Potter: Reforms Under Way, More Coming

SAN FRANCISCO — Postmaster general John E. Potter outlined initiatives begun to strengthen the U.S. Postal Service and benefit mailers during a general session at the Direct Marketing Association's 85th Annual Conference & Exhibition here yesterday.

Potter said his short-term vision of postal service improvements hinges on four goals: reducing costs, improving service, changing the rate-making process and enhancing products and services to expand the business.

Potter told attendees that the mailing industry must continue to work with Congress to modernize the USPS.

“We cannot ignore the fact that the postal service continues to operate with a fundamentally flawed business model,” he explained, referring to the 30-year-old law that established the USPS to operate in a businesslike manner without taxpayer subsidy. “We operate under a model that no longer gives us the flexibility we need to meet the changing needs of our customers.”

Potter discussed the negotiated service agreement the USPS recently filed with the Postal Rate Commission, saying the postal service stands ready to negotiate NSAs with mailers of all mail classes, including Standard mail.

Potter also said he wants to begin discussing phased rates over the next few months.

“When we hit customers with a single, large rate increase, it causes havoc in your business planning cycle and impacts your ability to reach new customers,” he said.

Phased rates would be smaller and spaced over more predictable time periods, allowing mailers to plan budgets further in advance.

Today, Potter said, “you can plan your holiday season budget for 2003 … My goal is to enable you to accurately plan your holiday mailing budgets for 2004 and 2005.”

Some of the best ideas on postal reform have come from people in the mailing industry, Potter said. For example, last year a joint industry and postal service work group devised guidelines to boost the readability of flat-sized mail pieces.

“The payoff is a set of voluntary guidelines that will help increase read rates on our new automated flat sorters to almost 100 percent and help you reduce costs,” he said.

The USPS is also looking at ways to better handle unique sizes from mailers.

“We know, for instance, that you need to design mail pieces that have more appeal and impact for your customers,” Potter said. “Right now, we're working on ways to give direct mailers more flexibility to design irregularly shaped, high-impact direct mail pieces. The idea is to allow these pieces to bypass our processing operations and still ensure efficiency and affordability for you.”

In a question-and-answer period and after his speech, Potter said that the USPS will introduce a campaign Oct. 25 in Albany, NY, in which letter carriers will sell package services to small-business customers.

Asked about privatization of the USPS, Potter said “right now, it is not in the future. I believe that it is something that needs to be part of the debate about where the postal service goes in the long term, but I do not see privatization as a short-term solution.”

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