Monday, February 25, 2013

Mainstream Media Miss: Postal Service Will NOT Sell Clothing

Contrary to many recent news reports, the U.S. Postal Service has no plans to get into the clothing business, a USPS official confirmed today.

Even reputable news organizations botched the announcement last Tuesday that the Postal Service has entered into a licensing agreement allowing a clothing company to sell the “Rain Heat & Snow brand of apparel and accessory products.”

“Strapped for cash and obviously desperate, the United States Postal Service is launching a new line of ‘smart apparel' — also known as wearable electronics," wrote The Atlantic, which also said USPS would "get into the outdoor gear business."

“The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores,” wrote Reuters, also confusing the words “licensing” and “selling”. Other reports (including commentaries from The Washington Times and the Boston Herald) completely missed the mark, questioning how the Postal Service could compete with private-enterprise apparel companies.

USPS quietly took down the press release from its web site a day or two after issuing it (I have reproduced it below), then issued the following statement to Dead Tree Edition today in response to a query:

Today's USPS statement
“To clarify a press release issued recently, the Postal Service is not entering

Thursday, February 21, 2013

My Heartfelt Apology to the Publishing Industry

Let me offer my deepest apologies to everyone who, like me, works in the magazine publishing industry. I’ve been committing an unpardonable sin without even knowing it.

From time to time when I wasn’t covering my usual obsessions – like the U.S. Postal Circus, black liquor tax credits, and greenwashing – I have actually written about and even opined about our industry, often focusing on major New York publishers. I thought somehow that having worked many years (too many years) in the industry and having the benefit of insights from a host of brilliant and well-informed insiders qualified me to speak about the business occasionally.

But I’ve discovered in the past few days that all wisdom about magazines emanates from the New York publishing elite. And I’ve learned about the unwritten rule that only members of that elite may pontificate about the publishing industry.

Rosie's salute to NY publishing
The revelations started last week with coverage of the proposed Meredith merger/takeover of most Time Inc. publications. Hick that I am, I saw real potential in the move. Meredith, a smart company that uses its strength in publications for women as a springboard into new ventures, would take on Time brands serving a similar audience.

How foolish of me! New York media reporters soon set me straight, pointing out that Meredith is based in Des Moines. Like, Iowa. Like, in the middle of The Flyover (which is how the Beautiful People refer to that cultural wasteland you

Friday, February 15, 2013

Affordable Postage A Key To Printing Industry's Future, Quadracci Says

U.S. printing prices have failed to keep pace with inflation during the past 25 years, the CEO of the country’s second largest printing company told a Senate panel this week.

“During that same time period, the price of postage has continued to increase and as a result the single largest expense of printing is now the postage associated with delivering the final product,” Joel Quadracci, Chairman, President & CEO of Quad/Graphics Inc., testified Wednesday during a Senate hearing on the “Crisis Facing the U.S. Postal Service.”

“Over the last 25 years, through technological advances and process changes resulting in productivity gains of more than 4% annually, the printing industry has been able to actually reduce the price for printing (adjusted for inflation),” Quadracci said. “The Postal Service should address its problems by achieving the same cost control success,” but instead it is saddled with “extreme excess costs.”

“If the Postal Service can manage its costs and maintain an affordable pricing structure, its business can remain sustainable and ours, in turn along with it.”

“There are three main components to printing a magazine, catalog, retail insert or direct mail piece: the cost of the physical printing of the item, paper and postage. It may be tempting to address the Postal Service’s financial situation by simply raising postage rates to “cover the costs,” but I cannot stress enough how damaging postal rate increases are to our industry,” he told the panel.

“There is a direct negative correlation between rate increases and volume. Our customers demand predictability and affordability and if prices

Saturday, February 9, 2013

USPS Admits FSS Is Losing Money

The U.S. Postal Service acknowledged this week that the Flats Sequencing System has increased the agency's operating costs.

On the same day it very publicly announced the planned cessation of most Saturday delivery, USPS released data confirming what Dead Tree Edition speculated about two weeks ago. (See So Far, FSS Is A Step Backward, USPS Data Indicate.) The data show that two of the three major types of mail processed on FSS machines – Standard (non-carrier-route) Flats and Periodicals – had experienced larger increases in processing costs the past two years than they had gained in delivery savings.

As in the case of the other major category, Standard carrier-route flats, FSS apparently caused the spikes in mail-processing costs, USPS documents added.

 “It appears that in FY 2012, FSS raised costs for these three products as compared with FY 2010 costs,” the agency said in responding to a Postal Regulatory Commission question. But the results don’t mean that the

Wednesday, February 6, 2013

The Law Is On Donahoe's Side Regarding Saturday Delivery

Postmaster General Patrick Donahoe confused both the news media and fuming Congress members today with his explanation of why Saturday mail service can be ended without Congressional approval. But he appears to be on solid ground legally. In fact, the case for the U.S. Postal Service making this move was laid out more than three years ago.

Here is Donahoe's somewhat cryptic statement at today's press conference on the legal question: "Is it legal? Yes it is. It is our opinion that the way that the law is set right now with the continuing resolution that we can make this change. The good news is that the continuing resolution that governs the Postal Service that way expires on the 27th of March, so there is plenty of time in there so if there is some disagreement we can get that resolved. I encourage Congress to take any language out that stops us from moving to this five-day mail schedule."

That was interpreted in some circles as meaning that Donahoe was basing his claim on the federal government not currently operating under an approved budget. But some reporters managed in the question-and-answer session to untangle, at least partially, Donahoe's case.

Bloomberg News, for example, reported that Donahoe "said the service decided it can ignore language, first placed in appropriations law in 1981, requiring it to deliver mail six days a week, because it receives its money from Congress differently than other U.S. agencies do."

Rep. Gerald Connolly, an influential Virginia Democrat, accused Donahoe

Sunday, February 3, 2013

What Happens If the Postal Service Runs Out of Cash?

The U.S. Postal Service’s cash crunch could cause a “catastrophic” disruption of mail service this year, according to a government official who wants USPS to reveal its crisis-management plans.

The Postal Regulatory Commission “should request a description of the Postal Service’s priorities and plans for providing service across the Nation and across classes in the event cash shortages require services to be reduced,” PRC staffer Kenneth E. Richardson told the commission Friday.

“Although the Postal Service survived FY 2012 without running out of cash to operate, continuing operations for a second year at such low cash levels . . . is risky, not only from a financial standpoint, but from the standpoint of potential service disruptions and the impact on mailers,” Richardson, a PRC public representative, wrote.

During four months of FY2013, Richardson noted, USPS projects it will have less than $1 billion of liquidity, which is four days of expenses. If actual results are only slightly below those projections, the Postal Service will lack “sufficient working capital to pay its employees and suppliers,” and “its ability to provide effective and regular postal services will be in jeopardy.”

Slim margin for error
USPS has acknowledged that its “margin for error is slim – a commercial