Wednesday, January 28, 2009

A smarter, smaller Postal Service?

U.S. Postal Service leaders were full of surprises today, with perhaps the biggest being that they are able to change course and adapt when necessary. Evidence of intelligent life at L’Enfant Plaza (postal HQ) today included:

  • Window envelopes: USPS announced it was backing off its plans, revealed only six days ago, to change the specifications for window envelopes in May. As Dead Tree Edition pointed out in “It’s curtains for the window envelope”, that would have outlawed all of the standard sizes of window envelopes and no doubt sent billions to landfills. The announcement says the Postal Service will work with industry to modify mailpiece standards more gradually. It still doesn't explain the interest in altering window envelopes, but some postal employees have commented that having the windows too close to the bottom edge causes them to get jammed in sorting equipment.

  • Five-day-per-week delivery: Postmaster General Jack Potter asked a Senate subcommittee for the authority to suspend delivery temporarily on “the lightest volume days.” He didn’t offer specifics and said he would implement 5-day delivery “only when absolutely warranted by financial circumstances.” But with USPS possibly heading toward a $6 billion loss this year (double last year’s loss), Potter can't very well ignore an opportunity to save several billion annually -- though skipping Saturday delivery could hurt such publishers as The Wall Street Journal, the Detroit News, and such weekly magazines as Time, BusinessWeek, and People.

  • No extra rate increase: Potter also demonstrated that postal officials understand price elasticity when he rejected calls for an “exigent” (emergency) price increase. “Driving up prices will only drive customers away,” he said, citing the loss of catalog volume after the big 2007 price increase for Standard flats. As I noted in “Postal costs to go up less than 4% – maybe”, that sensitivity to the plight of catalogs may mean higher-than-average price increases in May for Standard-class letters.

  • Facility consolidation: Potter diplomatically reminded Congress members that they often prevent USPS from becoming more efficient by trying to block the consolidation of “duplicative mail-processing operations.” He noted that everyone favors greater efficiency but “that support often weakens considerably when a specific change is proposed for a specific community.”

I’ve been generous in my criticism of the Postal Service, so it’s only fair that I offer praise when it’s warranted. The change of position on window envelopes occurred at light speed by federal-government standards. And Potter showed that he's not counting on Congress, mailers, or a miraculous economic turnaround to bail out the Postal Service. He recognizes that USPS must get smaller, including a 15% staff reduction at headquarters, and make tough choices to remain viable.

17 comments:

Anonymous said...

Potter has run the Postal Service into the ground. For years there are offices with clerks sitting around doing nothing and I'm talking post offices. He told the board he froze exec. salaries but didn't mention the huge salaries he and ALL his VP's got just before the freeze. Some posted on a website that the US has one president and one vice-president, have you counted how many VP's the US Postal Service has? Check that out.

Anonymous said...

So volume goes up for nearly 25 yrs and last few yrs it levels off (read crisis according to management).We have around 100,000 fewer craft employees. Also carrier routes were adjusted, therefor more street time,and given avverage 16% overtime last yr, things should level out. In my mid-upper mid class area there is no drop in catalogs, and more letter size advertising than ever.
Management can lie about numbers to get bonuses (sound familiar-AIG, CITIGROUP,ETC,ETC). The whole country is run by a lying culture in corrupt management.

Anonymous said...

5 day work week with no Tues delivery in the summer months will bring what Deadtree would like. Closing down the P.O. period. Yes great manglement brings great ideas? Do you think it would be closed on Sat? Really!!

Anonymous said...

I don't think anyone would consider not delivering Saturday as it is next to Sunday when they don't deliver. Same with Monday. If they skip a day (which they obviously should do) it would be Tuesday or Wednesday. Last year at a postal forum I asked a bigwig from the New York office if they would consider cutting a day of service and he treated me like a moron for asking the question.

Anonymous said...

The government can not run any business efficiently because they are not set up that way. Pay-For-Performance in the government is just set up for failure. When you get paid for numbers that don't measure up to excellence, make up some numbers that do. Hello, do you want the same type of people running your health care system that run any other government agency. No, I didn't think so. PFP is a joke when the government is paying extra in the form of bonuses, for doing your job. PFP pay system can't work for very long if your company is losing money. The days of the U.S.P.S. being a cash cow are over for ever, so the U.S.P.S. might better start making other plans if they are to exist at all.

Anonymous said...

Eliminating a day of delivery sounds like an useful idea. For businesses that have concerns, there's always caller service and PO boxes. Delivery in those fashions is independent of on-premise delivery. The comment about "huge salaries" is off-base. Executive salaries were brought somewhat into line with private sector and international post positions. The old salary caps were destined to only attract the independently wealthy or driven public service types. Real-world business acumen is needed...now more than ever. As for the window obsession, the goal appears to be running mail faster on fewer machines. Things that didn't used to be a problem will surface quickly as the USPS tries to do more with less.

Anonymous said...

Not delivering mail on Saturday or Monday would create a 2 day period without mail because of Sunday.That won't happen. Tuesday would be also be a bad choice because many federal holidays fall on Monday, which would result in 3 consecutive days with no delivery. Wednesday should be given the most consideration.

Anonymous said...

it seems to me that saturday is the logical choice. most businesses are closed on saturday and they're the only ones who "need" their mail.

Anonymous said...

usps should cut their big management force ,I mean "those who don't work on saturdays..." If any given day doesn't need them for the operation, what you all think? It's really a waste right?
also think about the HUGE money they withdraw as salaries.

So cut them at least like 50% not the workday or the poor workers.

Anonymous said...

No one is looking at the big picture. IF (A BIG IF) congress approves cutting ONE day of delivery; we're not only talking an increase of volume, we're talking about the loss of jobs. Potter also failed to mention that he's SAVING a boatload of money by the fuel prices dropping. Funny he failed to mention that. The "inspections" are doing with the plants being instructed to hide most of our 3rd class mail until AFTER the inspection.

Anonymous said...

that's a good one. USPS don't need those management people who never ever work on saturdays.all the operations can be done without them on saturdays why they would be there on any other days?
but who will take this step of course they are the decision makers

Anonymous said...

saturday would have to be the day; business to business mail is the bulk of first class mail now...shutting down on a business day...would be incredibly bad management

Anonymous said...

Would no mail delivery on Saturday save the post office billions of dollars as Mr Potter stated. Well let just take a look at what will take place. Some companies will move away from the Post Office and revenue will be lost. Mail Clerks and Processors will be required to take more time to move 3days of mail which would put more mail volume on carriers thus causing overtime for both carriers and clerks. Management fail to understand that poor supervisors and managers are the problems for overtime and the post office budget problems. Why are the Post Office paying its employees to stay in First Class Hotels when they go to meeting. Some of these hotel range from $180-175 a day. Why does the Post Office fail to follow the contract as required but instead chose to violate and pay for these violation. Last year alone one area Vice President chose to use Rural carrier on city routes and told District Managers to pay for this violation. Mr Potter fail to realize that most of the problems that the Postal Service have is mismanagement. We need new management techniques and new blood to generate revenue. I hope Congress and the Senate dont address Mr Potter request. This is the same person who want to prioritize the Post Office.

Anonymous said...

The business routes don't even deliver mail on Saturday. They work it, and put it in a bucket for the next delivery day.

The mail volume is so low, that eliminating Saturday would create a more evenly distributed mail flow and a make it easier to work a full 8 hour day. No more slammed one day, light the next.

Anonymous said...

Potter has not run the Postal Service into the ground. Thank your politicians for that with their mandate for prefunding retirement and not allowing the USPS, until recently, to carry profits from year to year. When they finally allowed the USPS to operate more like a business, they slapped the prefunding requirement on. The PMG does not make a lot of money compared to other executives, especially since he's responsible for over 700,000 employees. I agree there are far to many VPs. HQ has been cut 15%, the Areas and Districts just announced cuts. Can't cut craft employees except for cutting overtime. Can't consolidate (again thanks to politicians)money-losing offices, even if it means moving operations only a few miles away.

stocksystm said...

Doesn't anyone go away for the weekend? Not getting mail on Saturday would be an obvious blessing and should have been done long ago.

Anonymous said...

Everyone is missing the big picture and they are all talking about the circumstances now. When all is said and done, the mail volume will be lower, employees will still want to receive more money. Volume will never increase enough to balance out the books, never. So either the USPS comes up with a way to downsize with conditions (without the unions dictating their demands) to match the slowing mail business or it succumbs to taxpayers as a tax driven business. ( which taxpayers should not encourage to happen) Gone are the days of mountains of mail to be delivered, we are entering into a new world of communicating. It took some of the land line phone companies more years than needed to finally realize; people are not ordering new land lines and probably never will.

Consumers drive the market and unless you have a commodity they want, you are in essence "history".