*Henderson: USPS Faces Sobering Trends

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ANAHEIM, CA-William J. Henderson, the U.S. Postal Service's Postmaster


General told attendees to the Fall 2000 National Postal Forum here


this week that while the USPS in some cases the USPS is facing


the best of times right now, there are also many sobering trends it must


face.


"For the mailing industry and the postal service, these are absolutely the


best of times," Henderson said during the opening general session. "The


best of times because the past five years have been an unprecedented


period of progress and prosperity."


But, if the agency becomes complacent "these could become the worst of


times," he said.


For example, he said that the USPS and the mailing industry "stand


together at the foot of a towering mountain representing three sobering


trends."


One sobering trend is consolidation within the mailing industry that is


changing the structure of mail.


"First-Class mail is no longer growing at historical rates, as the mailing


industry seeks to combine bills and advertisements and other pieces into


future mailings."


He cited a report by the American Bankers Association, that said that


banks have reduced mailings by 18 percent since 1996, exclusive of their


sue of electronic banking.


Henderson said that the second sobering trend is electronic billing and


payment systems that are creating another channel into the household


competing with mail, and the third is "good old-fashion competition….


Everything from domestic competitors to foreign posts is remaking


themselves-virtually without constraints-to defend their core businesses


and to mine new business from the opportunities of e-commerce," he said.


As a result, Henderson said the USPS faces three critical challenges that


it must confront in order to stay afloat. Those challenges are:


• Keeping its products affordable;


• Growing with the industry the USPS serves; and


• Removing the regulatory boundaries that prevent the USPS from being the contemporary, efficient, effective brand people want to do business with.


Henderson said that while the agency is doing everything it can to bring


its internal cost structure down, and is working with the mailing industry


on every front to keep the value of its products high and keep them


relevant, he is concerned about regulatory issues. Currently, H.R 22, the Postal Reorganization Act, is stalled in Congress and will probably die by


the end of this session.


"Five years of debate about postal reform in Congress has failed to give


us the flexibility we need to prove our products in line with competitive


market behavior, to invest income freely, or to bring the voice of the


customer into the labor mix, Henderson said. "I say again hat we are a


wholly owned government business and it is time to get down to business on


reform, We needed it five years ago. We need it today."
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