More Mail on Saturday? There's a Reason for That

If you think your mailbox is fuller on Saturdays than it used to be, it’s not your imagination.

During the past year, the U.S. Postal Service made operational challenges that cause some letters to be delivered on Saturday even though they don't have to be delivered until the following week.

“When feasible, based on local operating conditions, the Postal Service advances Standard Mail [letters] scheduled for Monday and Tuesday delivery into a processing window that enables delivery on Saturday, which is generally the lightest delivery day of the week,” the USPS told the Postal Regulatory Commission yesterday (PDF, page 5).

“This practice balances the processing and delivery workload for Monday, which is generally the heaviest delivery day of the week.” Postal officials were responding to a question about how they managed to improve on-time delivery for Standard Mail during FY2016.

Last year, the Postal Service delivered more than 55 billion Standard letters, which generally are mass solicitations sent by businesses and other organizations. (The growing category is often called junk mail --but not by the Postal Service.) Standard letters have lower postage rates than do First Class letters, partly because First Class enjoys more expedited delivery.

Related articles:

• USPS Backing Down on Saturday Mail Delivery
• Discover-ed: How Direct Mail Competes With Digital Marketing Channels 
• Report Predicts Major USPS Downsizing - But Is It on Target? 

 

USPS Backing Down on Saturday Mail Delivery

Postal officials are ready to raise the white flag in their six-year battle to end Saturday delivery of letters and flat mail.

Postal-reform legislation with broad-based support is gradually taking shape in Congress, Deputy Postmaster General Ron Stroman told last week's meeting of the Mailers Technical Advisory Council (MTAC), according to PostCom Bulletin.

"In response to question as to what the USPS has compromised on in the legislative discussions with its stakeholders, Stroman said that 5-day delivery was one of the things the USPS dropped and that other things that used to be on its list are no longer there," said the bulletin, which is only available to members of the multi-industry Association for Postal Commerce (PostCom).

Congress members made it clear that getting approval for five-day delivery was "a politically difficult hurdle to overcome," the Bulletin quoted Stroman as saying. Postal officials dropped their Saturday plan in hopes of getting what they really need from Congress -- reform of so-called "prefunding" of retiree health benefits and of postal pensions.

In March 2010, the U.S. Postal Service released its Action Plan for the Future that called for ending Saturday deliveries, along with several other changes intended to prevent the agency from going bankrupt. Dropping Saturday deliveries would add $2 billion annually to the USPS's bottom line, postal officials claimed, though critics charged it was underestimating potential revenue losses.

Responding to concerns about delivery delays for critical items like mail-order pharmaceuticals, postal officials relented and said package delivery would continue on Saturdays. But Congress still didn't bite and continued to include a six-day delivery requirement in its annual budget.

The boom in e-commerce-related mail, including Sunday delivery of Amazon packages, has made curtailment of Saturday delivery an even harder sell. 

Related articles:

• Donahoe Signals Change of Heart on Weekend Deliveries 
• 5 Myths of Saturday Mail Delivery
• It's Time for Postal Unions and Mailers To 'KISS' on USPS Reform

Few Postal Jobs Will Be Cut in 2016

Don't look for any major downsizing from the U.S. Postal Service during the coming year: A new report indicates the postal workforce will remain stable through late 2016.

The agency is projecting a 0.6% decrease in work hours during Fiscal Year 2016, according to an annual financial plan it released Friday. That suggests this will be the third consecutive year of virtually no change in the size of the workforce, after a three-year period (2010-2013) in which the service shed one-sixth of its career employees. Work hours and the number of employees actually inched up during FY2015.

The financial report says that Phase II of Network Rationalization (the politically sensitive closing of mail-processing centers) and a 2.1% decrease in mail volume will make the slight cuts in workhours possible.

“These savings are forecasted to be partially offset by increases in training hours, growth initiatives and the impact of an additional delivery day for Leap Year,” the report says.

A change of plans
The Postal Service released a five-year plan in April 2013 that called for cutting 92,000 career employees by September 2017, then almost immediately put the brakes on more than a decade of downsizing: Since that report was released, the career workforce has hardly budged, ending FY 2015 at 492,000.

That 2013 plan projected many of the cuts would come from curtailing Saturday deliveries, but that proposal has apparently been abandoned. Five-day delivery isn’t even mentioned in the FY2016 financial plan.

“The continued growth in the number of packages -- which are much more labor-intensive than letters – and the ever-growing number of delivery points, make it increasingly difficult to capture work hour savings,” says the FY2016 plan. “We will continue to innovate to drive efficiency.”

Assuming that the 4.3% exigent surcharge on most postal rates will be eliminated early next year, the plan projects a revenue increase of only $400 million, to $69.3 billion. With an estimated $1.5 billion in additional expenses, that would mean an operating loss of $100 million. (Politicians and the news media will call it a $5.9 billion loss because they will include the supposed prepayment of retiree health benefits that postal officials wisely refuse to pay).

Other articles on the Postal Service workforce include:

• USPS Struggles With Wave of New Hires
• Why Letter Carriers Are Not an Endangered Species
• Prospects Dim for USPS Early-Retirement Offer
• 10 Ways E-Commerce Is Reshaping the USPS

Donahoe Signals Change of Heart on Weekend Deliveries

Postmaster General Patrick Donahoe made a statement this week demonstrating that postal executives’ views about weekend delivery of packages have changed significantly in the past four years.

"The future will be a seven-day package world and a five-day mail world," a USA Today article quoted Donahoe as saying.

In 2010, the U.S. Postal Service released its “action plan for the future” that called for elimination of Saturday delivery, with no exceptions. But, responding to concerns about delayed deliveries of prescriptions and other vital parcels, postal officials acquiesced and changed their plan to include Saturday delivery of packages.

No one – not even the most ardent advocates of postal service or even the postal unions – was talking about adding Sunday delivery of any kind.

But in recent months, weekend delivery of parcels has gone from obligation to opportunity. The Postal Service is delivering Amazon packages in a growing number of urban markets. In San Francisco, it is testing same-day, seven-days-a-week delivery for multiple retailers and today added early-morning grocery deliveries to its test offerings in that city.

Donahoe’s comment to the newspaper suggests that the long-term plan is for Sunday to become just another day of delivery as far as parcels are concerned.

Why the change of heart?
Why are postal executives who wanted to eliminate a day of parcel delivery barely four years ago now trying to add a day?

They are seeing huge potential in the e-commerce boom, which is fueling rapid growth in business-to-residence deliveries. And they are recognizing where the much-maligned USPS has competitive advantages over its private competitors.

United Parcel Service, for example, is seeing 60+% annual growth in UPS SurePost, its low-priced option that turns packages over to the Postal Service for final delivery. FedEx’s SmartPost similarly relies on the Postal Service to for “the last mile” delivery to residential customers. Neither company can deliver to residential customers as efficiently as USPS can.

In a move to cut out those middlemen and grab more of the e-commerce dollars, the Postal Service recently reduced Priority Mail parcel rates for big mailers by as much as 55%.

Changes in its workforce have also enabled USPS to reduce its delivery costs. The average hourly rate for the city-carrier force, for example, dropped 5% in the past year as the Postal Service increasingly relied on city carrier assistants (CCAs) and other non-career employees. The agency plans to have only CCAs delivering groceries in the San Francisco test.

What’s also changing is the Postal Service’s strategic focus. The same electronic media that are cutting into USPS’s traditional bread and butter – delivering letters – are also creating profitable growth opportunities in the package business. That’s why it wants to give short shrift to traditional mail while expanding service in the package realm.

Unlike letter delivery, USPS doesn’t have a monopoly in the parcel world. But its massive delivery network and unique ability to reach every address in the country every day of the week may give it a virtual monopoly in certain types of package delivery.

Related articles:

• Frenemies: The Love-Hate Relationship Between UPS and the Postal Service Blossoms
• Third Bush on the Right, Please: USPS Grocery Deliveries Would Need Lots of TLC from Carriers
• How USPS Could Bypass Congress on Saturday Delivery

 

What's Weighing Down the Postal Service?

The internet and the economic downturn have not been kind to the nation's postal system, but it's also been burdened by problems that were, and are, completely avoidable.

I, and other postal commentators, have spilled a lot of ink (and pixels) explaining how billions of dollars have been needlessly taken from the U.S. Postal Service to overfund its pension and retiree health benefits. The chart above from Rafe Morrissey of the Greeting Card Association shows clearly that USPS's payments are way out of line with what's typical for government agencies.

"Both funding levels are substantial financial strains . . . and do not allow for fair competition in the marketplace," says the slide, which is taken from a free webinar that Morrissey is presenting tomorrow (Oct. 9, 2013, 2 p.m. Eastern, 8 a.m. Hawaiian) called "A commonsense solution to the postal service's budget crisis."

Morrissey, the GCA's Vice President of Postal Affairs, will present the association's plan for reviving the Postal Service, which advocates nationwide implementation of cluster boxes and adopting a host of other changes while preserving Saturday delivery and avoiding above-inflation rate increases.

For more information on the Postal Service's pension overpayments and "prefunding" of retiree health benefits, see Congress Hears the Truth About Postal Service Finances, which describes the USPS Inspector General's rather forthright Congressional testimony on the subject.

Mailers Rallying Against Rumored 10% Postage Hike

Mailing-industry leaders fear that the U.S. Postal Service is on the verge of requesting emergency rate increases of up to 10%.

After lying dormant for a couple of years, the multi-industry Affordable Mail Alliance was reorganized on Friday to fend off expected "exigent" (higher than inflation) rate increases for the ailing Postal Service. The group started rallying mailers today to contact members of the USPS Board of Governors, which is rumored to be discussing such rate increases when it meets next week.

The alliance was formed in 2010 when USPS sought to solve its financial problems by sidestepping the inflation-based cap on rate increases for First-Class, Standard, and Periodicals mail. That attempt failed, but this time the Postal Service is in more dire circumstances, perhaps only months from running out of cash.

When the Board of Governors backed down in April from a money-saving plan to curtail Saturday delivery, it asked postal management to examine options for increasing revenue. It specifically mentioned the possibility of exigent increases, especially for supposedly unprofitable classes like Standard flats and Periodicals.

One scenario being discussed among mailers is an exigent increase of 5% to 7% for all market-dominant classes plus an additional 3% for the unprofitable classes. That's on top of the usual inflation-based increase, which could be close to 2% in January.

Annual rate hikes for the market-dominant classes are generally capped by changes in the Consumer Price Index. But the law also has a provision “whereby rates may be adjusted on an expedited basis due to either extraordinary or exceptional circumstances.”

The law, however, does not provide the Postal Regulatory Commission clear guidelines as to what constitutes "extraordinary or exceptional circumstances" justifying a special rate hike.

Mailers have questioned whether exigent rate increases would actually backfire by shaking confidence in USPS and the stability of postage rates, which would accelerate the shift to other media.

In a related matter, the PRC today rejected the Postal Service's proposal to use a one-time "Technology Credit"to justify rate increases, a gambit described in New Postal Incentive Could Backfire for Mailers.

Related articles:

• Publishers May Pay To Preserve Saturday Delivery  
• PRC Decision Only a Partial Win for Mailers  
• Affordable Postage A Key To Printing Industry's Future, Quadracci Says  
• Greece Is the Word for USPS, Donahoe Says

Publishers May Pay To Preserve Saturday Delivery

Publishers and other mailers celebrating today’s news that Saturday mail delivery will be continued should take another look at the announcement’s ominous words.

“The Board has also asked management to evaluate further options to increase revenue, including an exigent rate increase to raise revenues across current Postal Service product categories and products not currently covering their costs,” today's statement from the U.S. Postal Service’s Board of Governors said.

Translated from Beltway Babble into plain English: The board wants to hit Periodicals publishers and mailers of Standard-class flat mail, such as catalogs, with an extra rate hike. Increases in most postal rates are limited to the inflation rate, but in emergencies USPS can seek “exigent” rate hikes.

USPS estimated its plan to end most Saturday deliveries would have added $2 billion annually to its beleaguered bottom line. Now the governors are looking for other ways to get that money, and instead of an across-the-board increase they’re suggesting that the hikes be targeted at allegedly unprofitable mail.

Despite extensive downsizing by the Postal Service and better preparation of catalogs and magazines by mailers, USPS claims its costs of handling flat mail have risen rapidly in recent years. Some postal experts blame USPS’s cost-accounting system, which tends to allocate the costs of “automation refugees” and other inefficiencies to the Periodicals class and to Standard flats.

Adding insult to injury, the $1.3 billion investment in the Flats Sequencing System (FSS) – which was supposed to revolutionize the handling of such mail – so far is costing more money than it is saving.

USPS claims the Periodicals class (magazines and newspapers) pays only 72% of its costs, meaning that a 39% rate hike would be needed to bring the class to theoretical breakeven. For “Standard flats” – the portion of Standard-class flat mail not in carrier-route bundles – the increase would be 24%. The most efficient Standard mailers would be largely shielded from an exigent rate hike because most of their mail is in carrier-route bundles.

Here’s some background information on the relevant postal issues:

• USPS's plan to end Saturday delivery for all mail except parcels: 5 Myths of Saturday Mail Delivery
• Exigent rate increases: PRC Decision Only a Partial Win for Mailers
• Questionable cost accounting for Periodicals and Standard mail: Increased Efficiency Led to Higher Periodicals and Catalog Costs, Goldway Says
• Automation refugees: For Periodicals, The Postal Service’s Math Doesn’t Add Up
• FSS Problems: USPS Admits FSS Is Losing Money 
• The "Washington Monument" Strategy: Do Postal Execs Want To Lose Money on Periodicals?

5 Myths of Saturday Mail Delivery

Misunderstandings abound regarding the U.S. Postal Service’s proposal to end Saturday delivery of all mail except parcels later this year. Here some of the most common myths:

1) Congress recently put a stop to the plan. That’s the story told by the news media, Congress, and the Government Accountability Office, but it’s not necessarily true. Congress did indeed put the requirement to continue six-day mail delivery into a recently approved appropriations bill. But the USPS’s Office of Inspector General says that if the Postal Service merely refuses the pittance in such appropriations (which are mostly for free mail for the blind), it would not be blocked from ending Saturday delivery. And it’s not even clear whether USPS’s plan – which would continue Saturday delivery of certain types of mail – would violate the legislation.

2) Ending Saturday delivery would save USPS $2 billion per year. Even the Postal Service talks about $2 billion in savings, but in reality its position is that its profitability (cost savings minus lost revenue) would grow by $2 billion. The calculations have been subject to debate and competing interpretations, partly because of different assumptions about how much business would be lost. Also, the $2 billion estimate was for full cessation of Saturday delivery, not for the latest plan to have mostly non-career employees delivering profitable parcels on Saturday.

3) The loss of customers would hurt the Postal Service. Actually, it could be a blessing. The customers who care most about Saturday delivery are daily newspapers and certain weekly publications; few other mailers care so much about getting delivery on a specific day of the week. Newspapers may be USPS’s most unprofitable product because they are often inefficiently prepared for mailing, can be difficult to sort, and sometimes get special treatment. Even highly presorted and dropshipped weekly magazines – though not as unprofitable as USPS alleges – are no big money maker. And most will survive without Saturday delivery.

4) Letter carriers oppose ending Saturday delivery. Yes, the main carrier’s union, the National Association of Letter Carriers, is vehemently opposed to the Postal Service’s plan. But many rank-and-file carriers would be happy to get Saturdays off. The NALC is “fighting a battle the majority of its members do not want,” writes Tom Wakefield, a city carrier and NALC member who runs PostalMag.com.“Five-day would be such a benefit to letter carriers. Today, because of shortages of letter carriers in many districts, many, many carriers are being mandated to work on their days off against their wishes, often with less than 24 hours notice,” adds Wakefield, mirroring frequent comments by rank-and-file carriers to Dead Tree Edition and other sites. “Today, the ‘daily grind’ is stretched to six days, with a Sunday off and one day during the week for many carriers. Five-day would allow two days off in a row and the daily grind would only be five days.” Many carriers are also hoping that five-day delivery would cause USPS to thin its carrier ranks by offering retirement incentives.

5) Ending Saturday delivery is the key to saving the Postal Service. No one who has looked at USPS’s finances believes five-day delivery is a cure-all, regardless of their position on the Postal Service’s plan. Because of declining mail volumes, $2 billion alone is not enough turn around the Postal Service even if the accounting games with postal pensions and “pre-funded” retiree benefits are corrected. More cost cuts or, less likely, significant new revenue sources are needed to keep USPS afloat.

Related articles:

• The Law Is On Donahoe's Side Regarding Saturday Delivery 
• How USPS Could Bypass Congress on Saturday Delivery  
• Is the Postal Service Really Broke?  
• Do Postal Execs Want To Lose Money on Periodicals?

Postal Workforce Is Both Shrinking and Growing

The U.S. Postal Service added more than 4,000 jobs in February, but the postal workforce is actually shrinking.

USPS’s payroll had 607,600 people in February, up 4,600 from January, according to data released by the federal Bureau of Labor Statistics on Friday.

“The US Postal Service continues to lose money as it is bleeding cash,” responded Jon C. Ogg of 24/7 Wall St. “So can someone please manage to explain how the USPS added jobs at a time that Saturdays are being dumped for delivery days?”

Yes, I can explain: USPS hired the newbies to take up the slack from a massive wave of retirements. And perhaps to save money.

The Postal Service reports that it had 468,000 full-time employees in late

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

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

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

Chances of Postal Reform This Year: Slim and None

The chances for meaningful postal reform this year are slim if neither political party gets a mandate from Congressional elections – and none if one party wins control of both houses.

That’s the consensus of several postal experts who have spoken or written recently about the status of postal legislation.

“If the Republicans get a majority in the Senate and hold their majority in the House, nothing will happen until 2013,” Jim O’Brien, Vice President, Distribution & Postal Affairs for Time Inc., told a mailers' focus group meeting last week. “If the Democrats hold the Senate majority and the Republicans hold the House, MAYBE something could happen in the lame duck session. If the Dems win the House and Senate, nothing will happen until 2013.”

During the post-election lame-duck session, the House is likely to approve postal legislation “that moves closer to the Senate version,” Ken Garner and Benjamin Cooper predicted a few days ago at the huge GraphExpo trade show for the printing industry. (If you’re wondering why postal issues are being discussed at a printing event, Garner, President/CEO, Mailing & Fulfillment Service Association, and Cooper, a prominent postal lobbyist, offered this factoid,: “Over one half of all print [in the U.S.] is created for mail distribution.”)

Five-Day Delivery and Reduced USPS Service Standards Could Face Legal Barrier

The U.S. Postal Service’s plans to eliminate Saturday delivery and to lower its delivery standards could face a significant legal obstacle, according to the Postal Regulatory Commission.

In its advisory opinion last week on USPS’s plan to close nearly half of its mail-processing centers, the commission seemed to side with witnesses who said reducing service standards could run afoul of the Congressionally-imposed price cap on postal rates.

“Two expert witnesses . . . presented persuasive testimony that a relationship exists between price and quality, and that lowering quality is equivalent to raising the price,” wrote Chairman Ruth Goldway in an addendum to the PRC’s document.

Under USPS’s Network Rationalization plan, “Eighty percent of all First-Class Mail . . . will be delayed by at least one day,” Goldway wrote. “Much of 2-day mail will become 3-day mail. Rural and remote communities that already receive slower delivery may be impacted even further when weekend and holiday delays are factored in.”

Hurry It Up, Key Senator Tells Postal Regulatory Commission

Chastizing the Postal Regulatory Commission for taking 12 months to issue an opinion on ending Saturday delivery, Sen. Thomas Carper (D-DE) is asking the panel to work faster on other proposals to streamline the U.S. Postal Service.

"At a time when the Postal Service is reporting losses of$25 million a day and is doing all it can to head off financial collapse, there is a clear need for postal management to take a number of steps to streamline operations and adjust the Postal Service's network and product offerings to reflect the changing demand for hard-copy mail," Carper wrote in a letter dated yesterday.

Carper, co-sponsor of the Senate's main postal-reform legislation, said the PRC's advisory opinions "have been of great value to the Postal Service, Congress, and postal customers." But he expressed concern about the "lengthy, courtroom-style process" the commission has used in developing such reports.

The PRC's split decision on five-day delivery "suffered from a lack of focus on the key issues that I believe needed examination during the debate about moving to five-day service," Carper wrote. He recommended that the panel set time limits on its consideration of USPS's proposed changes to service levels.

A drawn-out process for considering such changes would "run the risk that the Postal Service could be forced to act on its proposal before the Commission has had a chance to share its thoughts and findings," Carper wrote. That could result in USPS making "serious mistakes in implementing a service change that might have been avoided had postal managers had the benefit of the Commission's counsel."

Related articles:

• Divided PRC Presents Its Opinion on Saturday Delivery  
• 5-Day Delivery: Maybe the PRC's Decision Is In the Mail  
• Postal Watchdogs Trying to Unleash USPS Innovation

Burrus Responds: Not Giving Up on 6-Day Delivery

Long-time postal union leader William Burrus objected today to a Dead Tree Edition article that indicated he might be giving up on trying to preserve Saturday delivery.

Burrus' blog post, Pick Your Fight, was clearly a response to my article Sunday called Throwing in the Towel on 5-Day Delivery?. In the interest of fairness, Dead Tree Edition is republishing his entire commentary below, along with some comments [in brackets].

One of the web sites that focuses on postal issues [that would be Dead Tree Edition] recently suggests that I favor "throwing in the towel" on 5 day delivery by supporting the Obama plan for postal reform. [The "throwing in the towel" phrase was in a rhetorical question, not a statement.] This analysis misinterprets my suggested course for addressing the USPS’ dilemma. The choices offered in this political struggle are:

1. Issa/Ross - Carper/McCain

a. A Republican controlled House and

b. A Democratic Chairman in the Senate who accepts the GAO report [which says the federal government didn't overcharge the U.S. Postal Service for pensions, contrary to most expert views]

2. Obama proposal that includes 5 day delivery

3. HR 1351 which has major obstacles in the House and Senate. The path to passage would require a miracle and even then you would be only half way there, requiring Senate confirmation

Each of these options is unacceptable in their present form but the Obama fight is much more targeted and would be among friends

I do not suggest "throwing in the towel on 5 day delivery” but settling on a specific target and directing all the guns in one direction. It gives you a better chance of hitting something you want to eat. [I think he's saying that the Obama plan, though flawed, is the best hope for stopping the Issa/Ross "FEATPO" (Fire Everyone at the Post Office) plan; stopping five-day delivery is a future battle.]

And to the blogger [not I] who continues to write about the timing of my retirement, I suggest that when he reaches 53 years of service at the age of 75 he will be qualified to question my decision. [That may refer to an anonymous commenter on the "throwing in the towel" article who said, "I loved that Burris (sic) retires before the most critical time in APWU history since 1970" and added, "He knew it was crunch time and he got off the ship first like a rat or cowardly captain of the ship." My question to Anonymous: If Burrus was supposed to wait until APWU and USPS were not in crisis, how old would he be upon retirement?]

Throwing in the Towel on 5-Day Delivery?

At the end of a lengthy analysis of the prospects for postal legislation yesterday, long-time postal union leader William Burrus made a statement that could signal a change in strategy on five-day delivery:

"His [President Obama's] proposal includes 5 day delivery which is strongly opposed by the unions but the decision must be made on which fights to engage in and with whom. Do we fight the Republican efforts to destroy the Postal Service and the unions or do we fight the Obama inclusion of 5 day delivery. This is a legislative and executive decision but it is time to decide and serious consideration must be given to the results if you don't prevail. In American Politics you can be right and lose."

Burrus has retired from the presidency of the American Postal Workers Union (APWU) but still has plenty of connections in and knowledge of Washington's ways. Dead Tree Edition has questioned his rhetoric and math at times (See Mathematically Challenged: Burrus Proposal Doesn’t Add Up for USPS and The Reinterpretation of William Burrus) but not his political savvy or inside information.

Burrus' statement suggests that the prospects are slim for getting the Obama Administration to change its mind on preserving Saturday delivery. Without an Obama push to counter the mostly anti-union Republicans, a labor-supported position has little hope for success these days.

Burrus seems to be suggesting that the postal unions save their powder for a more important and more winnable fights. Tops on the list is stopping the Issa/Ross bill that would put the U.S. Postal Service into something resembling Chapter 11 bankruptcy reorganization and potentially tear up the union contracts. Related battles are ending USPS's subsidies of the federal government that have pushed it to the verge of insolvency and opposing postal management's request to void the no-layoff clauses in union contracts.

Update: Burrus took offense at suggestions he may be "throwing in the towel" on preserving six-day delivery -- Burrus Responds: Not Giving Up on 6-Day Delivery.

Other articles on Obama's Postal Service proposals:

•  Obama Supports Postage Increase: Is He Dissing the Print Industry?
•  Please Mr. Postman, Look and See, If There's a Six-Pack in Your Bag For Me
•  Obama Hints At Changes To Postal Service Workforce

Why Are the Postal Service's Financial Problems Such a Surprise?

The U.S. Postal Service's financial problems have, of course, been big news lately, but they should hardly be a surprise.

It didn't take a genius to see this coming; here's what appeared in Dead Tree Edition almost two years ago:

"Although the Postal Service is on track to become insolvent within a couple of years, Congress has shown no appetite for wrestling with the problems that vex the USPS. The Postal Service's requests to stem the financial tide -- by eliminating Saturday delivery and eliminating the prepaid retiree-benefit requirement, for example -- will inevitably lead to a Congressional discussion of whether postal rates should be raised."

USPS is still trying to eliminate Saturday delivery and the prepaid retiree benefits. And recent Obama Administration support for a one-time higher-than-inflation-rate increase in postal rates (See Obama Supports Postage Increase: Is He Dissing the Print Industry?) means Congress is indeed likely to discuss raising postal rates.

That article from two years ago, by the way, was about the idea of letting the Postal Service conduct national lotteries as a profit-making venture. ("Look, Marge, I won a hundred Forever Stamps!") I haven't seen that idea come up in recent Congressional discussions. But it just might.

One good thing about all the political and mainstream-media attention being paid to the Postal Service's finances is that it's finally bringing to light how Congress has made a mess of the agency's finances.

Perhaps the best "ah-hah" MSM commentary was published yesterday by Bob Sullivan, a consumer-affairs reporter for MSNBC, in explaining that USPS is not looking for a bailout:

"In fact, it's the Postal Service that’s currently bailing out the U.S. government. Politicians have been raiding Postal Service revenues for years, using them to make the federal deficit appear smaller than it really is. The fiscal gyrations are so twisted that the Postal Service is right now forced to pre-pay health care benefits for employees the agency hasn't even hired yet — in fact, for many future employees who haven't even been born yet — all to artificially shrink the federal deficit. It's these crushing accounting tricks, not the cost of delivering mail, that has pushed this 200-year-old institution to the brink."

By the way, that's not much different -- but, frankly, better written -- than what Dead Tree Edition published in September 2009:

"The billions of dollars the Postal Service pre-pays every year into a retirement-benefits fund have nothing to do with retirees and everything to do with making the federal deficit look smaller. Congress is playing an accounting shell game, with the cost of the payments being passed along to mailers in the form of higher rates. That has made mailed products increasingly uncompetitive with such electronic substitutes as email and Web sites, leading to volume decreases and excess capacity in the postal system."

Related articles: How Congress Bankrupted the Postal Service in 3 Easy Steps and How USPS Could Bypass Congress on Saturday Delivery.

Obama Supports Postage Increase: Is He Dissing the Print Industry?

The Obama Administration proposed above-inflation increases in postage rates Monday, just a week after the Postal Service indicated it had backed off of just such a rate hike for fear of hurting the printing industry.

The President released a deficit-reduction plan that would "permit USPS to seek the modest one-time increase in postage rates it proposed a year ago."

A week earlier, Deputy Postmaster General Ron Stroman explained in an interview why the Postal Service had decided not to pursue such an "exigent" rate increase: "One of the things we have seen in ongoing discussions with the print industry is that the industry itself is functioning with very close profit margins. We have been very concerned that we not raise prices too high because you just drive people out of the business."

The USPS proposal a year ago, which was rejected by the Postal Regulatory Commission, had average rate hikes of 5.8% for the market-dominant classes of mail. But for Periodicals mailers the increases would have been in the 8% to 9% range.

The president's plan would also "give USPS the ability to better align the costs of postage with the costs of mail delivery while still operating within the current price cap." That may refer to postal executives' desire to impose the highest rate hikes on products on which USPS allegedly loses money, such as Standard flats (catalogs) and Periodicals mail.

The president's plan would also "reduce USPS operating costs by giving USPS authority, which it has said it will exercise, to reduce mail delivery from six days to five days." That's an about face on Saturday delivery: Just seven months earlier, Obama released a budget proposal that included the usual language about requiring six days of delivery and banning the closing of small post offices.

Related articles:

• So Much For Encouraging Publishers To Mail Efficiently . . .
• USPS Seeks Special January Rate Increases 
• USPS Will Not Seek Exigent Rate Increase

Divided PRC Presents Its Opinion on Saturday Delivery

A divided Postal Regulatory Commission just issued (early afternoon Eastern time) its advisory opinion on whether the U.S. Postal Service should be allowed to discontinue Saturday delivery.

After a complex analysis, each commissioner wrote a separate opinion suggesting that the commissioners agreed that USPS's projections regarding cost savings are too rosy. But they could not agree on whether it should be allowed to switch to five-day delivery.

While agreeing on many points, "we did not agree on the broader policy concerns arising from the Postal Service Proposal," wrote PRC Chairwoman Ruth Goldway.

The Postalnews Blog has more details.