USPS Board Of Governors Approves Confirm Pricing

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The U.S. Postal Service Board of Governors approved market-based pricing for the Confirm tracking service at its monthly meeting in Washington yesterday.


Confirm's technology provides customers with information about where their letters or flats are as they travel through the mail stream, and provides the postal service with important operations data. Customers can access the data electronically through the Internet or have it downloaded directly to their computers.


Beginning Sept. 22, a three-tiered flexible pricing structure for flat- and letter-mail tracking will enable senders or recipients to follow mail as it passes through the automated mail stream. The options are:


* Silver. The subscription price is $2,000 for three months. It would include one marker within the barcode that isolates data for that particular mailer and 15 million scans, which occur each time one of the mail pieces passes through the automated sorting equipment.


* Gold. This price is $4,500 for one year, with one marker and 50 million scans.


* Platinum. The subscription is $10,000 for one year and includes an unlimited number of scans and three ID codes.


Each subscription could be enhanced for additional costs ranging from $500 to $750.


The board also announced its continued support for postal reform efforts such as postal reform legislation and a presidential commission on postal reform, even though Congress will not pass a reform bill this year.


"The governors support all efforts for appropriate reform, including a commission of distinguished citizens to review all aspects of the postal system and recommend changes that ensure affordable, universal service is maintained into the future," said chairman Robert F. Rider. "We also continue to encourage members of Congress to adopt appropriate legislative change, which need not await the recommendations of such a commission."


Rider said the governors wrote to the president and congressional leaders in March to express that the foundation on which the USPS operates is outdated and needs reform. In June, the governors commended leaders of the House of Representatives Committee on Government Reform and Oversight for their efforts to fashion a legislative proposal modernizing the postal system.


In other news from the meeting, the board announced the signing of a strategic alliance with AuthentiDate Inc., New York, a subsidiary of AuthentiDate Holding Corp., to be the provider of the USPS's Electronic Postmark service.


AuthentiDate will provide the management, technology and support for the postal service's EPM service. EPM offers a high level of integrity for electronic communications and transactions, similar to postmarking physical mail, in that it validates the existence of a document at a specific date and time.


The USPS and AuthentiDate are targeting EPM at the financial services industry, the government and the healthcare industry. No prices were available, but AuthentiDate said that it would be transaction-based, with discounts as volume increases. The service will be available in mid-October in Washington.


USPS chief financial officer Richard Strasser presented a cost-and-revenue report for FY 2001 history showing that letter-mail volume alone has not provided sufficient revenue to fund postal operations.


"We have relied on revenues from all mail product categories and services to pay for the cost of the expanding postal system," said Strasser.


Strasser said that since postal reorganization in 1971, the USPS "has generated just over a trillion dollars in revenue, and expenses during that period have been within six-tenths of one percent of revenue. This is a result of efficient operational management and prudent financial planning. Without the contributions of Priority Mail, Express Mail, Special Services and the other classes, we could not have met our break-even mandate on letter mail revenue alone."


In his presentation, Strasser also compared the weighted average price of letter-mail rates in Western Europe, stating that Europeans paid 49 cents for letter-mail service.


Insiders said that Strasser presented this information because some USPS competitors, such as United Parcel Service, argue that the agency's sole function should be to provide letter mail. Strasser wanted to show that providing letter mail alone would not bring sufficient revenue to fund the costs of universal delivery.


In other business, a decision on the 2002 borrowing resolution was postponed until the September board meeting to more closely examine the amount needed. The USPS has a $15 billion borrowing limit. With the USPS's action to hold down expenses and the freeze on capital expenditures, it is expected that the borrowing request will be less than that forecasted at the beginning of the fiscal year. The USPS had estimated it would borrow about $1.6 billion.


Other news included the board's funding approval for a new 34,251-square-foot Fairfax, VA, main post office.


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