CEOs Take Up the Postal Challenge

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The U.S. Postal Service held its semiannual National Postal Forum in Boston recently. With the weak economy and weak state of the mailing industry, attendance at the forum seemed to be down a bit.

Perhaps its time for the Postal Forum Board to consider whether it still makes sense to hold two forums every year. Perhaps it's also time for the forum's board to consider reserving a board seat for someone representing the mailing industry. Today, retired USPS officers hold four of the six seats, with another held by a former member of the Board of Governors.

But now, off my soapbox and back to the contents of the meeting. From my perspective, there were two key announcements:

1. Postmaster general John E. Potter indicated that the latest USPS forecast for FY 2002 was a loss of less than $1 billion, compared with a prior estimate of a $1.2 billion loss. But more importantly to the mailing community, Potter said there would be "no general increase until well into 2004."

2. The establishment of a Mailing Industry CEO Council, with a mission to "unify the mailing industry and to represent and promote the critical role of mail in U.S. business and commerce."

Regarding Potter's announcement, the mailing industry certainly hopes he delays the next rate increase as long as possible and keeps it under the cumulative rate of inflation. As such, it was interesting to read an article in the Oct. 21 Business Week titled, "Prices Just Keep Plunging." It notes that "huge swaths of the economy are facing ever-weakening pricing power."

According to the CFO of Costco, "deflation is across the board." Though it might seem an impossible task, the postal service must, at worst, keep its price increases under the level of inflation.

Now to the CEO Council. Its genesis began with the Mailing Industry Task Force, co-chaired by deputy postmaster general John Nolan and Pitney Bowes chairman/CEO Mike Critelli. The task force's mission was to assess the state of mail as a communications channel and determine how it could be enhanced to ensure its viability. The task force devised about a dozen recommendations, including improving address quality, promoting the development of intelligent mail, standardizing mail preparation requirements and the implementation of an industry council. The CEO Council is the industry council the task force recommended.

Kudos are owed to Critelli for assembling a strong, distinguished group of 14. The council, to be chaired by Critelli, includes CEOs or presidents from R.R. Donnelley, Reader's Digest, Lands' End, Harte-Hanks, Capital One, Advo, Acxiom, Wunderman New York, Fingerhut and Symbol Technologies.

According to its mission statement, the council "will focus on establishment and maintenance of public policies, as well as mailing industry standards, which enable the growth of the industry to go forward."

Consistent with its activities, which will include lobbying Congress, the council's membership does not include USPS representation. Without USPS representation, the council will need to assume several functions and positions that the postal service cannot.

Presumably the CEO Council will not merely mouth USPS positions, but will take positions consistent with its background as executives in highly competitive industries. For example:

o What position will the council take regarding the postal service's Transformation Plan?

o Will the council agree with the USPS recommendation that it remain a government-owned entity? Or will it opt for a recommendation that its goal be privatization?

o Will the council recommend its own set of postal reform guidelines?

o Will it lobby Congress to take a hands-off approach on the need to close underused or redundant postal facilities?

o Will the council take a position on any changes to the definition of universal service?

o Will the council actively lobby the White House to continue to appoint qualified individuals to the Board of Governors and Postal Rate Commission?

These are just a few of the issues the CEO Council may want to be involved with. But the establishment of this group, under Critelli's leadership, may hold the key to the future of the USPS. Let's all wish them good luck.

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