Potter Eyes 2006 Cautiously

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Postmaster General John E. Potter said 2005 was a good year for the mailing industry and for the U.S. Postal Service but that 2006 will be filled with challenges, opportunities and uncertainties. Yet Potter is optimistic about the future of affordable, universal service for the nation, he said at yesterday's USPS Board of Governors meeting.

"We have made significant strides in the past five years, and we will build on them," he said. "The overriding challenge is to avoid the tendency to sit back, pause and feel good about the recent years' growth and performance."

Potter said he was especially proud of the work of postal employees during the recent holiday season.

"We moved more than 16 million pounds of holiday mail to our armed forces in Iraq and Afghanistan," he said. "Those packages from home were a great morale booster."

Board members also heard from chief operating officer Patrick Donahoe, who said the USPS canceled 282 million single-piece letters and cards Dec. 19, 5 percent higher than any other day in history. However, the number of cancellations for the overall holiday season was flat versus last year. In addition, the agency delivered 20 billion pieces this holiday season, and 5 million pieces of postage were purchased with pictures or images using PC Postage technology.

Use of the USPS Click-n-Ship service increased 67 percent over the previous holiday period, chief marketing officer Anita Bizzotto said, and requests for carrier pickup doubled and volume increased 142 percent.

But the postal service's busiest first quarter raised a cautionary note, Potter said: "Preliminary revenue and volume numbers in December were sluggish -- even while total cancellations of mail on the busiest day Dec. 19 achieved a new record."

The USPS faces the dual challenge of developing new business and increasing revenue while maintaining efforts to continue productivity growth. The agency must stick to the updated Strategic Transformation Plan, Potter said. He outlined some major technological components of that plan aimed to improve efficiency and service and cut costs:

· Throughout 2006, the USPS will deploy an automated package processing system that sorts bundles of mail and Priority Mail packages. This system, which uses optical character readers, is faster than older, less efficient, small parcel and bundle sorters.

· Starting in April, the USPS will install and test a prototype flats sorting sequencer machine at the Indianapolis Mail Processing Annex that is designed to sort non-letter or flat-size mail into delivery route sequence.

Potter also cited several unknowns that could affect planning for 2006, such as legislative action on postal reform, consumer behavior and higher energy costs.

At the meeting, the board re-elected James C. Miller III as chairman and Alan C. Kessler as vice chairman. Governors also welcomed new board member John S. Gardner, a recess appointment Jan. 6 by President Bush.

Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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