Sunday, March 8, 2015

Tasers on Stun: 9 New Business Ideas for the U.S. Postal Service

Postal officials are taking a close look at the value of the U.S. Postal Service brand and how the agency can capitalize on it. That will inevitably lead to proposals for new products like toy postal delivery trucks and USPS-branded packing supplies.

To make some real dough, the folks at L’Enfant Plaza will need to use some creativity and entrepreneurial spirit. Just imagine the following USPS-branded ventures that would build on the unique strengths of a proud organization that can trace its roots back to Benjamin Franklin:

1) Cash Flow Management

How do postal officials do it? USPS loses billions of dollars every year, receives no subsidies, and yet never misses a delivery. If you’re living paycheck to paycheck, turn to the folks who have to dig into the cookie jar a couple of times a month to cover 600,000 paychecks.

With USPS BS (Bankruptcy-Avoidance Services) at your side, you’ll be able to live beyond your means year after year without being able to borrow a dime. Let their creative accountants handle all aspects of your personal or business finances. (Except your retirement plan. Congress has been known to “borrow” retirement funds from the Postal Service.)
Legal Eagle

2) Traffic Court Lawyers

Got a parking ticket? Do what the Postal Service does: Don’t pay it! For a reasonable hourly fee,USPS’s Blue Eagle Legal Services will help you claim immunity, dodge local traffic laws, and double-park wherever you want. (Disclosure: Blue Eagle performs no work on Sundays, unless your name is “Amazon.”)

3)  Let's Play Post Office!

Even little kids know what a post office is, so why not capitalize on that brand identity with a series of postal-themed games, like Find the Mailbox in the Dark or Decipher the Scribbled Address?

Angry Birds? Wait until you see Angry Shop Stewards. And for big laughs at birthday parties, don’t forget Pin the Grievance on the Supervisor.

4) Post Office – The Adult Edition

Let’s not leave out the grown-ups. They can get in on the postal-themed fun with hot games like Lick My Stamp and Fifty Shades of LiteBlue!

5) Fast Shredding System
Ready to shred
Here are the facts: 1) People trust the Postal Service. 2) Shredding documents is a boring, thankless task. 3) USPS has 100 giant Flats Sequencing System (FSS) machines that haven’t succeeded in lowering the agency’s costs but do a great job of ripping covers off of magazines and catalogs.

That’s an opportunity for USPS to enter the field of secure document destruction. Just leave your sensitive papers in a specially marked package to be picked up by your trusty letter carrier. It will make its through the Postal System until it's fed into one of the football-field-sized Fast Shredding System machines, which will chew up the pages faster than you can say “For this the Postal Service spent $1.4 billion?”

6) Management Consulting

Let’s face it folks, American businesses have gotten soft, what with all this employee empowerment, sensitivity training, and Kumbaya singing.

If your employees are on the verge of actually liking their jobs, it’s time to bring in a Tiger Team of Postal Service managers to remind your staff that it’s not supposed to be fun, it's supposed to be work, dammit. They’ll show your managers how to set unrealistic goals and then scream at employees  who won’t comply.

Are your first-line supervisors showing disrespect for upper management? The USPS experts will teach them the proper brown-nosing techniques. Or get them filling out enough meaningless reports to prevent them from doing any harm.

And don’t forget that the U.S. Postal Service has probably subjected more employees than any other organization in the world to the cult of Lean Six Sigma management. USPS has even developed the Six-Sigmoidoscope, which can probe your employees to determine which of them has drunk the Kool-Aid and is a potential Black Belt of BS.

Priority Male
7) Male Strippers

Move over, Chippendales, the Postal Service’s own First-Class Males are in the house. USPS has recently brought in thousands of young City Carrier Assistants and put them through their paces working 60 hours a week on walking routes.

Now they’re buffed up enough to put the UPS guys to shame. And boy do they have some packages! Ladies, be sure to bring plenty of bills to stuff into their satchels.

8) Dog Obedience Training

Who knows more about handling unruly dogs than longtime letter carriers? Get your tickets now for Naughty Dog Night at your local post office, where moonlighting postal workers will show you how to stare down a snarling canine, outrun a vicious pack, and pepper spray a pesky pooch. And get 20% off your purchase of a USPS Old Blue Taser, for those times when Rover needs a little extra reminder to obey.

(Warning: U.S. Postal Service Dog Obedience products should not be used in conjunction with Fifty Shades of LiteBlue.)

9) We-Deliver Obstetric Centers

Why have your baby at a giant, soul-less hospital when she could enter the world in an historic former post office? Turn to the folks who've been handling America's special deliveries for over 200 years.

At We-Deliver, every baby boy gets his very own Intelligent Male barcode!. (Yes, the politically correct Postal Service also offers Intelligent Female barcodes and Intelligent Transgender barcodes.)

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Thursday, March 5, 2015

Sticker Shock: Size of Postal Increase Stuns Publishers

March 6 update: The PRC sent the proposed Standard, Periodicals, and Package Services rates back to the Postal Service for revisions and clarifications. Here's the PRC press release.

Although the April postage hike for Periodicals will supposedly average only 1.4%, some publishers are learning that their increases will be 10 times that amount.

The biggest rate increases will probably hit relatively lightweight publications that contain little or no advertising, such as weekly magazines and association newsletters. Some other publishers, however, will probably see lower postage bills.

Projections for nine leading nonprofit publications show increases ranging from 3.4% to 16.2%, with all but three above 8%, The Alliance of Nonprofit Mailers wrote this week in an alert sent to its members. Although the U.S. Postal Service announced the new rates nearly two months ago, the alliance noted that publishers could not calculate how the rates would affect them until recently, when USPS spelled out some new mailing rules changes that will accompany the new rates.

Such large postage hikes are "likely to force many of these newsletters and magazines to discontinue mailing, or reduce the frequency of their publications, and look elsewhere to achieve their very important mission," the alliance wrote.

"We believe that the Postal Service did not intend to impose such large increases on important nonprofit publications, and that the increases are unintended collateral effects of a larger, complex pricing strategy for Periodicals," the alert said. It added that the alliance is trying to get USPS to amend its rate proposal.

For Periodicals and several other types of mail, the new rates place less emphasis on weight-based charges and more on other factors that have a more direct impact on USPS costs. That's good news for hefty fashion magazines and some types of letter mail, but not so good for mailers that aren't paying much for weight to begin with.

The Postal Service itself has been thrown off by the complexity of its own changes in rates and rules for the Periodicals class. It intended for the average Periodicals increase to be nearly 2%, but has adjusted the calculation to 1.4% after acknowledging calculation errors pointed out by the Postal Regulatory Commission.

And recent questioning from the PRC indicates it may still not be satisfied with the Postal Service's calculations.

Related articles:

Thursday, February 26, 2015

Rival Print Giants Donnelley and Quad Not Looking To Get Hitched

R.R. Donnelley and Quad/Graphics, the USA's two largest printing companies, apparently have their sights set on gobbling up more competitors -- but not each other.

Quad's CEO, Joel Quadracci, was caught off guard on Tuesday by a question from a Goldman Sachs analyst at the end of Quad's quarterly earnings conference call.

"I’d kind of love to hear your thoughts on potential regulatory pushback or maybe lack thereof on a tie-up between your company and your biggest competitor," said Fred Krom. Quadracci at first thought the question was about Courier Corp., which Quad recently planned to acquire until Donnelley stepped in with a higher offer.

Krom clarified: "I was actually referring to you and/or Donnelley but . . ."

"Oh, so me acquiring Donnelley?" Quadracci asked.

"You or vice-versa."

"We haven’t done any work on that and that’s not in our plans," Quadracci responded.

Donnelley officials were not asked the same question at their conference call Wednesday. But it's clear they have their hands full with Courier and several other acquisitions.

Though the U.S. printing industry is highly fragmented, certain segments are a true duopoly of only Donnelley and Quad. For example, they have North America's only rotogravure publication presses, making them the only real players that can compete for catalogs and magazines that have print orders in the millions.

So it's understandable that Quadracci wouldn't even dream of a linkup with his arch rival getting the approval of antitrust authorities.

But Goldman Sachs isn't known for asking idle questions.

Perhaps Goldman has noted that antitrust decisions involving print-media industries aren't necessarily logical: For example, the government took a full year to approve the merger of almost-bankrupt Verso Paper and just-out-of-bankruptcy NewPage, forcing a reshuffling of the industry that did little to preserve competitive markets for coated paper. But it didn't issue a peep last year when Quad bought Brown Printing, the duopoly's biggest competitor in the large-publication market.

Thursday, February 19, 2015

USPS Goof Gives Publishers a Break on Postal Rates

Because of a calculation error, the average postal rate increase for magazines in April will be less than originally announced.

The Postal Regulatory Commission, which spotted the error last week, calculates that the average increase for “Outside-County” Periodicals (primarily magazines, with some newspapers and newsletters) will be only 1.34%, not the originally announced 1.965%. USPS acknowledged the error on Wednesday.

The slip-up came in creating an apples-to-apples comparison of the current rules and rates to the new ones. The PRC noted that the USPS calculations failed to account for new rules that will result in fewer carrier-route bundles and more Flats Sequencing System-optimized bundles.

Given that the Postal Service allegedly loses money on Periodicals Class mail, the PRC questioned why the class’s rate increase was so low -- by far the lowest of the "market-dominant" classes.

“The Postal Service’s intention was to increase Periodicals prices by 1.965 percent,” USPS wrote in its response to PRC questioning. But with the correction noted by the PRC, the proposed rates “unintentionally reflect a percent price increase for Periodicals that is below the goal of 1.965 percent.”

USPS’s response did not indicate it would try adjusting the proposed Periodicals rates, which may not even be possible at this late date. But publishers won’t get off scot-free: In the next round of inflation-based rate increases, the “unused rate authority” is likely to be applied to levying a higher rate hike for Periodicals.

Sunday, February 15, 2015

USPS Struggles With Wave of New Hires

The U.S. Postal Service’s shift to a lower-paid workforce comes with a steep price. By the agency’s own admission, the hiring of more non-career employees has led to lower productivity, worse service, higher injury and turnover rates, and increased investment in new training programs.

USPS has historically been staffed by long-serving employees, but currently 103,000-plus employees -- one of every six active postal workers -- has been with the agency less than a year. That's triple the newbie rate of just four years ago.

In those same four years, despite cost-of-living adjustments and other pay raises for most employees, average base pay for the Postal Service has actually declined 4%.

Eat your young
The lower average pay rate was made possible by what some have called “eat your young” labor contracts – where current union members are well taken care of in exchange for concessions regarding future hires.

For example, USPS has more than 37,000 city carrier assistants, a non-career position that emerged from a 2013 labor contract. Their duties are similar to those of career letter carriers – but without most of the benefits and at barely half the pay.

“We hired over 80,000 non-career employees in FY2014 including PSEs [Postal Support Employees], CCAs [City Carriers Assistants] and MHAs [Mail Handler Assistants],” says the Postal Service's Annual Report to Congress. “In addition to trying to hire up to our contractual limits of non-careers, we also experienced a high turnover rate (in excess of 40 percent) for CCAs.”

With savings come new costs
“The non-career employees are generating significant rate savings, but are costing additional hours in hiring and training them, as well as in developing needed delivery experience.”

A major reason the Flats Sequencing System’s productivity dropped during FY2014, according to a recent USPS filing, was high turnover among supervisors and front-line employees. USPS recently responded with stepped-up training for supervisors in FSS operations.

Across the agency last year, other new training programs were rolled out, and the amount of time employees spent in e-learning programs nearly doubled. Now the Postal Service is scaling up its new-employee orientation program, with plans to “engage employees before their first day of work.”

A 12% increase in work-related injuries last year is causing USPS to “increase focus on at-risk employees and those who are new to the organization and less familiar with safe work practices,” says the Report to Congress.

The report also cites “the hiring, training and replacement (due to turnover) of many new employees” as a major reason it has missed its service (day-of-delivery) targets for First-Class Mail several years in a row.

In general, recent USPS communications indicate the agency was caught off guard by, but is now trying to come to grips with, the challenges of relying more heavily on non-career employees.

Related articles:



Monday, February 9, 2015

USPS Cost Cutting Ain't Cuttin' It, Mailers Group Says

From Flats Sequencing to Network Rationalization, many of the U.S. Postal Service’s recent cost-cutting programs have not been living up to the agency’s projections, a multi-industry mailers group says.

Worse, the programs have shifted costs to mailers without apparently benefiting USPS, the Association for Postal Commerce (PostCom) wrote in a recent filing with the Postal Regulatory Commission.

“While PostCom applauds the Postal Service’s attention to reducing costs, the information presented [in a recent USPS report] suggests that these efforts have not been as effective as the Postal Service projected,” PostCom wrote. Judging by some questions the PRC has posed to USPS the past couple of weeks, the regulatory body seems inclined to agree with PostCom’s assessment.

PostCom pointed out that USPS recently estimated only about $900 million annual savings, versus its projected $1.2 billion, from Phase I of its Network Rationalization plan that closed scores of mail-processing centers.

It also noted that, in 2013, increases in mail-processing costs caused by the new Flats Sequencing System were offset by lower delivery costs. Yet in 2014, both PostCom and the PRC pointed out, delivery costs for Standard-class flat mail (the main type of mail sorted with FSS machines) increased 8% while processing costs increased 9%.

“As mailers have incurred additional costs to prepare mail to meet FSS standards, the Postal Service has not seen a reduction in either processing or delivery costs from the implementation of this initiative,” PostCom wrote.

FSS productivity down
USPS acknowledged on Friday that FSS productivity declined last year, because of lower mail volumes and some operational issues.

“A high turnover rate was experienced in the operations for both the Supervisors and employees, resulting in a lack of understanding of the approved methods and metrics needed to drive the performance during the declines,” USPS wrote in a response to pointed questions from the PRC about FSS costs.

 “To address these deficiencies, the Postal Service provided on-site training at 5 Select FSS locations during August and September 2014. A minimum of two Supervisors from every FSS site nationally attended these training sessions. The sessions provided the supervisors with information regarding accepted methods and metrics used in the FSS operation to use and train others in their home sites.”

PostCom also questioned whether USPS’s Load Leveling Initiative is paying off.

Load Leveling is supposed to reduce the agency’s cost for handling Standard mail by spreading the workload more evenly throughout the week, resulting in slower delivery of some mail. But USPS has released no analysis of the program’s financial impact, and Standard costs keep rising.

“Without better data, . . . it is impossible to tell whether the Load Leveling strategy has limited these increases or furthered them,” PostCom said. In fact, the organization indicated, USPS's lack of analysis or transparency about it costs makes it difficult to assess the success of any of its cost-cutting measures.

More accountability needed
The Postal Service, PostCom wrote, needs to be “more accountable to the industry in reporting how its strategies are reducing costs, how the cost reductions will support a more effective and efficient USPS, and how these reductions will benefit the overall mailing industry.”

“In general, PostCom supports the Postal Service’s efforts to reduce costs. But the Postal Service, and the Commission, must understand that much of what is described as ‘cost cutting’is really ‘cost shifting.’”

“When additional costs are placed on mailers, and the Postal Service does not experience concurrent reductions in its costs, something is amiss.”

Related articles: