Shock of shocks, I just heard that the Senate decided not to fund the famous – or was it infamous – bridge to nowhere in Alaska. This despite the well-publicized pout and resignation threat on the Senate floor by Sen. Ted Stevens, R-AK.
If this cataclysmic event can occur, perhaps it’s not too late for something positive to happen to postal reform legislation. Or, perhaps, just to those financial elements of reform that we can all agree on.
Let’s review the landscape. Studies were done several years ago to try to determine just how large the “mailing industry” and its environs were. The study, as reported by the Postmaster General’s Mailing Industry Task Force, indicated that “postal and package stakeholders including the providers of direct and indirect mailing services and the United States Postal Service” had annual revenues of $636 billion.
According to the study, when you include industry segments that depend on mail for fulfillment, customer acquisition and retention – including catalog companies, printers and publishers – the total revenues reach almost $900 billion, with a workforce of 9 million. Yet it often appears that the industry doesn’t believe its own research. It certainly doesn’t seem to throw its weight around.
Take the current legislation. It has many elements that industry members can agree upon as well as disagree upon. Today we have a situation in which Sen. Christopher “Kit” Bond, R-MO, has introduced an amendment to require that postal rates have as an “objective” to be “fair and equitable.”
The bill under consideration has fair and equitable being a “factor.” According to many in the industry and at the USPS, this seemingly innocuous language change would destroy all the other detailed pricing provisions in the bill. Who knows why Bond introduced this amendment? Could it be because greeting card company Hallmark is headquartered in Missouri? In any case, Bond has put a “hold” on the legislation unless his amendment is inserted into it.
What a strange place the Senate is. Presumably they vote on legislation, with the majority viewpoint winning. But sometimes one senator can stall a bill. I was reading the Constitution the other day, and I must have missed that section about voting.
Anyway, there are two elements of the legislation that, I naively believe, the mailing industry can agree upon. They are the payments that Congress has forced the postal service to make for military and Civil Service Retirement System pensions.
If the industry really believes that it is big, accounting for 9 percent of the GNP, it should ask its congressional supporters to just fix the mandatory payments problem and save the other elements of reform for another day.
Now let’s switch to other items of importance, starting with the upcoming postal rate increase. The USPS Board of Governors surprised the mailing industry with its decision to raise postage rates on Sunday, Jan. 8.
The industry had anticipated the increase on Sunday, Jan. 15, the weekend of the Martin Luther King Jr. holiday … anticipated, by making plans to have mailings completed before the MLK weekend. It’s never good for a supplier to have an angry bunch of customers, even if the supplier thinks it’s the only game in town. And the USPS angered many of its customers through this selfish and unexpected action.
I noticed a financial bulletin in The Wall Street Journal on Nov. 11 involving Deutsche Post World Net AG, more commonly known to us as the German postal service. Deutsche Post said its third-quarter profit more than doubled, “helped by increased sales in the international mail business.”
Hmm, I wonder whether the increase in sales came from taking market share from the USPS? Deutsche Post’s profit in the quarter was $477 million on a sales volume of $13 billion. This is a very respectable return on sales of almost 4 percent.
Staying on the financial side, CFO and executive vice president Richard Strasser announced that after 36 years he will retire from the postal service early next year. Dick will be greatly missed for the openness and illuminating manner in which he presented USPS financial statements. We wish him well in whatever he chooses to do next.
Lastly, the passing of former Postmaster General Preston Robert Tisch has saddened us all. Bob was PMG for about two years beginning in 1986. He often joked that he sometimes wondered why he took the job when he could have been on a beach in the south of France. But he will be remembered for bringing a customer focus to the postal service, and for when he noted that the USPS needed to consider the “total” costs that mailers face in dealing with postal rates: that is, the direct postage costs as well as all the preparation, mail makeup and reporting requirement costs that go along with a mailing. That message is well worth remembering.