Paper Companies Getting Liquored Up

Now we can add tax breaks to the long list of valuable byproducts that come from the kraft pulping process.

The kraft, or chemical, pulping process has long been known to produce such marketable items as turpentine, cholesterol-lowering food additives, electricity, and chemicals used in everything from inks to asphalt to chewing gum – not to mention the pulp that forms the main ingredient in freesheet papers and is a significant part of many groundwood papers.

The Toronto Globe and Mail reported a few days ago that “the devastated forestry industry is agog over potentially huge U.S. alternative-fuel tax breaks based on a substance the sector has in plentiful supply: black liquor, a byproduct of the chemical pulp-making process.” (Not that becoming agog over liquor is anything new for paper companies, as evidenced by the recent Paper Week gathering in New York, but that was mostly brown liquor.)

Several paper companies revealed last week that they have received or will receive millions of dollars from the U.S. government this year for using black liquor to power their plants. For using black liquor at one of its mills, Verso Paper received a government payment in the fourth quarter of 2008 worth $29.7 million, which earlier this month was enough to buy all of the company's stock.

Pulp mills have been using black liquor as a power source for decades. In an odd twist on the concept of alternative fuels, they have to add a conventional fuel, such as diesel, to the black liquor to qualify for the government handouts. A stock analyst said Verso, International Paper, Domtar, and others are “burning black liquor into gold".

Kraft pulp mills have often been a target for environmentalists because they convert two pounds of tree to one pound of pulp, not to mention the rotten-egg odors they can produce. An idea kicking around the industry for several years has been to convert kraft mills to “forest biorefineries” (Doesn’t that sound greener?).

Rather than focusing on pulp, with byproducts as afterthoughts, a biorefinery would maximize the value of the wood by making a wide variety of products -- including ethanol, black liquor, and acetic acid – with less energy consumption and waste. Now Uncle Sam is sweetening the pot by offering subsidies for both the ethanol and the black liquor.

But converting a pulp mill to a biorefinery doesn't solve one problem: The plant would still produce pulp, which no one seems to want much of these days. Perhaps the paper companies could get a government grant to convert an idle paper machine (plenty of those these days) into a "biomass dryer" that would process the pulp into a burnable product that could qualify for more alternative-fuel subsidies.

Don't you just love free-market capitalism?

Quebecor Closing Covington Plant

Quebecor World told customers and plant employees in the past few days that it is shutting its Covington, TN printing plant, sources tell Dead Tree Edition.

Quebecor World still lists the Covington plant on its Web site without reference to it closing, but the sources say the plant will be shuttered within a couple of months. Quebecor World's 2008 annual report, released last week, said the printing industry "is still in the process of consolidating and is still suffering from overcapacity."

"We are also aggressively aligning our cost structure to mitigate the impact of the economic downturn," the report added, without mentioning any plant closures other than the three that Quebecor World implemented last year.

Covington's pressroom has mostly long-cutoff presses -- that is, heatset web offset presses that typically produce pages that are 10 7/8" tall. Most magazines and catalogs have moved to short-cutoff presses, which produce pages that are only 10 1/2" tall, thereby reducing paper and ink costs. And once they make the move to short-cutoff, they rarely go back.

This is the second big hit in barely three months to the town of 9,000 north of Memphis. In December, AbitibiBowater announced the closure of its NuWay converting facility in Covington, which turned newsprint into coated paper.

No Postal Rate Increase Next Year?

The chairman of the Postal Regulatory Commission was only partly correct when he told Congress this week that postal rates seem likely to rise less than 1% next year.

There's actually a good chance that the rates for market-dominant classes (such as Periodicals, Standard, and First Class) won't increase at all in 2010. But that may not be all bad news for the U.S. Postal Service.

Dan Blair's exact words were, "Should current inflation trends continue, the price adjustment for 2010 would likely be less than one percent."

He has a point: Even if the Consumer Price Index rises at an annualized rate of about 6.7% for each month during the rest of 2009, the Postal Service would only be able to raise rates by 1%. And if the inflation rate is only 4% each month for the rest of the year, the Postal Service will not be able to raise rates for the market-dominant classes at all. (Sorry, mailers, there's no requirement that the Postal Service reduce rates if the average monthly change in CPI is negative this year.)

Although consumer prices have risen at more than 5% (annualized) the past two months, the CPI in February was still more than 3.5% below its peak in July of last year. Fuel prices caused the CPI to spike in mid-2008, then crash late in the year, and now inch back up in early 2009.

The Postal Service has indicated it spent nearly $3 billion on fuel the last fiscal year (October 2007 to September 2008). By comparison, it may be on track to save $1 billion or more this fiscal year.

Low inflation also helps the Postal Service's labor costs. Many unionized employees who were recently due for cost-of-living adjustments got nothing because the CPI did not increase during the relevant period.

Ultimately, fuel prices, rate increases, and cost-of-living adjustments may not have much to do with the Postal Service's fate. Even getting relief from the Postal Service's unusually onerous retiree-healthcare obligation, as seems likely, may just delay the inevitable.

The Postal Service needs to make radical reductions in its costs -- by consolidating operations or reducing service, for example -- to match its declining revenues. Short of that, sooner or later it will run out of money.

Coated Paper Prices: What's Your Vote?

Publication paper prices in the U.S. will not go much lower, a panel of paper-industry experts said today.

"Given the tight economic environment, we expect prices to remain essentially flat," read the four-person panel's statement to a session at the Publishing Business Conference & Expo in New York, my spies tell me. That's in contrast to my speculation last week that permanent overcapacity would cause further significant drops in the prices for coated paper. (See "Coated Paper Prices: Headed for a Crash?")

So what do you think? On the upper right of this page, you'll see a chance to cast your vote. RISI's Paper Trader pegged the February price of 40# coated #5 as $900 per ton ($45/cwt.) Where do you think it will be in July?

The panelists indicated that uncoated freesheet prices have already hit bottom, while coated prices will drift a bit lower before stabilizing. Coated prices cannot go much lower because some mills are barely recouping their cash costs now, according to paper broker Scott Clifford. He is vice president of Clifford Paper Inc. and knows far more about the paper market than I.

I'm told that Janet Grimm, VP of Book Publishing Papers at another big broker, Lindenmeyr, warned the audience that recent capacity shutdowns mean that the paper market will tighten "in the blink of an eye" once the economy starts improving.

Some buyers in the audience were not convinced, and neither am I, at least not for coated paper. Too much demand has shifted to other grades or simply disappeared permanently for there to be such a violent "snapback". Maybe a couple of machines will be shuttered if prices drift lower, but beyond that I think it will take significant price declines before another 1.3 million tons of annual capacity is removed, as RISI's John Maine says is needed to keep the market in balance.

A lot of folks (buyers, mills, banks, bond-rating agencies, etc.) are trying to make decisions now based partly on where paper prices are headed. So let's help them out with some "crowdsourcing" -- cast your vote! (If the poll doesn't work in your browser, please email me your vote at dead.tree.edition@gmail.com.)

9 Cost-Cutting Guides for Publishers

The folks doing the "A Crash Course in Cost Cutting" at tomorrow's Publishing Executive Conference have put together a great list of helpful articles.

They asked me to post the list to make it easy on the attendees and to avoid unnecessary handouts. I'm happy to do so because the list has some great resources for my readers (and also happens to include three articles by yours truly):

1. “7 Tips for Analyzing Print Prices”: Alex Brown demonstrates that there's more to analyzing printing proposals that simply comparing Price A to Price B. Publishing Executive magazine.



2. “Paper Options: Looking Good Without Breaking the Bank” : Folio: magazine discusses how it saved money on paper and how other publishers can as well.



3. “16 Ways to Save Money on Your Print Jobs”: Margie Dana of Boston Print Buyers provides a list that is especially well suited to sheetfed printing.



4. “US Paper Price Index”: Charts the market prices for LWC and SCA paper.



5. "Dos and Don'ts of Buying Paper": Multichannel Merchant's advice for cataloguers is just as relevant for magazine publishers.



6. “Heavier Paper Can Save Money”: Dead Tree Edition shows that lighter paper isn't always cheaper -- and offers a free model for calculating the total cost (paper and distribution) of papers with different basis weights.



7. "Co-Mail Confusion: Do you know how much you’re really saving?”: Steven W. Frye unravels the complexities of calculating co-mail costs and savings for Publishing Executive magazine.



8. "How About Some Free Printing": Dead Tree Edition shows how much money some publishers are leaving on the table by not co-mailing.



9. “The Conde Nast Protection Acts”: Dead Tree Edition explains the new Periodicals rates that will take effect in May, including a handy summary of the changes to each rate. The article also shows that the heaviest publications will get the smallest postage increases -- thus the Conde Nast reference.

The Infamous UPM-Stora Meeting

Today’s history lesson, paper-market observers, regards the discussions a UPM executive and a Stora Enso executive had in 2002 about the need for market leadership in the "fragmented" North American market for publication papers.

I alluded to the meeting in yesterday's item about coated paper prices but thought it would be enlightening to provide details, especially for those of you who think private equity is the root of all evil in the paper industry. Both UPM and Stora are publicly traded.

The passage below is from a document Stora itself submitted at its criminal antitrust trial:

In January 2002, UPM promoted Markku Tynkkynen to become the President of its Magazine Paper Division. As President of the Division, Mr. Tynkkynen was responsible for magazine paper sales and operations on a global basis, including within North America. At the time of his appointment, prices for magazine paper market in the United States were the lowest they had been in years. In an effort to improve sales in the U.S., Tynkkynen restructured the Magazine Paper Division and hired Heikki Malinen as the head of sales in North America. Mr. Malinen developed a sales plan — referred to as a “go to market” approach — to increase UPM’s market share. Under that plan, UPM’s policy was to be a price follower — in other words, to follow a competitor’s price increase announcements — rather than a price leader.

In the late summer of 2002, Mr. Tynkkynen contacted SENA’s President Kai Korhonen while Mr. Korhonen was in Finland visiting his family and invited him to lunch at UPM’s headquarters in Helsinki. Messrs. Tynkkynen and Korhonen had known each other for more than thirty years, having begun their careers together at a mill in central Finland and owning vacation homes on the same lake. Mr. Korhonen, an engineer by training, had been serving as SENA’s President since September 2000 and his primary task was to integrate the operations of Consolidated Paper, which had been acquired by SENA’s parent company, into SENA. Mr. Tynkkynen invited Mr. Korhonen to lunch to learn about the challenges associated with operating in the United States, identify SENA’s position in the U.S. market, and to figure out if SENA had the capacity to lead a price increase in the United States. During the course of their lunch, Tynkkynen’s questions about SENA’s position in the market were answered: Korhonen told him that the U.S. market was “fragmented,” with International Paper, SENA, UPM, and MeadWestvaco being of about equal size. Korhonen indicated that SENA was not a price leader in the United States. Tynkkynen knew, however, based on SENA’s past behavior, that it would nevertheless be a price follower—that is, it would follow a competitor’s increase.

Messrs. Tynkkynen and Korhonen met again on November 6, 2002, when Mr. Tynkkynen was traveling in the United States on business. Mr. Tynkkynen was again responsible for initiating and arranging lunch—this time at the Hilton hotel, adjacent to Chicago’s O’Hare airport. At that lunch, Messrs. Tynkkynen and Korhonen discussed various logistical issues, as well as the poor state of the magazine paper market in the U.S. They both agreed that the market was very soft. Given the soft nature of the market, it was clear to Mr. Tynkkynen that the entire industry needed a price increase and, in that respect, SENA and UPM were no different. Based on that fact, and in light of Mr. Korhonen’s representation in August that SENA would not be a price leader, Tynkkynen believed that SENA would be a follower if someone else increased prices.

Ten days after he met Mr. Korhonen met for lunch in Chicago, Mr. Tynkkynen learned, on November 16, 2002, that competitor MeadWestvaco had issued a price increase announcement. He called Mr. Korhonen after UPM had internally decided to follow the increase, but before it issued the announcement publicly. Mr. Tynkkynen was unable to reach Mr. Korhonen, but left him a voicemail message notifying him of the increase and stating that UPM was going to follow. SENA, along with two other paper manufacturers — Sappi and IP — also followed MeadWestvaco’s price increase.

The next price increase occurred in February 2003, when IP announced that it was raising prices on coated, grade 5 paper. On February 10, 2003, the day that IP issued its price increase announcement, Mr. Tynkkynen had an internal meeting with Heikki Malinen, Kevin Lyden, and Hans Sohlstrom, in which they decided that UPM would issue a matching announcement. UPM began calling its customers that day to inform them of the pending price increase.

The following day, on February 11, 2003, while Mr. Tynkkynen was visiting UPM’s Blandin Mill, he received a message that Mr. Korhonen had called. Later that afternoon, Mr. Tynkkynen returned Mr. Korhonen’s call. Mr. Tynkkynen has little memory about the conversation, but to the best of his recollection, there were two topics of discussion: a union vote at UPM’s Blandin Mill and IP’s price increase. Mr. Korhonen told Mr. Tynkkynen that SENA was following the increase. Mr. Tynkkynen responded by indicating the UPM had already issued an announcement. That day, both UPM and SENA issued letters announcing the planned price increase. Norske Skog North America and Madison-Myllykoski issued similar announcements on February 12 and 13, respectively.

Stora’s argument was that, though Korhonen’s actions violated Stora’s anti-trust policy, the U.S. government could not prove there was an agreement or conspiracy to fix prices. Although the jury apparently agreed and quickly acquitted Stora, civil antitrust litigation has not been resolved.

Coated Paper Prices: Headed for a Crash?

If you think prices for coated paper have declined a lot recently, hang on to your hats. A bigger drop may be just around the corner.

Admittedly, the industry has done fairly well managing capacity through the current perfect storm of high inventories, economic recession, strong dollar, and the shift to digital media.

Mills have been more disciplined than in past downturns about taking downtime rather than chasing business with lower prices., limiting the declines to only $5 to $7 per hundredweight since last year's peak.

But the issue is permanent closures, not downtime, as John Maine of RISI explains in a recent analysis: “North American coated paper producers need to shut another 1.3 million tons of capacity permanently and immediately, followed by further shuts over the course of the next five years if they want to balance supply with demand,” he wrote. The continent’s coated mills can make about 9 million tons of paper annually, split about 50-50 between groundwood (mechanical) and freesheet products.

“Most of the high-cost, inefficient mills have already been closed, so the next wave of closures is going to involve larger, more efficient mills that are still generating a positive cash flow,” continues Maine.

The problem is that mills are not shut down by the industry, they are closed by individual paper companies seeking to maximize their owners’ return on investment. What paper company will volunteer to shutter cash-positive mills or machines? Not AbitibiBowater (aka AbitibiUnderwater), which is trying to stave off bankruptcy. Not Verso, North America’s #2 coated producer, which is also stuck in Penny Stock Land.

Maine points to the more “nimble” uncoated-freesheet market, where giants like Domtar and International Paper have implemented massive capacity cuts to prevent prices from crashing. What he doesn’t point out is that the big players in that industry tend to be low-cost producers, which means that smaller players trying to buck the oligopoly with a price war soon find themselves up Chapter 11 Creek without a paddle.

In the coated-groundwood market, by contrast, size doesn’t seem to matter. The best cost position these days is to be making product in Canada with machines that coat and calender in line. Medium-sized Kruger and single-machine Catalyst Paper fit that bill.

The market’s two big players, NewPage and Verso, make all of their coated groundwood in the U.S. with blade coaters and offline calenders – probably with higher costs than some single-machine companies like Domtar and Evergreen Packaging.

NewPage has demonstrated its willingness to keep the market in balance by shutting high-cost mills and machines, but how much stomach does it have for shutting even more (and more efficient) machines? Recent reports of its making uncoated freesheet and an SCB-type product on coated machines suggest its capacity-rationalization plan is complete.

The paper industry has been through down cycles before, often snapping back with rapid price increases once the economy causes demand to recover. Prices may indeed stabilize – even increase -- in a few months when the current inventory overhang is burned off and we enter the busier fall season, especially if the economy improves or energy costs rise. But that’s likely to be what Wall Street calls a “dead cat bounce” – a brief increase on the way to further declines.

“There will be some recovery in demand once the recession is over, but our best forecast indicates that demand will stay far below its pre-recession level and that demand will continue on a structural decline for the next five years,” Maine writes. Translation: Domino, Best Life, Teen People, etc. aren’t coming to life, and retailers like Circuit City and Linens 'n Things won’t magically re-emerge from bankruptcy to start printing more newspaper inserts.

There will be too many coated mills fighting over too little (and declining) demand, with European manufacturers jumping into the fray more as long as the dollar stays strong versus the euro. Even a meeting at a Chicago hotel to discuss “price leadership,” as UPM and Stora executives tried in 2002, won’t rescue this market.

Debt-laden mills will continue running as long as they are cash positive (not necessarily profitable). That will force prices down until the highest-cost machines are no longer cash positive and have to be shuttered. But continuing drops in demand will eventually force even more mills to close.

Manufacturers will try to cope by making uncoated papers on their machines, either on an ad-hoc basis or via permanent conversions. They will diversify more into bio-energy, such as wood-derived ethanol and wood-burning power generation. After all, public opinion and public policy consider it “green” to cut trees for energy (witness the new tax credit for wood-burning stoves) but un-green to cut the same trees to make pulp and paper.

Some makers of coated paper will survive, perhaps even thrive. But the industry will be transformed.

Happy St. Patrick's Day, Color Geeks!

I'm not much of a "linker", preferring to focus my efforts on original content, but I couldn't resist the item above from Gordon Pritchard's excellent Quality in Print blog (http://qualityinprint.blogspot.com/).

For the unitiated, the numbers represent shades of green as expressed in four different color spaces -- 1) RGB (the primary additive colors red, green, and blue) that is used for computer monitors; 2) CMYK (the primary subtractive colors cyan, magenta, and yellow, with the "K" standing for black) which are the inks used in four-color printing; 3) PMS (Pantone Match System) used for custom inks; 4) The CIE L*a*b* system often used to describe the lightness and shade of paper.

Gordo has a knack for creating images and even animations that make concepts like FM (stochastic) screening, elliptical dots, and optical brightening agents easy to understand.

Heavier Paper Can Save Money

Thanks to the U.S. Postal Service, low fuel prices, and the depressed paper market, publishers should take another look at using heavier paper.

Conventional wisdom in the magazine industry (and the catalog industry as well) says that decreasing the basis weight of the paper will decrease costs. But it’s not always true, and it’s becoming even less true.

Freight rates, especially fuel surcharges, have dropped drastically since last summer’s peak oil prices. Most Periodicals mailers will pay less for weight when postal rates increase in May. And the softening paper market will tend to make heavier basis weights more efficient than when paper prices are high.

Consider the case of switching from 34# lightweight coated (LWC) to 36#, which is typically priced $3 per hundredweight lower, or 38# LWC, which is another $3 lower. When 34# prices peaked at about $56/cwt. last year, that meant 36# was at $53 and 38# at $50. Although the heavier weights require more paper, products shipped via inexpensive ground freight (for example, newsstand copies, newspaper inserts, and in-store promotions) had virtually the same or even lower costs (paper and freight combined) at any of those three basis weights.

Mailed copies were a different story. With dropshipped Periodicals mailers paying something like 29 cents per pound in postage and freight last summer, going from 34# to 38# would increase combined paper and distribution costs by 3% to 4%. At today’s freight and paper prices, that gap has closed by a percentage point or two.

Now consider how things will look in a few months, when LWC prices may be $11/cwt. below last year's peak: At an average distribution cost of 15 cents per pound, switching from 34# to 38# would cost nothing. With combined postage and freight costs for dropshipped Periodicals mail down to about 24 cents and newsstand freight at about 7 cents, some publishers with substantial newsstand draws may actually save money by increasing basis weight. (Or they may find their paper suppliers willing to discount 34# more than 38#.)

This knowledge can become especially powerful when considering a move to a less expensive paper grade. Suppose, for example, that a magazine using 45# #4 wants to reduce costs and counter perceptions that its issues are too thin. It could bulk up the book and probably save money by switching to 50# #5.

Or suppose it is considering a money-saving move from LWC to SCA (supercalendered) but is concerned about the latter’s low bulk or opacity. It could counter those drawbacks, and still save money, by switching to heavier SCA.

Here’s another reason to get a handle on how changing basis weight would affect your costs: the euro. With their own currency doing a nosedive and their home market oversupplied, European mills are once again casting longing glances at the U.S. market. But the basis weights from European mills don’t match those of North America exactly. So when a European mill proposes a price on 57 gsm (38.5#) paper, you cannot compare that to a 38# price from a North American mill without knowing how the slightly heavier paper affects your distribution costs.

What about the environmental impact of heavier paper? Some people use a simple rule of thumb that lighter is better because it uses fewer trees, but that is not always true. Lighter groundwood papers often have a higher proportion of chemical (kraft) pulp than heavier papers, and it’s harder to use recycled content in lightweight papers. Increasing basis weight while lowering the grade may make your paper greener if it reduces the bleach, kraft, and energy required to produce the paper.

Standard-class mailers, such as catalogs, face a far different situation than do Periodicals mailers. Below 3.3 ounces, they pay no weight-based postage, but above that they will generally pay more than 40 cents per pound when the new rates take effect in May. That means they can save money by switching a thin flyer from 34# to 38# but would see costs increase significantly if they did that with a full-sized catalog.

But Periodicals and Standard mailers also have something in common: Cataloguers often use heavier paper on newspaper inserts than on copies of the same piece that are mailed, just as some large-circulation magazines start printing their newsstand copies on heavy paper and then switch to a lower basis weight for their subscriber copies of the same issue.

If you would like a simple spreadsheet model for comparing the total cost (paper, freight, and postage) of paper at various basis weights and prices, drop me an email at dead.tree.edition@gmail.com. I can also offer a model for calculating the impact of the new Periodicals rates. I won’t charge you any money for the models as long as you join my LinkedIn network and promise (cross your heart and hope to die) to spread the word about Dead Tree Edition.

USPS: Clean Up the Byrd Droppings!

A West Virginia Congressman whose district benefits from U.S. Postal Service pork is trying to prevent the Postal Service from delivering only five days per week.

Rep. Nick Rahall and the other co-sponsors of the legislation have not suggested other ways for USPS to close its billion-dollar budget deficit. But here's one for you, Congressman: Shut down some of the Postal Service's superfluous mail-handling facilities in West Virginia, including the four in your district.

Having the small state fragmented among 11 Sectional Center Facilities (SCFs) is inefficient for the Postal Service, costly for mailers, and leads to slow delivery for West Virginians.

USPS has about 450 SCFs (an average of one per Congressional district), each of which handles mail for one or more 3-digit ZIP code areas. About one-fourth of those SCFs are also Area Distribution Centers, meaning they can handle mail for several nearby SCFs. Commercial mailers generally try to create SCF pallets of at least 500 pounds and dropship to the SCFs when postal discounts make that worthwhile. Periodicals mailers can also obtain somewhat smaller discounts for ADC pallets and for dropshipping to ADCs instead of SCFs.

A Dead Tree Edition analysis indicates that the Lewisburg, WV SCF in Rahall's district has less than one-tenth the mail volume of the average SCF. For nationwide mailings, that means only the largest -- those with at least 2 million pounds -- have enough volume to create a Lewisburg SCF pallet. The other three SCFs in Rahall's southern West Virginia district (home of the Hatfields, McCoys, and Martha Stewart's prison cell) are also much smaller than average.

Mailstreams of less than 200,000 pounds even have trouble creating ADC pallets for the state's two ADCs, which together serve about half the population of an average ADC. That means much of the mail going to West Virginia is packaged in sacks instead of on pallets, which is expensive for both mailers and the Postal Service, as well as delaying delivery. Having the mail fragmented among so many facilities prevents any one location from having the critical mass needed to use the most efficient automated mail-sorting equipment.

Adding to the costs and the delivery delays are the fact that even the largest mailers tend to avoid dropshipping to any West Virginia postal facility. The volumes for each facility are so small that the dropship discounts are not enough to cover the freight costs. Standard-class mail for West Virginia tends to be dropped at Bulk Mail Centers (BMCs) outside the state, gaining the mailers at least some dropship discount.

But Periodicals mailers, lacking a meaningful BMC discount, simply enter the mail at the printing plant, often a thousand or more miles away from West Virginia. They lose any dropship discounts, and the Postal Service has to ship the publications to West Virginia itself. That typically delays delivery by at least several days.

West Virginia's rugged terrain is no excuse for having so many processing centers. Consider that mountainous Idaho has more than three times West Virginia's land area and nearly the same population yet only one ADC and three other SCFs. New Mexico and Colorado are each four times larger and have more people than West Virginia, yet each has only one ADC.

Why does West Virginia have far more Postal Service facilities handling mail than is justified by its population or land area? Could it possibly have anything to do with the state being represented by the Prince of Pork, Sen. Robert C. Byrd, who has the most seniority in the Senate as well as being its only ex-Klansman?

Before postal reform gave USPS more independence from Congressional control, powerful Congressmen could get key postal facilities placed in their districts rather than where the Postal Service needed them. That's probably why Winchester, Virginia, home of another powerful Senator Byrd, has its own superfluous SCF.

There hasn't been a Virginia Byrd in the Senate for more than two decades, but only this year did postal officials start the process of closing the Winchester Byrd dropping. (Dead Tree Edition predicted last year the shutdown of the Winchester SCF because of the new Flats Sequencing System.)

Let's hope it doesn't take the Postal Service so long to slaughter some of its pork in West Virginia.