Retired PMG Discusses What's Next for Himself, USPS

Marvin Runyon spoke with DM News on May 15 — his last day as postmaster general — about his reign at the U.S. Postal Service and what he did for direct marketers during his six-year tenure.

Among his accomplishments, Runyon, 73, helped contribute to a boom in direct mail. In 1992, when he took office, national advertisers spent $25.4 billion on direct mail. That figure grew to $37.4 billion in 1997.

Indeed, Runyon was considered the PMG who actually turned the postal service into a profitable business. He also was one of the few postal leaders who looked to technology to speed up mail processing. During his tenure, robotic computers, optical character readers and automated tray management systems were added. In addition, from 1992 to 1993, Runyon reduced administrative staff by 23,000. And last year, the postal service announced its third straight surplus of $1.3 billion.

Before joining the USPS, Runyon held several management positions at Ford and Nissan America but was best known for turning around the Tennessee Valley Authority, of which he was named chairman by President Reagan in 1988. There, he was credited with downsizing and re-orienting the organization.

Runyon, who is undecided about what to do next — except rest for a while — was succeeded by William J. Henderson, former chief operating officer and executive vice president of the USPS.

DM News: What do you think has been your biggest accomplishment for direct marketers?

Marvin Runyon: I think one thing that I always talk about is the fact that the rates for direct mail haven't increased an awful lot. In fact, increases have been the lowest they have been in history. We've been able to do this because we've put in programs that let us listen to our customers and find out what it is they need to help them grow. We are interested in seeing direct mail grow. This category of mail is very important because it provides a lot of revenue to the postal service.

DM News: I'm interested in technology and how the USPS views it. Do you think the growth of electronic billing and e-mail will affect the First-Class mail category, and is it something the USPS should worry about?

M.R: I consider it a very big problem. In the past six years, we've lost $5 billion in revenues in First-Class mail because of e-mail, fax and electronic data movement like electronic billing. I think that's going to continue to grow, and we have to change the way we do our business. For example, we can use electronic deposition to move direct mail around the country. We can send this type of mail by electronic means to a city that is, say, two days away to save on two days of transportation. Some people who do direct mailing send mail all over the United States, but we can move that mail electronically and then print it. We are looking at putting these initiatives in place now.

DM News: Some of these initiatives have been put into place for the small office, home office market. Do you think this will translate to the larger mailers?

M.R.: I think it definitely will translate to the larger mailers. You take the large mailer — our largest First-Class mailer mails nothing but bills — and we can move those bills electronically from California, where they are located, to New York, print them in New York and deliver them in New York, Philadelphia and so forth, even on the same day. Whereas, if they mail it out there, it's two to three days to get there, plus air transportation. We are going to spend, in the next five years, [$5.9 billion] on technology. We are getting processes in place where we'll be able to track every letter and where it is at all times.

DM News: Is Henderson aware of these programs and will he continue them?

M.R.: Absolutely. I [had] a management committee consisting of five people, one of which [was] Bill, and he helped make those decisions. He is very aware and very knowledgeable.

DM News : Is there anything that you hope will change or improve for direct marketers under the new PMG?

M.R.: I think Bill Henderson understands direct mail even better than I do because he's been around here a long time. He was also our chief marketing officer. I know that he is very innovative, very forward-thinking and understands the importance of direct mail. He is also very involved and very good with people.

DM News: What is the single biggest challenge he faces?

M.R: I think the labor negotiations [between the National Association of Letter Carriers, the Mail Handlers Union and the American Postal Workers Union], which conclude in November, but begin in August. I believe that these three unions will reach new contracts without going to arbitration. I think Bill Henderson and Jack Potter, our labor relations vice president, are two people who understand the needs of the employees and the needs of the unions.

DM News: What's important to our readers right now is rate-case implementation. What effect did you personally have on the last rate-case implementation decision and how much do you think Henderson will have on this one?

M.R: The board [of governors] makes that decision as a whole, but we have been talking to the board. One of the things we have to look at is that we have to continue to pay back the money that we owe. Right now, we have a negative equity, and we need to eliminate that. Also, we have a responsibility to continually improve our quality. To do that, we have the $17 billion [in capital investments]. All of this has an effect on implementation.

DM News: Does your decision to leave now have anything to do with the [rate case] decision being made now?

M.R.: My decision on timing is because I've served 10 years in the federal system, and I think that's a reasonable amount of time for a person to give back to his country.

DM News: What are you planning to do next?

M.R.: For the next month, I'm going to sit in a chair with my feet on a table. I will, however, do something in the private sector, but I have made no decisions. I'm going to wait for a while — the opportunities are out there.

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