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

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

BOR-ing!

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

1) Cash Flow Management

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

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

Legal Eagle

2) Traffic Court Lawyers

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

3)  Let's Play Post Office!

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

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

4) Post Office – The Adult Edition

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

5) Fast Shredding System

Ready to shred

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

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

6) Management Consulting

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

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

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

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

Priority Male

7) Male Strippers

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

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

8) Dog Obedience Training

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

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

IMb

9) We-Deliver Obstetric Centers

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

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

For further reading:

• USPS Needs a Plan B for Flat Mail, Coalition Says 
• Nine Ways the Postal Service Is Not Like a Real Business
• 17 More Ways USPS Is Not Like a Real Business
• Ten Ways to Celebrate International Print Day

 

The U.S. Parcel -- uh, Postal -- Service Presents Its Wish List to Congress

The U.S. Postal Service presented a long wish list to Congress today, along with a subliminal message.

“Despite challenging marketplace conditions, an inflexible business model imposed by federal law and financial issues caused by legislative constraints, the Postal Service is moving forward with a lot of momentum,” Mickey D. Barnett and Postmaster General Pat Donahoe wrote in a joint letter appearing in the agency’s annual report to Congress.

Even in the report's only photo showing letters,
(Can you spot them?) packages take center stage.

Translation: “Hey, Congress, the Postal Service is scrambling to keep its head above water because you’ve created a helluva mess. Now could you get off your butts and do something more useful than naming post offices?”

Donahoe and Barnett can afford to be forthright. Donahoe is retiring Feb. 1, and Barnett’s term as chair of USPS’s Board of Governors expired earlier this month.

As for the subliminal message: The 84-page report has 14 photos featuring parcels, one that (barely) shows letters, and none depicting flat mail. Guess what postal officials think is the key to the agency’s future? After all, USPS’s parcel business grew 9% during Fiscal Year 2014, while revenue from other sources declined slightly.

Here's how the report spelled out “What’s Needed” from Congress:

The Postal Service is urging Congress to pass comprehensive postal legislation. Among the provisions we seek are those needed to ensure that the Postal Service is self-sustaining and financially strong as well as a reliable, low-cost partner to the American people and the communities it serves. These provisions include:

• Require within the Federal Employees Health Benefit Program a set of specific health care plans that would fully integrate with Medicare and virtually eliminate the retiree health benefits unfunded liability.
• Adjust the FERS [Federal Employee Retirement System] payment amount using Postal Service-specific demographic and salary growth assumptions and refund any existing surplus.
• Adjust delivery frequency (six-day packages/fiveday mail). 
• Streamline governance model and eliminate duplicative oversight.
• Provide authority to expand products and services.
• Require defined contribution retirement system for future Postal Service employees.
• Require arbitrators to consider the financial condition of the Postal Service.
• Reform Workers’ Compensation.
• Allow the Postal Service the right to appeal EEOC class action decisions to Federal Court.

The Postal Service continues to do its part within the bounds of existing law to place the organization in a favorable financial position, and we are proud of the achievements we have made to reduce costs while significantly growing our package business. Despite these efforts, however, we cannot return the Postal Service to profitability, nor can we secure our longterm financial outlook without the passage of comprehensive reform legislation.

The bottom line is that the Postal Service is ready to make the necessary changes to keep delivering for America. We just require the freedom to make it happen.

Postal Service Starts Fiscal Year With a Bang

Maybe it was the election. Maybe it was the economy. Maybe it was even a sign that an organization that was left for dead is bouncing back.

Whatever the reason, the U.S. Postal Service revealed today it had a bang-up October, with domestic mail volume up nearly 7% over the same month last year, rather than the 2% decrease USPS was expecting.

The beleaguered agency had "controllable operating income" of $647 million in the first month of Fiscal Year 2015, more than double what it budgeted or what it earned last October. Controllable operating income excludes what is euphemistically referred to as prepaid retiree health benefits, which USPS has stopped paying, and accounting adjustments for the future cost of workers compensation cases.

Big growth areas
Major mail categories with significant revenue increases over October 2013 included "Permit Imprint Nonprofit Standard" (43%), Parcel Select (30%), "Permit Imprint Regular Standard" (14%), and "Permit Imprint First-Class (7%), according to an in-depth financial report also released today. Even the Periodicals class was up a bit.

In the first month with aggressive parcel rates for large business mailers, volume for Shipping & Package Services rose 14% and revenue by 12%.

Despite the higher volumes, work hours increased by less than 2% and total expenses by less than 3%.

It will take more than one strong month, however, to get one of the country's largest employers out of the financial woods. USPS is frequently on the verge of running out of cash, and it has no ability to borrow money, even for such mission-critical needs as replacing its decrepit, inefficient delivery vehicles.

Related articles:

• Lower Pay Rates Are Boosting USPS's Finances 
• Frenemies: The Love-Hate Relationship Between UPS and the Postal Service  Blossoms 
• Discover-ed: How Direct Mail Competes With Digital Marketing Channels (Tidbit: When it comes to attracting new customers, email is no longer such a great alternative to real mail.) 

It's Time for Postal Unions and Mailers To 'KISS' on USPS Reform

The editorial below from “an anonymous PostCom board member” appeared in this week’s issue of PostCom Bulletin, the organization’s newsletter. I thought the insights about how to get postal reform moving and about the U.S. Postal Service's governing body were worth sharing with a wider audience, so I’m republishing it with the permission of PostCom.

A few explanations are in order: “FERS” and “CSRS” are the pension plans for postal employees. “RHBF” is the U.S. Postal Service’s Retiree Health Benefit Fund, which USPS must “prefund” (actually “overfund”) because of manipulative Congressional accounting. Congress Hears the Truth About Postal Service Finances explains how the federal government is milking USPS dry through prepayments and pension overcharges. "PAEA" is the law governing USPS pricing and other financial matters.

Oh, and for those who don’t know, “KISS” stands for “Keep it simple, stupid.” Always good advice, especially when dealing with Congress. 


Postal Reform: Let's KISS - 'Keep It Simple . . .' 

With all the discussion on desired postal reform, where do things stand, and where do we go from here? Please allow me to start with the conclusion and work backwards from there... let's KISS with real intent! Everyone at the table agrees that (1) any FERS and CSRS overpayment should be refunded and (2) the RHBF payment schedule should be restructured. These two reforms provide the most immediate financial relief, the greatest bang for the buck, and avoid changes that would weaken the value of mail and inhibit growth in the mail. So let's KISS now, execute these changes, and move on with the development of fruitful businesses and a healthy postal infrastructure.

Where things stand in Congress. The talk about the need for postal reform has dragged on for a year with the current Congress, after failed attempt by the prior. Although the House passed H.R.2748 through committee last summer and the Senate passed S.1486 through committee this February, neither have sufficient support in their full chambers. So the possibility of a conference to reconcile differences among the two bills is slim.

Presumably this was the impetus for Representative Issa's surprise tack of peeling off individual elements of postal reform and working them into separate legislative activities. On May 21, he worked into the MAP-21 Reauthorization Transportation Bill (set to expire September 30), the directive to move from door delivery to centralized or curb delivery over 10 years, for an estimated savings of over $2B/year. This delivery mode bill, H.R.4670, passed by strict party line. However, that does not mean it will necessarily survive within the larger Transportation Bill.

Then on May 30, a memo circulated around the House GOP recommending the elimination of Saturday delivery as a budget offset to the cost of a short term fix to the Highway Trust Fund. As others in the Senate and union leadership have expressed, this is a deeply flawed proposal that kicks the can down the road yet again on both meaningful postal reform and a long term fix of the Highway Trust Fund. Hopefully sensible minds will prevail and this will be the last we hear of this "offset" lunacy.

Where things stand in USPS Headquarters. So far, USPS HQ has not offered any compromise, explaining that all requests (5-day delivery, health care program changes, governance changes and rate increases) need to be granted in order to meet inflationary pressures and capital expenditure investments (e.g. replacing delivery vehicles that have already surpassed their life expectancy).

Where things stand with the Unions. The unions recognize the harm that would be done to the value of mail (and thus mail volumes and revenues) should Saturday mail delivery be eliminated and/or current door and curb delivery be moved to cluster boxes. Cluster boxes are simply not as convenient and would not be visited as frequently. Either delivery change would result in more “mailbox clutter” which leads to sales cannibalization and lower response rates and sales, deeming mail a less effective advertising tool. A change in both modes would compound the devaluation.

Where things stand with Consumers. When consumers are asked whether they would be agreeable to eliminating Saturday delivery in order to help the Postal Service get out of the red, they say "sure." However, when you tell them that it's not their tax payer dollars that fund the postal service, they admit "oh, I didn't know that."

Where things stand for the Stakeholders -- the business mailers (aka "customers") who actually pay for the lion's share of postal service. The postal customers appreciate the delivery service improvements realized in the last two years. Mail is a choice for commerce and communication. Predictable pricing, and, predictable and consistent service are what makes mail effective.

However, commercial postal customers:

• are now paying exigent surcharges for these services. And we are living under the threat of the Postal Service and Congress wanting to permanently bake in the exigent surcharge that the Postal Regulatory Commission ruled as temporary, which is consistent with the intent of the 2006 Postal Accountability and Enhancement Act.

• are also dealing with an added day/degradation in Standard Mail service standards for mail inducted into SCFs on Fridays and Saturdays.

• continue to live with the additional threat from the Postal Service and Congress to end Saturday mail delivery.

What happened to the adage "The customer comes first"? Some additional thoughts to chew on while we KISS:

• Isn't it more typical that when a company is struggling financially, they run sales to attract more business, not increase prices?

• For those who say commercial customers need skin in the game and need to compromise to accept something above CPI price cap increases --- hello, the mailing industry has already gone through numerous company mergers, plant closings, reductions in force, and oh yeah, that exigent increase that has caused us to cut volumes and thus revenues which create a negative ripple effect on “mail multiplier” volume generated by advertising mail. Prospect sources shrink, the most profitable First-Class Mail communications shrink, as does parcel volume -- the golden hair child of the Postal Service.

CPI based price increases are the typical starting point in market place negotiations and are often adjusted down, not up.

The CPI price cap has most definitely and effectively driven postal cost reduction initiatives; the cap needs to be retained to continue to do so.

• For those who speculate the exigent price increase hasn't hurt mail volume, have you spoken to customers? The volume and revenue could have been higher absent the increase.

• How is it acceptable that for several years and during such a critical time, the Postal Service Board of Governors who are to “direct and control its expenditures, review its practices, conduct long-range planning and set policies on all postal matters” has had 5 vacant positions out of 9? Of the four positions appointed ~ 8 years ago, the terms of two expire in December of this year. And among this limited group, there is very little experience overseeing the strategy and expenditures of an organization that is of the size and reach of the Postal Service. Yet, the Senate bill gives the Board of Governors more autonomous rate setting authority, so the monopoly would essentially be unregulated, and the Postal Regulatory Commission would be relegated to an advisory and complaint mediator role, stripping it of its “regulatory” designation.

• Since when is it acceptable to blatantly ignore the checks and balances of our judicial system by suggesting that regardless of the outcome of the appeal on the exigent price increase, Congress can trump the decision and bake the surcharge in to postal prices if they see fit?

• Although finances still wouldn't be great, it is highly doubted that we would even be discussing another attempt at postal reform if it wasn't for the $5 billion/year required payment for the Retiree Health Fund that came about in the 11th hour of PAEA negotiations.

I'm sure every CEO of every commercial mail customer would love to have a crystal ball to see whether similar mistakes in last minute or lame duck negotiations will be made again.

The conclusion is worth repeating... let's KISS with real intent! Everyone at the table agrees that (1) any FERS and CSRS overpayment should be refunded and (2) the RHBF payment schedule should be restructured. These two reforms provide the most immediate financial relief, the greatest bang for the buck, and avoid changes that would weaken the value of mail and inhibit growth in the mail. So can we KISS now, by making these changes in order to move on with the development of fruitful businesses and a healthy postal infrastructure, rather than continuing to go to bed angry and worrying about what the future holds?

17 More Ways USPS Is Not Like a Real Business

Please see the U.S. Postal Service's response to this article, Layers of Redundant Management Have Been Eliminated, USPS Says.

The recent article Nine Ways the Postal Service Is Not Like a Real Business apparently struck a chord, or maybe a nerve, generating numerous insightful comments on this blog, various LinkedIn groups, and private emails.

Though the U.S. Postal Service must live off of the revenue it generates rather than on government appropriations, it differs fundamentally from private enterprises in numerous ways. Those distinctions are more than just an interesting point of discussion. They are a key to understanding the Postal Service and how it might be reformed.

So, with thanks to many Dead Tree Edition readers, here are xxx more ways the USPS is not like a real business:

1. The concept of “investment” is nearly absent from the Postal Service, which must live from one annual budget to the next. It is not able to access private capital markets, such as the bond market, to finance major capital investments. That prevents it from making investments that would probably pay off in the long run, such as replacement of its aging, inefficient delivery fleet and more of the kind of automation that has enabled it to increase labor productivity.
2. Similarly, the Postal Service is hamstrung when it comes to launching new products that are not immediately profitable. 
3. The Postal Service does enjoy low interest rates on its debt because it can borrow from the federal government. But it has reached the legal limit of its ability to borrow. And much of its debt was racked up to cover subsidies to the federal budget that were dressed up as prepaid retiree health benefits and pension-fund payments. 
4. “Real businesses are not required to invest ALL their pension assets in low interest government bonds but instead can choose to invest then in a balanced portfolio,” noted one anonymous commenter. “The difference in average returns on pension assets of the USPS and the average returns of a typical businesses pension assets amount to over $10 billion per year.” 
5. “They are forced to deliver to unprofitable addresses,” notes Mike Seethaler, president of Raintree Graphics in Jacksonville, FL. “If a customer is too far out and too small for us to make a profit, we don’t do business with them.” In contrast, one commenter noted, USPS “is mandated to serve all areas of the country, every address, every day.” 
6. Speaking of unprofitable customers, USPS can’t charge higher prices for customers who are expensive to serve. People who get front-door delivery pay no more than those who receive their mail curbside or in cluster boxes. When USPS has to rely on airplanes, boats, or donkeys to get mail to remote places, it can’t charge a premium for those services. And it costs you 46 cents to send a letter from Maine to Alaska, or to send it across town. 
7. “Real businesses report long term liabilities, like retiree health benefit liability, on their balance sheet, and only report them as an expense when money is set aside to fund the liability,” wrote Liam Skye. “USPS is the only organization that is required by law to report fixed amounts of the liability as expense, whether they put the money aside to fund the liability or not!” 
8. Unlike most postal agencies around the world, the U.S. Postal Service is legally restricted from straying outside of its core business of offering postal services. And even its delivery-related ventures can run into problems if they compete with private businesses. “Consider the fact that USPS came up with the concept of overnight mail first,” says R.E. Perry. “It made so much money for the service that USPS bought a bankrupt airline rather than continue to pay other carriers to provide that service. Complaints that private companies could be making this money led to Congress ordering the service to sell the airline, and return to paying others to move their mail.” 
9. The Postal Service is subject to a regulatory agency, the Postal Regulatory Commission, that has no authority over USPS’s private-sector competitors. 
10. “Another way USPS is not like a business: It is mandated by the Constitution of the United States,” wrote Kofi M. G. W. Opantiri. (Technically speaking, the Constitution authorizes but does not require Congress “to establish Post Offices.”) 
11. It is exempt from income, sales, and real estate taxes. On the other hand, USPS is not eligible for the kind of tax breaks that incent private businesses to expand and to become more energy efficient. 
12. “Real businesses don't have two private police agencies who have to enforce thousands of federal rules and regulation WITHOUT reimbursement,” noted one commenter. 
13. By law, postal workers cannot strike. But impasses in labor-management negotiations at the Postal Service lead to an unusual step – binding arbitration. 
14. Private businesses are not subject to the Freedom of Information Act. But nor do they have the power of eminent domain, exemption from many state and local laws, and some protections from being sued. “USPS considers itself above the law,” wrote “a lady veteran.” “Some of their trucks should never be on the road.” 
15. “Not even Wal-Mart risks electrocuting its employees,” tweeted Dave Berdych, alias Dry Mail Man, referring to OSHA’s four-year investigation of electrical safety hazards in numerous postal plants. 
16. ‏ “No real business would have this many layers of redundant management. (bureaucracy),” responded one reader, echoing a complaint often heard from postal workers. 
17.  “Real business management incompetence is usually dealt with a demotion or termination,” wrote another. “Postal incompetence is rewarded with a promotion.” 

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.

Nine Ways the Postal Service Is Not Like a Real Business

The hand wringing about the U.S. Postal Service’s broken “business model” doesn’t fool us. The “dot com” at the end of “usps.com” doesn’t fool us. The nagging of politicians and pundits who say USPS should operate more like a business doesn’t fool us.

Despite all the talk about the Postal Service being a business, regular people understand it has the soul of a government agency and in fact is not allowed to act in a businesslike manner. Here are nine examples of how USPS is not like a real business:

1. Real businesses underfund their pensions. The Postal Service overfunded its pension plan (to the benefit of the federal government, not postal employees).


2. When a too-big-to-fail business gets into financial trouble, the federal government often props it up with interest-free loans in the name of economic stimulus. When the Postal Service ran into financial trouble, Congress insisted that it continue lending interest-free money to the federal government in the guise of prepaid retiree health benefits. 


3. A real business with thousands of employees might pay its CEO $50 million a year, and no one bats an eyelash. But if the Postmaster General, who oversees 600,000-plus workers, earns 1% of that amount ($500,000), watch the politicians fall all over themselves lambasting the Postal Service’s lavish spending.


4. Real businesses are governed by a board of directors, generally consisting of about a dozen leaders who are or soon become intimately familiar with the enterprise. But the supposedly independent Postal Service in reality is governed by a 535-member board known as Congress, whose members generally know nothing about the USPS’s operations except how to get a post office named and how to prevent it from closing.


5. Board members of a real business have powerful incentives, like stock options, to make the company run more efficiently. But a member of the Postal Service’s real board (that is, a Congressman) only has incentives to preserve inefficiencies that maximize the number of postal employees and facilities in his district.


6. When the board of a real business fails to act, board members get punished with a lower stock price and the prospect of not being re-elected. When the Postal Service’s real board of directors fails to act, postal customers get punished with higher prices.


7. Real businesses make money on monopolies – at least until the trust busters come along. The Postal Service has a government-protected monopoly on the mailbox, but it comes with such onerous conditions that the monopoly is unprofitable.


8. Real businesses make campaign contributions and use lobbyists to curry favor with members of Congress. The only “campaign donation” USPS makes is the franking privilege, which enables Congress members to send free mail to constituents (usually just before election time). USPS's lobbying efforts are limited severely by law.


9. A real business that is billions in debt, has too many locations and employees, and is subject to strong union contracts would have declared Chapter 11 by now. The law would be on its side as it tried to walk away from most of its debts, scale back its operations, and even slip out of its union contracts. The Postal Service, however, apparently cannot turn to the bankruptcy courts – one more example of how the law treats it as just another government agency even though it’s supposed to operate like a business.

Do you know of other ways in which USPS is not like a business? Add a comment to this blog post or email them to me at dead.tree.edition@gmail.com. I can keep your comments anonymous if you'd like. And please see the follow-up article, 17 More Ways USPS Is Not Like a Real Business, which is based on insights from Dead Tree Edition readers.

For background information on some of the items listed above, please see:

• Overfunded pensions: Pensions: Another Government Rip-off of the Postal Service
• Prepaid retiree health benefits as interest-free loans to the federal government:Postal Relief? How About No More Congressional Thievery?
• Punishing the customers: Why the Exigent Postal Rate Increase Will Backfire
• USPS bankruptcy: Could Forever Stamps Become Worthless? What Bankruptcy Might Mean for USPS

Why the Exigent Postal Rate Increase Will Backfire

Let’s be honest: Given the U.S. Postal Service’s dire financial condition, the 4.3% emergency rate increases it announced yesterday are hardly exorbitant. That won’t prevent the move from being a disaster for the nation’s mail system.

I have little doubt that some Congressman will blast the USPS Board of Governors for putting forth relatively small “exigent” (greater-than-inflation) price increases. But the micro-managers on Capitol Hill, who should be focused on getting their own house in order, need to understand why the governors aren’t pushing for more.

I think the Board of Governors is trying to make the best of a bad situation, attempting to satisfy the political pressure for higher prices without scaring away customers. I suspect they understand the dangers of any exigent increase in the context of recent Congressional inaction and downright buffoonery on postal issues.

Being part of an industry (magazine publishing) that opposes any exigent increases, I’m not supposed to say this but I will: Mail-dependent companies could probably stomach a one-time extra price increase of less than 5% if – and this is a big “if” – it were part of a larger move to put the Postal Service onto a sustainable path.

We wouldn’t like it, and we might grumble loudly. But most of us would happily pay a few more percentage points in return for ensuring the long-term health of the postal system. And we would stop putting so much energy into figuring out how to reduce our mail volumes and once again include creative use of the mail in our long-term marketing plans.

That, however, is not what happened yesterday. What we got instead was an exasperated Postal Service whose attempts to right the ship have been scuttled at almost every turn by a do-nothing Congress. Accompanying the announcement are:

• No refund of the billions of dollars the Postal Service overpaid into the federal pension system because of funky accounting.
• No payback of the billions of dollars in interest-free loans USPS has given the federal government under the euphemistic name of prepaid retiree health benefits.
• No real progress on consolidating the Postal Service’s bloated network of post offices.
• A recent reversal of progress on correcting the shamefully slow process of getting postal retirees their full annuity payments, which makes employees afraid to retire and stymies the Postal Service’s move to a smaller, more flexible workforce. (The much-maligned federal bureaucracy was making real headway until – you guessed it – Congress derailed the train of progress by failing to pass a budget, as explained in Budget Cuts Are Delaying USPS and Federal Retiree Payments.
• No action on allowing the Postal Service to start potentially lucrative ventures – even ones that wouldn’t really compete with private enterprise, such as delivering wine and beer.

All of that inaction makes yesterday’s announcement scary for the business mailers that provide the bulk of the Postal Service’s revenue. We can see what’s coming: Congress members will continue nagging the Postal Service to be more businesslike while forcing it to do something very un-businesslike – raising prices in the face of increased competition and declining demand.

What we mailers see is not a one-time price hike but rather the first of many “emergency” increases that will increasingly thrust USPS into a death spiral. Congress will keep blocking meaningful action on the Postal Service. But USPS customers (and employees) will be the ones who are punished.

As the mythical pirate captain told his crew, “The beatings will continue until morale improves.”

Except that, starting yesterday, mail-dependent companies began redoubling their efforts to get off the ship.

Don’t be surprised if more alternative-delivery ventures sprout up to deliver coupons, magazines, product samples, and even catalogs. Or if publications start providing real incentives to switch their subscribers to digital editions.

Don’t be surprised to see more “Go Green, Go Paperless” campaigns as banks and utilities desperately try to slash their mail volumes. (The “Go Green” part of the slogan is, at best, unsubstantiated, unless it refers to the bank’s cash flow and not to the environment.) Getting a large portion of its customers to switch to paper-less billing will look like a growing source of competitive advantage for companies that send a lot of bills.

Even without knowing whether yesterday’s proposal will stand up to litigation, business mailers all over the country are already asking the same questions: How can we reduce our mail volumes enough next year to counteract the price increase? And, longer term, how can we get out of the mail altogether before these price increases get totally out of hand?

Related articles:

• Why Potter Is Freezing Postal Rates, And What It Means For 2010  
• Mailers Rallying Against Rumored 10% Postage Hike
• Is the Postal Service Really Broke? 
• Congress Hears the Truth About Postal Service Finances

 

Four Print-Related Giants That Have Defied Bankruptcy Predictions

So much for crowd sourcing.

Exactly 18 months ago, 79% of voters in a Dead Tree Edition poll predicted that at least one of four major U.S. print-related companies would be in bankruptcy court by the end of 2012. All four companies – the country’s largest magazine distributor, the largest seller of magazines, and the #2 printer and paper maker for the industry – are still afloat. Two of the four are even profitable.

Print, it turns out, isn’t dead. Maybe comatose, but definitely not dead yet.

The 743 voters in that January 2012 poll couldn’t agree which of the four would go belly up, but the vast majority thought at least one would. Here’s another look at those four organizations and where they are today:

Barnes & Noble was chosen Most Likely to Expire, with 30% of the voters saying it would be in bankruptcy by the end of the year. Pundits were dubious whether B&N’s Nook venture would be sufficient to save the big bookseller from the rapid shift to digital media.

The bookstores, however, continue to be profitable, keeping the company afloat despite continuing losses in the Nook business, which has turned out to be more of an anchor than a lifeboat. The company seems likely to spin off the Nook business or at least to de-emphasize sales of Nook tablets.

What’s not clear is what would take the place of the huge Nook department in the typical brick-and-mortar B&N store. Books? Event space? Food service? Kindles and iPads? In any case, Barnes & Noble’s stock price is up 45% since Jan. 31, 2012 when the Dead Tree Edition poll ended.

Quad/Graphics was #2 on the See-You-In-Chapter 11 list with 21% of those January 2012 voters saying it wouldn’t survive the year. Meanwhile, its stock has risen 131%, it gobbled up another major competitor (Vertis) in January, and it’s apparently on pace for a profitable year.

It’s not that catalogs, books, and direct mail are suddenly growth businesses, but those who predicted the sort of catastrophic declines that devastated the newspaper industry have so far missed the mark. Quad has been able to grow market share with acquisitions and to battle declining demand and prices with efficiency-improving plant consolidations.

A close third to Quad was Verso Paper, which has continued to defy predictions that bankruptcy reorganization was just around the corner. Its stock price is down 14% since the January 2012 poll, and “profit” is still not part of Verso’s lexicon.

The heavily indebted paper maker seemed too fragile to survive a major disaster like the May 2012 explosion that led to the closing of its Sartell, MN mill. But an insurance settlement and sale of the mill property have provided cash infusions, and prices for coated paper have remained remarkably stable despite eroding demand.

And then there’s the U.S. Postal Service, which brought up the rear with only 20% of the voters predicting a 2012 bankruptcy despite suffering by far the largest financial losses. Commenters noted that USPS was on a financially unsustainable path but said Congress would eventually do something because a shutdown of the Postal Service would be politically unacceptable.

But, so far, Congress has done little except to prevent USPS from curtailing Saturday deliveries and to extract projections from postal officials about the exact hour and day when USPS will run out of cash. Oh, and of course to name more post offices – a task so crucial to national security that even one of the most do-nothing Congresses in U.S. history would not shirk it.

If the Postal Service were a real business, its stock price would be zero now. Then again, if it were a real business it wouldn’t have loaned the federal government billions of dollars interest-free in the form of “prepaid” retiree health benefits. And Congress would probably have bailed it out by now.

Related articles:

• Is the Postal Service Really Broke? 
• Congress Is Fixin' To Fix the Postal Service
• Weak Demand Will Mean Higher Paper Prices  
• Yankee Invasion: Quad/Graphics' Jonesboro Closing Marks End of an Era 
• Verso Changes Course -- Why?

Politicking Leads To Profitable October for USPS

Bolstered by election-related mailings, the U.S. Postal Service experienced something unusual in October -- profitability.

USPS released preliminary financial results late yesterday showing net income of $61 million last month, the first month of Fiscal Year 2013, versus a budgeted loss of $244 million and last year's loss of $139 million.

If not for a $467 million charge for prefunded retiree health benefits, the agency's net would have been $528 million -- a profit margin of more than 8% on revenues of $6.03 billion. Those prepayments have been likened to an interest-free loan to the federal treasury that are designed to obscure the true size of the federal budget deficit. (See Congress Hears the Truth About Postal Service Finances.)

The volume of Standard mail -- derided as "junk mail" by critics -- was up 16% over October 2011. Standard class revenue rose only 10%, evidence that the big volume increase was concentrated in the kind of low-priced mass mailings of letters used by political campaigns.

Also helping the bottom line was better productivity: The Postal Service delivered 9% more mail pieces than in October 2011 but needed only 3% more work hours to accomplish that.

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.”)

7 More Reasons the GOP Might Be Starving USPS of Cash

Exactly why House Republican leaders chose not to act on any postal reform legislation before autumn is still a bit of a mystery. But last week’s Dead Tree Edition article on the subject (See 7 Reasons the GOP Might Be Starving USPS of Cash) stirred up plenty of theories and heated comments from all parts of the political spectrum.

Liberals seemed to think I was overly naïve in failing to see the obvious Republican plot to destroy the U.S. Postal Service and let the GOP's cronies loot what’s left. Several conservatives objected to Dead Tree Edition’s supposed liberal bias and questioned why links to this "partisan" article showed up in industry newsletters and LinkedIn groups.

I have a confession to make: Yes, I lean Democratic – whenever I hear Republican politicians yammering. And I start thinking Republican when the Dems start blowing their own hot air. As long as the two parties focus on name calling and sound bites rather than actual solutions, I have no qualms about ridiculing both sides of the aisle.

Anyway, amidst all the vitriol and conspiracy theories, seven additional interesting and sometimes insightful theories emerged to explain the GOP's inaction on the growing postal crisis:

1. Why bail out Obama?: If a real USPS crisis – like mail not getting delivered or people not getting paid – occurs before the election, who will get blamed? Sure, the thinking goes, House Republicans might take some heat for not bringing any bills to a vote. But the big issue would be the Obama Administration’s failure to provide leadership on a crisis that should have caught no one by surprise.


2. All pain, no gain: A vote for USPS cost cutting three months before re-election time? Forget about it. Many Congressmen probably had nightmares about their opponents holding media events at closed post offices or being cheered at rallies of laid-off postal workers. They know that those of us who to preserve the Postal Service by enabling it to balance its budget are poorly organized and will have little impact on this fall’s elections.

Is the Postal Service Really Broke?

The U.S. Postal Service would be in Chapter 11 if it were a business, the Postmaster General points out, but others claim he and some political conservatives are manufacturing a crisis.

There has been much debate and confusion regarding USPS’s financial status. It helps to break the issue down into three questions:

Question #1: Is the Postal Service broke?

This is a debatable point, though the Postal Service’s financial reports show that it is indeed broke and about to exhaust its ability to borrow.

Those who say USPS’s finances are OK point out correctly that it has prepaid billions of dollars to the federal government to cover future retirees’ health benefits and overpaid billions more into a joint federal/USPS pension fund. A Congressional accounting game designed to mask the size of the government’s budget deficit basically has the Postal Service borrowing billions of dollars each year so that it can turn around and lend billions back to the government in the form of prepaying into the retiree-benefits fund.

Business-style accounting would treat that $21 billion loan to the federal government as an asset, giving USPS about $2 billion in net capital at the end of Fiscal Year 2011 rather than the -$19 billion net value it reported.

USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies

The U.S. Postal Service will offer retirement incentives if it is allowed to make cost-cutting moves like eliminating Saturday delivery, its CEO told a Congressional panel today.

Rep. Dennis Ross, chairman of the House subcommittee overseeing postal legislation, stated that USPS needs to lose nearly 150,000 employees via attrition "to rightsize the expenditure side of the Postal Service." He asked Postmaster General Pat Donahoe whether he would offer employees retirement incentives to make that happen.

"We do plan on issuing some incentives based on the fact that we make some changes in our operation," Donahoe responded during a hearing. "As we shrink the network, as we move from six- to  five-day delivery, we would put in some incentive money to move people along."

He did not specify what sort of incentives would be offered or how they would be funded. Nor did he state whether retirement incentives would be offered if Congress blocks some of his cost-cutting proposals.

USPS Seeks 'Soft Landing' For Downsized Employees, Donahoe Says

The U.S. Postal Service plans to provide a "soft landing" for employees affected by downsizing and is looking for ways to avoid closing rural post offices, the Postmaster General will testify Tuesday.

"The Plan to Profitability focuses on workforce reductions through employee attrition versus layoffs or wage reductions, meaning impacted career employees would be able to retire or find another job in the Postal Service," PMG Pat Donahoe will tell a House subcommittee. USPS released his prepared remarks today.

"In response to declining mail volumes and to increase productivity, the Postal Service consolidated over 200 mail processing facilities in the past five years from our peak number of 673 facilities in 2006. In doing so, we have customarily provided a 'soft landing' for employees through retirements and reassigning staff, in an effort to minimize impacts on employees. We have been, and continue to be, a responsible employer."

Donahoe will largely reiterate his plea that Congress enable the Postal Service to adjust to declining mail volumes with such cost cuts as eliminating Saturday delivery, closing facilities, and letting it leave the federal government's inefficient employee-healthcare plan. But he will also provide hints that USPS's plan to balance its budgets is still a work in progress.

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.

How Congress Bankrupted the Postal Service in 3 Easy Steps

With all the confusion in the news media about the U.S. Postal Service's financial problems, finally one writer nails it on the head.

In Next Washington Debacle: The Broke Postal Service at Seeking Alpha, usnews.com columnist Rick Newman succinctly summarizes "how Congress has made the mail service a national embarrassment":

1) Hamstringing its finances: "The postal service faces unusual limits on its ability to manage costs, such as an obligation imposed by a 2006 law to 'prefund' a large portion of its retiree healthcare plan, instead of a more typical pay-as-you-go arrangement." Newman doesn't mention that the prefunding is an accounting trick used to understate the size of the federal budget deficit.

2) Making it obsolete: "Congress has ... micromanaged the postal service through a strict set of rules governing what it can and can't do while fulfilling its mandate of universal mail service."

3) Waiting until disaster is near: "The USPS has been seeking sounder finances and greater independence for several years, yet Congress has sat on its hands to the point that default seems likely and insolvency is even possible."

Newman concludes that postal reform "won't happen unless Congress relinquishes its own prerogative to interfere. Don't stand by the mailbox waiting for deliverance."

Other recent articles about the Postal Service's financial problems and cost-cutting efforts:

• Postal Service, White House Engaged in 'Intense Discussions'
• Donahoe's Downsizing Plan for USPS Yields Huge PR Coup

Donahoe's Downsizing Plan for USPS Yields Huge PR Coup

The past week capped off an astounding publicity coup for the U.S. Postal Service, which is not usually known for its adroit public relations.

Years of conferences, letter writing, study reports, and publicity campaigns by mailers, postal unions, and postal management had largely failed to draw much attention to USPS’s financial plight – or to Congress’ role in causing that plight.

Suddenly last week, it seemed, news of the Postal Service’s dire straits was everywhere – on front pages, leading off network newscasts, featured in one of David Letterman’s famous Top 10 lists, and the subject of a hilarious “The Daily Show with Jon Stewart” bit.

What turned the tide wasn’t highly paid lobbyists, high-powered PR consultants, ot clever slogans. (Remember efforts to brand so-called prepaid retiree health benefits as a “Stamp Tax”?)

The key was a bit of Reality Therapy, in the form of postal executives spelling out what they would have to do to keep the Postal Service solvent in light of Congressional policies.

It started with a small dose of reality in late July when USPS announced a list of 3,700 underperforming post offices being considered for closure. The small post offices represent less than 1% of USPS’s budget, and their closure would not be as momentous as recent consolidations of processing and distribution centers.

The news media and general public, however, know little of P&DCs, but everyone knows what a post office is. Post office closings, along with the Postal Service's financial problems, became a hot topic-- with some articles even mentioning that Congress’ failure to yield on USPS’ pension and benefit overfunding as a major culprit. The timing was perfect: After the debt-ceiling debacle, the public didn’t have a hard time believing that Congress was to blame for much of USPS’s trouble.

Then the big dose came last month when Postmaster General Pat Donahoe announced his radical transformation plan, which called for laying off an estimated 120,000 postal workers and closing more than 300 P&DCs over the next four years. The prospect of having to rescind no-layoff clauses in union contracts and putting so many postal employees out of work got Congress' attention.

The news-media pack started smelling a juicy story. It couldn’t resist the opportunity for multiple sound bites from a Congressional hearing this past Tuesday.

“We have NEVER seen this many cameras for a #Postal hearing,” Washington Post reporter Ed O’Keefe tweeted a few minutes before the hearing began.

Despite the praise from mailer groups, Donahoe’s plan is deeply flawed. For example, smoothly transition from more than 500 P&DCs to fewer than 200 in only a year? Not likely.

But the proposal has succeeded in drawing attention to what Not-In-My-District politics, Congressional accounting games, and White House inaction are doing to an organization that touches every American without spending taxpayer money. Perhaps from all this notoriety and discussion, real solutions can emerge.

Related articles:

• Pensions: Another Government Rip-off of the Postal Service 
• Congress Hears the Truth About Postal Service Finances  
• 6 Points Donahoe Left Out of His Bailout Rebuttal
• A New Slogan for the Postal Service: "Just Say No"

Postal Service Can No Longer Afford Money-Saving Tactics, Study Says

Two of the U.S. Postal Service’s most successful methods for cutting costs – early-retirement incentives and automation – are no longer viable strategies because of USPS’s cash crunch, according to a report released today.

“Overall, offering more early retirements for eligible employees would create additional cost savings,” says the report from the USPS Office of Inspector General on USPS's cost structure. It noted a Postal Service statement indicating that savings from buyouts of more than 20,000 clerks and mail handlers two years ago have already doubled the $15,000-per-retiree payouts.

“The problem, however, is how to incentivize further buyouts that the Postal Service cannot afford to offer in its current financial state.”

Largely because of investments in automation and other efficiency improvements, the Postal Service’s labor productivity has improved by 10% in the past decade, according to the report. That has come despite the cards being stacked against the Postal Service -- in the form of decreasing volume, increasing delivery points, and benefits costs that are skyrocketing largely because of Congressional mandates.

But with spending constraints implemented two years ago, USPS’s capital investment has dropped to less than half of its depreciation costs and is one-third to one-sixth the level that is typical for private competitor UPS.

“A continuing freeze in capital investment, while saving the Postal Service in the short term, may paradoxically lead to higher costs in the future, as it defers projects that could potentially improve productivity, such as information technology (IT) upgrades, network rightsizing, and the purchase of energy efficient vehicles. Rightsizing the network to meet decreasing demand is vital to the future viability of the Postal Service.”

Much of the blame for the Postal Service’s financial problems, the report says, comes from its unusual prefunding of retiree health benefits. Congress established those multibillion-dollar annual payments “to secure the Postal Service’s long-term financial viability” but they “are ironically undermining efforts to keep the Postal Service solvent in the near term."

The report concludes: "The Postal Service is at a critical juncture in its history. Only through a combination of continued cost reductions including a rightsizing of the network to meet declining demand, legislative action to deal with cost burdens, and investing in select projects that continue its long history of productivity increases can the Postal Service return to economic viability."

Related articles:

• Here's How the Postal Service Can Get Back Its Pension and Benefits Overpayments: The Inspector General's report cites this Dead Tree Edition article, which advocates making it easier for USPS employees to retire and offering incentives for employees to switch from full-time to part-time status.
• Donahoe's Answer to Postal Bailout Criticism: The Postmaster General recently explained why USPS "needs relief from Congressional mandates".
• Postal Watchdogs Trying to Unleash USPS Innovation: Many of the new ideas for the Postal Service are coming from two unlikely sources -- the independent Office of Inspector General and the Postal Regulatory Commission.

6 Points Donahoe Left Out of His Bailout Rebuttal

In Donahoe’s Answer to Postal Bailout Criticism, we noted the Postmaster General’s recent article explaining that the U.S. Postal Service’s financial straits are a creation of Congress rather than actual financial losses. But the article omits key points, partly because the Postal Service can’t afford to offend Congress right now with the unvarnished truth.

Here are six more things that ignorant critics in Congress and the news media need to consider about USPS finances:

1) Congressional game: The Postal Service is the victim of a Congressional accounting game. What Donahoe diplomatically labels “prepayment to the Retiree Health Benefit fund” was more accurately described by the Office of Inspector General as using “Postal Service funds to make the President’s budget seem smaller.” (See How USPS Could Bypass Congress on Saturday Delivery.)

2) Real conservatism: Why are so many conservatives criticizing efforts to end the “prepayments” when they also claim (correctly, in my view) that the President’s budget is too large? If they understood the situation, I suspect they would conclude that the truly conservative approach would be to end this shell game that misleads taxpayers about the size of the federal deficit. But that would require searching for the truth rather than sound bites.

3) Reforming the “prepayments” is no longer enough: Although accurate accounting of the prepayments, as assets rather than expenses, would have put USPS in the black in recent years, that no longer seems to be the case. The rapidly declining volume of highly profitable First Class mail is overwhelming the Postal Service’s cost-cutting efforts. USPS must find additional efficiencies to balance its books.

4) Not much light in there: The people who claim that the recent APWU labor contract is a giveaway by the Postal Service are engaged in “rectal-cranial explorations”. (That’s a polite way of saying they’ve got their heads up their – well, you get the point.) As someone who works in the news media, I’m embarrassed by many of the news articles and editorials on the contract, which clearly were written by people who hadn’t bothered to look at the contract or to do even a few minutes of research. The pundits tut-tutted about the pay raises for current employees without noticing the more significant efficiency gains, such as pay-scale reductions for future employees and greater use of part-time and temporary workers. (See Is the APWU Eating Its Young? and Junk Journalism and the Bogus Postal Statistic for more on the groundbreaking contract.)

5) Hypocrites: Any member of Congress who criticizes the Postal Service for not cutting expenses enough is a hypocrite. Have you ever heard of a Congressman supporting the closure of a rarely used post office in his district? Donahoe’s article pointed out cost cuts in recent years totaling about 15% of annual USPS expenses and plans for another 25% in cuts. How many members of Congress have advocated specific cuts in the federal budget that even approach that kind of scale?

6) Penny wise, pound foolish: The Postal Service has foregone some investments that would have easily paid off, such as replacing some of its aging, high-maintenance delivery vehicles and revamping some of its facilities. (See Here's How the Postal Service Can Get Back Its Pension and Benefits Overpayments for more on this issue.) But its cash crisis, brought about by the bogus retiree health benefits accounting, has prevented it in recent years from spending a little money to save a lot more.