahoe said.

“At some point our financial liabilities become so large that they cannot be fixed without taking extreme action,” Donahoe said today at a board meeting in Washington. “We don’t want to get to the point where extreme action is the only option.”

In April, the USPS delayed its implementation of five-day delivery schedule until legislation is passed that provides the USPS with the authority to implement a financially appropriate and responsible delivery schedule.

According to Post Master General and CEO Patrick Donahoe, if legislation doesn’t pass, the postal service will have to do something to get revenue in the organization.

“We have not given up on mail at all, we know there is growth and we have not given up on packages,” said Donahoe.

As Dead Tree Edition reported last month, USPS proposed to offer large mailers a one-time “Technology Credit” and then to have those credits considered a price decrease for purposes of calculating its inflation-based rate cap. That would result in permanent price increases that would eventually cost mailers far more than the maximum $5,000 credit per mailer.

USPS clarified—or changed—its position this week in response to questions from PRC Chairman Ruth Goldway.

The government agency that’s supposed to support itself through postage sales lost about $3 billion in the first half of its fiscal year, from Oct. 1 through March 31, Postmaster General Patrick Donahoe said in an interview airing this weekend on Bloomberg Television’s “Conversations With Judy Woodruff.” That decline is projected to double by the year’s end, which is Sept. 30, he said.

The Postal Service continued its money-losing streak by reporting a first-quarter loss of $1.3 billion. The service is scheduled to release second-quarter results May 10, when its board meets in Washington.

The recent U.S. Postal Service financial report for the first three months of fiscal 2013, said that in operational terms the Postal Service had a $100M profit delivering the mail—six days a week. It earned revenues of $17.7B selling stamps and services and had expenses of $17.6B. But the quarter's $1.4B pre-funding cost led to a reported "loss" of $1.3B.

There is much support for rectifying this situation, including from the postmaster general, the postal unions, many industry observers and, most importantly, from hundreds of members of Congress from both parties.

The Washington Examiner has entered this discussion.