USPS

Postal Leaders Beat the Drum for Reform

by: Al Urbanski, Senior Writer – Direct Marketing News

The United States Postal Service (USPS) recorded a loss of $740 million in this year’s third quarter versus a loss of $5.2 billion this time last year, but top agency officials told a news conference today that it is still in need of substantial legislative reform to survive.

Though losses for the first nine months amounted to $3.9 billion, CFO Joe Corbett indicated that an earlier forecast of a $6 billion loss for the year was still a possibility. “Without comprehensive reform legislation, we will continue to experience large losses,” Corbett said. “We are operating with low levels of cash, and that will worsen in the fourth quarter when we will make a $1.4 billion payment for workmen’s compensation. At that point we will have only five days of cash on hand.”

“Five days of cash in October,” added Postmaster General Patrick Donahoe, “is as much of a crisis as we’ve been in.”

Donahoe hailed growth in package and standard mail revenues during the quarter, but continued to bang the drum for reform. “I’m pleased with the progress we’ve seen, but we’ve got to get the legislation finished,” he said.

On one score, at least, Donahoe’s idea of reform does not jibe with that of direct mailers. Senators Tom Carper (D-DE) and Tom Coburn (R-OK), included a provision in their new bill that would remove the Consumer Price Index rate cap and give control over rates back to the USPS. This raises the specter of an exigent rate increase that could severely hamper the activities of business mailers.

Donahoe says the USPS needs rate-setting power in order to react to marketplace conditions. “We’ve been on the record saying that setting prices and the timing of those prices should be done by the [postal] board of governors,” Donahoe said. “We think that it would be very effective to act as an after-the-fact review, like a public utility. Speed is the name of the game in this business world and that’s what we need.”

Corbett noted improved operating numbers for the quarter owed much to an improvement in interest rates that reduced expenses by $918 million compared to last year. He also pointed out that a $7.8 billion decrease in losses for the nine months ending June 30 could be explained by USPS making only one $5.6 billion healthcare fund prepayment this year versus two in 2012.

Still, both Corbett and Donahoe expressed optimism that new revenue streams and cost-cutting measures were moving forward in the face of a steady decline in First-Class Mail. Revenue from the USPS’ largest and most profitable mail segment declined by 1% on a 3.4% volume dip, but shipping and package revenue increased 8.8% on a 7.1% volume increase and standard mail receipts were up 3%.

Cost reductions in the quarter came from the consolidation of 104 processing facilities reduced operating hours at 7,397 post offices, and more than 1,000 postal routes consolidated or reduced.

“We expect some stability, contingent on a healthy economy,” Corbett said. “Assuming GDP will grow, the investment in capital goods will grow and employment levels will improve. The package business is tied to that and e-commerce. But the decline in First-Class will continue and that’s three times greater than any other decrease.”

As for reform, Donahoe and Corbett may still be waiting for legislative salvation as the year comes to a close. Senate and House members are expected to hammer out differences in their proposals before either bill is brought to a vote. With healthcare bills expected to dominate fall sessions of Congress, postal issues are likely to be back-burnered until 2014.

Share

Tags: , , ,

Save 2% on postage March thru April with QR codes

What’s Your Print-to-Mobile Strategy?
In today’s world of print marketing, multi-channel communications are a critical component of success. Taking your marketing message across multiple channels helps you cut through the marketing clutter in your customers’ lives and reinforce your message over time. If you aren’t already, it’s time to pay attention to mobile.

That’s why the post office is offering a 2% discount on direct mail pieces that use a QR code that drives readers to a click to call mobile page or a mobile coupon. The sales runs March 1 thru April 30.

Let’s look at some recent data that shows just how important mobile has become in the lives of even print-loving consumers.
• Smartphones are in the hands of 53% of U.S. mobile phone owners. (Pew Internet & American Life Project November 2012)
• One-third of adults are now mobile-only. They have no landline in their homes at all. (National Health CDC/NCHS National Health Survey 2011)
• Nearly two-thirds (61%) of consumers access the Internet via smartphone. (Accenture 2012)
• 51.1% of mobile users check their email using only a mobile device, 45.3% say they conduct mobile-only Internet searches, and 42.3% connect with friends on Facebook without ever using a PC or laptop. (Prosper Mobile Insights 2012)
• Four out of five smartphone owners use their phones to shop. (comScore MobiLens 2012)

If you are not integrating mobile into your overall print marketing strategy, it’s time to start!

Today’s consumers live on their mobile phones. It’s important to add mobile calls to action to your printed pieces, and QR Codes are the easiest way to do that. For more details on the upcoming postal sales, visit https://ribbs.usps.gov/index.cfm?page=mobilebarcode.

Share

Tags: , , , , , , , , , , , , ,

Friday, January 4th, 2013 Going Postal: News You Need No Comments

Subscribe

 Subscribe in a reader

Enter your email address:

Delivered by FeedBurner

 

Recent Comments