Musings From Vermont and Elsewhere

I recently attended the annual meeting of the Continuity Shippers Association in Stowe, VT. CSA’s members ship parcels mainly in the Bound Printed Matter, Standard mail and Media subclasses. Therefore, they are interested in the preservation of efficient mailing of parcels in those subclasses.

Bill Hoyt, longtime postal maven par excellence and executive director of the CSA, led the meeting. In addition to CSA members, there were attendees from the U.S. Postal Service, Postal Rate Commission, mailing industry trade associations, various mailing industry attorneys and economists and one of the major postal labor unions.

I can’t speak for the CSA members, but my sense is that what they want from the USPS is a low-cost parcel delivery service that consistently delivers their products with a reasonable degree of speed and minimal frills.

A major concern of this group involves the USPS’ plans for the next postal rate increase. The size of that increase clearly will be affected by congressional action or inaction on the postal pension Civil Service Retirement System issue.

Another concern involved rumors that the USPS planned to include in the next rate case a delivery confirmation service for all parcels shipped, whether requested or needed by the shipper or not. It was estimated that this could add 25 cents to the price of all parcel shipments. This service could raise postage bills significantly and was not desired by CSA members.

Fortunately, the postal service representative at the meeting said the USPS had heard the industry concerns and had dropped plans to add the delivery confirmation requirement to all parcels.

As to be expected, the postal pension payments/CSRS issue was a major subject of discussion. Some think the best hope of relief is to continue to support the postal reform legislation, which contains pension relief, and deal with any legislation deficiencies through future legislation. Some think that the likelihood of reform legislation passing is minimal, therefore the industry should do a full-court press on CSRS correction now. However, some thought the CSRS correction requirement was not immediate.

In terms of its effect on the next rate case, the correction can be put off at least until the USPS files for new rates. The filing is expected before mid-2005. And precedent exists for revenue-requirement adjustments during a postal rate case.

However, correction will require congressional and administration action, and that has been lacking. Vince Giuliano, senior vice president of government relations at ADVO, and a major voice behind CSRS reform, suggested that if we retitle CSRS to mean “Cease Stealing and Robbing our Savings,” it might spur action. We all wished Vince luck.

Another discussion topic was negotiated service agreements. Much interest exists in having wider-ranging contracts between companies and the USPS that would provide financial and other benefits to both parties. NSAs that would look at a company’s total range of business with the USPS were discussed, perhaps a blanket agreement. Also discussed were agreements that would create a different rate structure for new business or prospecting mailings.

But as one presenter noted, the NSA process is too long and too expensive. This raises the question: Are they worth it? At times it seems that the PRC is more interested in expanding the NSA field of view than the USPS.

An undercurrent during this meeting, and I’m sure at other industry meetings, is the great job postmaster general John E. Potter and his team have been doing in increasing productivity and controlling costs. This is particularly significant as we finally see the long-anticipated decline in First-Class mail volume and its replacement by lower-revenue, but almost as workload-intensive, Standard mail.

Also, the postal service has announced that it plans to close and sell the Marina Del Rey, CA, facility and consolidate the operation with the Los Angeles GMF. You can be sure that at some point the American Postal Workers Union will draw on its political power and petition its California congressional friends to keep the facility open.

How will the mailing industry react when/if this scenario occurs? Will industry actively and openly support the USPS or will it hide from a likely fight? Stay tuned.

Now it’s off to the newly constituted National Postal Forum with its somewhat reconstituted board of directors. I look forward to seeing what has changed.

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