Mailer pros need to step up for the industry
During the past few weeks, both the Senate and the House have held so-called oversight hearings concerning the Postal Service.
The House hearing was to concentrate on "Infrastructure and Realignment," while the Senate's hearing was on "Service Standards and Performance Measurement Systems." Also, the Senate held a separate hearing titled "Views from the Postal Workforce on Implementing Postal Reform." Postal reform is often known as the Postal Accountability & Enhancement Act (PAEA).
Let's review the hearing at the House, regarding the implementation of postal reform. Much of the discussion revolved around the issue of the subcontracting of delivery routes. This issue appears to have been settled, at least temporarily, and essentially taken off the table by the recent contract agreement between the Postal Service and the letter carriers union. However, Bill Burrus, president of the American Postal Workers Union, apparently is quite the seer. He told the subcommittee that the subcontracting of delivery routes is just a step in the direction of converting the Postal Service, a vital public service, "à to one performed privately for profit."
Perhaps Burrus is aware of some magic elixir that postal management can drink to become profitable and draw the attention of hedge funds and the leveraged buyout crowd, let alone get the Democratically controlled Congress to permit privatization through new legislation. Meanwhile, it will be interesting to hear his thoughts, and those of others in the postal labor hierarchy, as to exactly how the Postal Service can live within PAEA's Consumer Price Index cap on rate increases.
Testifying before the House subcommittee about infrastructure and realignment, Bill Galligan, USPS SVP for operations, laid out some important facts regarding postal operations and workload. His testimony noted that the Postal Service operates a nationwide network of almost 37,000 processing, distribution, retail and delivery sites, some owned, some leased.
The USPS's delivery network is expanding and must accommodate almost 2 million new homes and businesses each year. On the other hand, mail volume is in decline, with the Postal Service projecting a total drop of 1 billion pieces in all mail classes this year. First Class mail, which had its peak of 107 billion in 2001, was at 98 billion last year. To meet the challenges, Galligan pointed out that the Postal Service, "à must have the ability to adjust our infrastructure to reduce excess capacity, duplicative processes and their associative costs."
Another factor in the need for infrastructure adjustment is the Services plan for new automated flat sequencing equipment. This equipment requires a lot of space - space that is unavailable in many of its existing facilities.
This hearing also featured testimony from a number of high-ranking members of Washington-based postal-oriented trade associations. To me, however, the most significant testimony came from Mike Winn, director of postal affairs and mailing operations for R.R. Donnelley and a member of Postcom's Board of Directors. Winn was able to provide testimony based on his experiences and responsibilities at Donnelley.
First, he said, "The objective of network alignment must be aimed at achieving the lowest combined cost of the Postal Service and the mailing community."
Winn was reinforcing the lowest-combined-cost statements made years ago by former Post Master General Bob Tisch, and echoed by subsequent PMGs. That is, the objective of USPS cost-reduction strategies must not be to move expenses off the Postal Service's ledger and transfer them to mailers, unless there is a net total reduction in USPS and mailer costs.
Winn also pointed to the need for the Postal Service to improve its communications to mailers regarding its network realignment plans. Winn, as a large mailer and logistics provider, was able to point out that changes to the Postal Service's mail processing network has a significant impact on mailer distribution plans, and their own plant realignments.
Winn, with his years of experience working for a large printer and logistics services provider, was able to clearly explain the issues of importance. This statement is not intended to criticize any of the mailing industry's Washington trade association executives. They do an outstanding job of trying to balance the often disparate needs of their members. But, they don't have the daily experiences, in the field, of dealing with the postal service that mailers have.
Too often the mailing community relies on its Washington representatives to testify, when they should be doing the job themselves. Yes, it takes time to prepare testimony, testimony that might need to be reviewed by an in-house counsel. Then it's travel to Washington. The entire exercise; testimony preparation, travel to and from Washington and then the hearing itself, might actually take a week. But it will be worth it to the mailing community for Congress to hear their statements. And, in particular their unrehearsed answers to questions.
Mailers: The next time the opportunity presents itself, step up.