The U.S. Postal Service has some mailers in a panic because it is reportedly planning to issue complex, last-minute changes to the rules for Full-Service Intelligent Mail discounts.
Not to worry: After getting a sneak peak at the rules that will supposedly be released Friday to mailers and to the employees who will enforce the rules, Dead Tree Edition offers this simple, exclusive analysis: Using Full-Service Intelligent Mail barcodes (IMbs, AKA FUBAR codes) is like having a first-class cabin on a luxurious cruise ship -- The Titanic.
In The Postage Discount No Mailer Wants, Dead Tree Edition explained two days ago a few of the ways the FUBAR code has been a disaster so far. As if to underscore that article's point, postal officials revealed to some mailers today a number of rules changes that they might announce on Friday for implementation three days later on what Lisa Bowes at Intelisent is calling Black Monday. The Association for Postal Commerce (PostCom) noted that the proposed changes have to do with "Full-Service IMb Verification procedures and error tolerances and postage consequences.
Bowes sums up postal executives' thinking on the FUBAR code this way: "Let’s acknowledge that there are major issues with Intelligent Mail, but proceed as if 'everything is fine' anyway."
Another of her top ten thoughts today from the "Intelligent Mail think tank": "Let’s write and then continually edit/update at least a dozen different guides and specifications necessary to do Full Service Intelligent Mail."
I know what you're thinking: "OK, Mr. Tree, I'm so interested in these new rules that I can't wait until Friday. I've already called my relatives to tell them I'm skipping Thanksgiving dinner to get to work on this, so give me the details."
Here you go: They're rearranging the chairs on the deck, and the captain insists on trying to break the record for fastest crossing of the Atlantic. Yes, this will be an historic trip. No, you don't want to be on it.
For the foreseeable future, that's all you need to know about Full-Service Intelligent Mail.
Wednesday, November 25, 2009
Sunday, November 22, 2009
The Postage Discount No Mailer Wants
For an update of this article, please see Everything You Need To Know About Full-Service Intelligent Mail.
With less than a week to go before a new postage discount debuts, knowledgeable mailers want nothing to do with the new program.
It’s officially called the full-service Intelligent Mail barcode (IMb). But as the horror stories and unresolved problems rack up, Dead Tree Edition hereby dubs it the FUBAR (Failed Unbelievably Bureaucratic Addressing Regulations) code. Those of you with military experience know another meaning for FUBAR, and the IM program certainly fits that definition as well.
“Most, if not all, Standard Mailers are steering clear of Full Service ACS [address correction],” Lisa Bowes wrote recently at Intelisent’s Postal Affairs Blog. “Full Service ACS may be pretending to be ready for prime time, but the reviews so far are negative.”
Many Periodicals mailers are also spooked about the Intelligent Mail program after hearing how it cost Time Inc. more than $90,000 in duplicate address-change charges in a period of just two months. Newsweek, often a leader on postal issues in the magazine industry, spread the word among publishers a few months ago that it was not putting any more resources into Intelligent Mail.
Postal officials in charge of the much-delayed IM program gave their usual everything-is-on schedule presentation at last week’s Mailers Technical Advisory Committee meeting. (“This ship is unsinkable! Ooh, look at the pretty iceberg.”) And once again they baffled mailers with yet another broken promise. The Association for Postal Commerce (Postcom) summarized the situation this way:
“Despite the Postal Service’s repeated assurances that it would not establish error tolerances and consequences for IMb Full-Service mailings until both the USPS and industry have more experience with the complexities of Full-Service and data can be collected and analyzed, the USPS said its verification procedures and consequences will take effect on November 29, 2009 – the date the IMb Full-Service price differential takes effect.”
The discounts amount to 0.3 cents per piece for First Class mail and a whopping 0.1 cents per piece for Standard and Periodicals. But the penalty for putting unreadable IM bar codes on mail pieces can easily be several cents per piece. The Postal Service has not standardized the process for determining whether such bar codes are readable, so mail that gets the green light from postal equipment at a printing plant might get flagged as unacceptable when it gets to the Postal Service’s sorting machines.
Bowes noted Friday that the IM program’s list of “issues” (problems) has grown to 16 pages, more than 100 items, and offered a hilarious translation of a gobbledygook advisory that IM officials issued that day. Her take on one of the mealy-mouthed statements: “A bunch of stuff is broken, and the USPS knows about them, but it is still full steam ahead.”
One of the issues for which the Postal Service was not prepared is that procedures need to be changed for letter carriers, writes Monica Lundquist of Window Book, Inc. Letter carriers typically cross out the traditional barcode when they handle a mail piece with an old or bad address, preventing the piece from getting redirected to the same bad address after it goes through processing for address-correction notification.
“If the Intelligent Mail barcode (IMb) is obliterated by the mail carrier, it will not be able to be scanned . . ., which means that the USPS will not be able to process the address corrections in the Intelligent Mail environment.” The solution, she says, is to train letter carriers how to handle poorly addressed pieces that have an IMb, but “the likelihood of this training getting accomplished quickly and thoroughly is not very high.”
Previous articles about the Intelligent Mail train wreck:
With less than a week to go before a new postage discount debuts, knowledgeable mailers want nothing to do with the new program.
It’s officially called the full-service Intelligent Mail barcode (IMb). But as the horror stories and unresolved problems rack up, Dead Tree Edition hereby dubs it the FUBAR (Failed Unbelievably Bureaucratic Addressing Regulations) code. Those of you with military experience know another meaning for FUBAR, and the IM program certainly fits that definition as well.
“Most, if not all, Standard Mailers are steering clear of Full Service ACS [address correction],” Lisa Bowes wrote recently at Intelisent’s Postal Affairs Blog. “Full Service ACS may be pretending to be ready for prime time, but the reviews so far are negative.”
Many Periodicals mailers are also spooked about the Intelligent Mail program after hearing how it cost Time Inc. more than $90,000 in duplicate address-change charges in a period of just two months. Newsweek, often a leader on postal issues in the magazine industry, spread the word among publishers a few months ago that it was not putting any more resources into Intelligent Mail.
Postal officials in charge of the much-delayed IM program gave their usual everything-is-on schedule presentation at last week’s Mailers Technical Advisory Committee meeting. (“This ship is unsinkable! Ooh, look at the pretty iceberg.”) And once again they baffled mailers with yet another broken promise. The Association for Postal Commerce (Postcom) summarized the situation this way:
“Despite the Postal Service’s repeated assurances that it would not establish error tolerances and consequences for IMb Full-Service mailings until both the USPS and industry have more experience with the complexities of Full-Service and data can be collected and analyzed, the USPS said its verification procedures and consequences will take effect on November 29, 2009 – the date the IMb Full-Service price differential takes effect.”
The discounts amount to 0.3 cents per piece for First Class mail and a whopping 0.1 cents per piece for Standard and Periodicals. But the penalty for putting unreadable IM bar codes on mail pieces can easily be several cents per piece. The Postal Service has not standardized the process for determining whether such bar codes are readable, so mail that gets the green light from postal equipment at a printing plant might get flagged as unacceptable when it gets to the Postal Service’s sorting machines.
Bowes noted Friday that the IM program’s list of “issues” (problems) has grown to 16 pages, more than 100 items, and offered a hilarious translation of a gobbledygook advisory that IM officials issued that day. Her take on one of the mealy-mouthed statements: “A bunch of stuff is broken, and the USPS knows about them, but it is still full steam ahead.”
One of the issues for which the Postal Service was not prepared is that procedures need to be changed for letter carriers, writes Monica Lundquist of Window Book, Inc. Letter carriers typically cross out the traditional barcode when they handle a mail piece with an old or bad address, preventing the piece from getting redirected to the same bad address after it goes through processing for address-correction notification.
“If the Intelligent Mail barcode (IMb) is obliterated by the mail carrier, it will not be able to be scanned . . ., which means that the USPS will not be able to process the address corrections in the Intelligent Mail environment.” The solution, she says, is to train letter carriers how to handle poorly addressed pieces that have an IMb, but “the likelihood of this training getting accomplished quickly and thoroughly is not very high.”
Previous articles about the Intelligent Mail train wreck:
Wisconsin Congressman Tries To Extend Black-Liquor Credits
It's a simple piece of legislation you could call the Publication-Paper Manufacturers Protection Act. Or perhaps the Bankrupt The Canadian Pulp Industry Amendment.
At barely 100 words, Rep. Steve Kagen's recently introduced bill never mentions pulp, paper, or black liquor. But, if enacted, H.R. 4066 would indefinitely continue the black-liquor credits that have been worth billions of dollars this year to U.S. pulp mills. Kagen, a Democrat, represents a section of northeastern Wisconsin dotted with such mill towns as Green Bay and Appleton.
At least 32 companies operate kraft pulp mills in the United States and are probably receiving more than $2 billion per quarter in "alternative fuel mixture" credits for powering their mills with a mix of diesel fuel and black liquor, a pulp byproduct. The companies sell the pulp to other manufacturers, often overseas, or use the pulp to make such products as copier paper, packaging materials, and high-quality publication papers.
The credits have been a nice boost to the bottom line for some of the companies. For others, they have been a lifeline -- especially for makers of coated paper and other publication grades, which have been hit especially hard by declining prices and demand this year
The stock of Verso Paper, the country's #2 coated manufacturer, is so beaten down that it would have been cheaper for the federal government to buy the company outright rather than to pay it the black-liquor credits it has earned so far this year. Privately held, and heavily leveraged, NewPage, the #1 coated maker, seems to be in an even more precarious state.
Today's prices are below the cash costs of many U.S. mills, NewPage executives say. They say that if the black-liquor credits expire, as scheduled, at the end of this year, some mills will either have to raise prices or shut down. Some market observers think the consequences would be even more severe -- bankruptcy reorganization for one or more U.S. companies.
But extending the black-liquor program would be devastating for many Canadian manufacturers, which sell much of their product in the U.S. without benefit of a $200-per-ton government subsidy. Fraser Papers blames the program for driving it into bankruptcy reorganization, and such companies as Tembec and Catalyst Paper are struggling to stay afloat while competing against the subsidized products.
A permanent U.S. program would either force Canada to answer with its own subsidies or to watch its pulp industry die. (Canada's answer to the U.S. subsidies so far is a less generous program that helps pay for capital investments.)
Kagen's bill is likely to face opposition from those who say the government's alternative-fuels efforts are supposed to encourage the development of new bio-fuels, not to reward companies for merely doing what has been standard practice at pulp mills worldwide for decades.
For more information, please see:
At barely 100 words, Rep. Steve Kagen's recently introduced bill never mentions pulp, paper, or black liquor. But, if enacted, H.R. 4066 would indefinitely continue the black-liquor credits that have been worth billions of dollars this year to U.S. pulp mills. Kagen, a Democrat, represents a section of northeastern Wisconsin dotted with such mill towns as Green Bay and Appleton.
At least 32 companies operate kraft pulp mills in the United States and are probably receiving more than $2 billion per quarter in "alternative fuel mixture" credits for powering their mills with a mix of diesel fuel and black liquor, a pulp byproduct. The companies sell the pulp to other manufacturers, often overseas, or use the pulp to make such products as copier paper, packaging materials, and high-quality publication papers.
The credits have been a nice boost to the bottom line for some of the companies. For others, they have been a lifeline -- especially for makers of coated paper and other publication grades, which have been hit especially hard by declining prices and demand this year
The stock of Verso Paper, the country's #2 coated manufacturer, is so beaten down that it would have been cheaper for the federal government to buy the company outright rather than to pay it the black-liquor credits it has earned so far this year. Privately held, and heavily leveraged, NewPage, the #1 coated maker, seems to be in an even more precarious state.
Today's prices are below the cash costs of many U.S. mills, NewPage executives say. They say that if the black-liquor credits expire, as scheduled, at the end of this year, some mills will either have to raise prices or shut down. Some market observers think the consequences would be even more severe -- bankruptcy reorganization for one or more U.S. companies.
But extending the black-liquor program would be devastating for many Canadian manufacturers, which sell much of their product in the U.S. without benefit of a $200-per-ton government subsidy. Fraser Papers blames the program for driving it into bankruptcy reorganization, and such companies as Tembec and Catalyst Paper are struggling to stay afloat while competing against the subsidized products.
A permanent U.S. program would either force Canada to answer with its own subsidies or to watch its pulp industry die. (Canada's answer to the U.S. subsidies so far is a less generous program that helps pay for capital investments.)
Kagen's bill is likely to face opposition from those who say the government's alternative-fuels efforts are supposed to encourage the development of new bio-fuels, not to reward companies for merely doing what has been standard practice at pulp mills worldwide for decades.
For more information, please see:
- Black Liquor Bonanza: Earnings Exceeding Projections of Experts and Congress, which describes how the more than $2 billion in black-liquor earnings during the 3rd Quarter surpassed all projections.
- Black Liquor Scorecard: $4.7 Billion Through September, which lists the amount of credits earned through September by each of the 21 publicly traded companies that own about three-fourths of the country's kraft pulp capacity.
- Boozing It Up on Black Liquor: One Company's High Is Another's Hangover, which explains that previous tax laws caused Fraser to build a pulp mill in Canada and a paper mill just across the border in the U.S. -- a strategy that backfired with the black-liquor program.
- Canadians Belly Up to the Black-Liquor Bar, which describes the recently approved black-liquor program in Canada.
Thursday, November 19, 2009
Mail Volumes Have Declined Faster Than The Postal Workforce, But That Might Change
The U.S. Postal Service’s workforce reductions did not keep pace with declines in mail volume the past two years, but postal officials indicate that may change this fiscal year.
Mail volume was down 13% and revenue was down 9%, but the number of career employees declined only 6% in the fiscal year that ended September 30, postal officials revealed this week. The previous year, volume declined 4% while career employees decreased 3%.
Postal officials revealed their projections Wednesday that both mail volume and the number of career employees will decrease by 6%. Revenue is only projected to decline by 3%.
With labor constituting about 80% of the Postal Service's costs, it has been scrambling to reduce its workforce the past couple of years in light of decreasing mail volumes. As the economy shows signs of climbing out of the recession, the Postal Service's cost decreases this fiscal year might actually exceed its revenue reductions.
A lot of numbers have been flying out of L’Enfant Plaza (USPS HQ) and elsewhere this week regarding the Postal Service. Here’s a summary of some key ones:
• 20,150: Employees, as of Oct. 31 who accepted the early-retirement offer made in August. USPS had planned for up to 30,000 to accept. Please see What the Postal Service Left Out of the Early-Retirement Deal and The Postal Service's Early-Retirement Snafu for more information the offer and its flaws.
• 40,110: Decrease in career employees during the past fiscal year, which ended Sept. 30 – a reduction of : 6%. Of the major categories of career employees, the decreases ranged from 3% for those in or related to headquarters to 9% for supervisors and managers in the field and also for clerks. Postmasters were down 6%, mail handlers and city carriers each decreased 5%, and rural carriers and building and equipment maintenance personnel were down 2% each.
• 12%: Decrease in the number of career employees since 2005, ranging from 2% for headquarters to 20% for clerks.
• 13%: Decrease in the number of non-career employees in just the past year after several years of relatively steady levels.
• 53,000: Projected decrease in full-time equivalents this fiscal year. That suggests another big cut in work hours for non-career employees.
• 36: Number of deliveries per hour in FY2009, up from 30 four years ago. Delivery operations are a productivity bright spot for USPS: There were 8% fewer career carriers but 4% more delivery points than there were four years ago.
• 13%: Decrease in number of mail pieces last year – including drops of 8% for Periodicals, 9% for First Class, and 17% for Standard.
• 223: Increase in the number of post offices, stations, and branches during the past year. At 36,946 facilities, the total has decreased by less than 1% in the past four years.
• -0.3%: The likely change in the average monthly Consumer Price Index for 2009, which sets the ceiling for annual increases in most postal rates and is used in determining some cost-of-living pay increases. Even before release of the October CPI, which was lower than a year ago for the seventh month in a row, postal officials had aalready announced they would not increase most rates in 2010.
• 25% to 30%: Projected decrease in paper consumption for JC Penney catalogs next year as a result of discontinuing its “big books”. No word on how much less its postage bill will be, but the move can’t be good news for the Postal Service.
• 1,869,168: Number of October 26 issues of Newsweek that were mailed in the U.S., down at least 600,000 from a few months ago and more than 1 million from two years ago. As it has reduced its circulation this year to match its lower ratebase, the weekly magazine has cut back drastically on free copies and low-priced subscriptions, according to a statement it filed with USPS. And its annual postage bill has also decreased by millions of dollars.
• 34%: The increase in U.S. credit-card solicitations during October versus the previous month, according to Mintel Comperemedia. That’s the first significant monthly increase this year, though October levels were still lower than a year ago.
Mail volume was down 13% and revenue was down 9%, but the number of career employees declined only 6% in the fiscal year that ended September 30, postal officials revealed this week. The previous year, volume declined 4% while career employees decreased 3%.
Postal officials revealed their projections Wednesday that both mail volume and the number of career employees will decrease by 6%. Revenue is only projected to decline by 3%.
With labor constituting about 80% of the Postal Service's costs, it has been scrambling to reduce its workforce the past couple of years in light of decreasing mail volumes. As the economy shows signs of climbing out of the recession, the Postal Service's cost decreases this fiscal year might actually exceed its revenue reductions.
A lot of numbers have been flying out of L’Enfant Plaza (USPS HQ) and elsewhere this week regarding the Postal Service. Here’s a summary of some key ones:
• 20,150: Employees, as of Oct. 31 who accepted the early-retirement offer made in August. USPS had planned for up to 30,000 to accept. Please see What the Postal Service Left Out of the Early-Retirement Deal and The Postal Service's Early-Retirement Snafu for more information the offer and its flaws.
• 40,110: Decrease in career employees during the past fiscal year, which ended Sept. 30 – a reduction of : 6%. Of the major categories of career employees, the decreases ranged from 3% for those in or related to headquarters to 9% for supervisors and managers in the field and also for clerks. Postmasters were down 6%, mail handlers and city carriers each decreased 5%, and rural carriers and building and equipment maintenance personnel were down 2% each.
• 12%: Decrease in the number of career employees since 2005, ranging from 2% for headquarters to 20% for clerks.
• 13%: Decrease in the number of non-career employees in just the past year after several years of relatively steady levels.
• 53,000: Projected decrease in full-time equivalents this fiscal year. That suggests another big cut in work hours for non-career employees.
• 36: Number of deliveries per hour in FY2009, up from 30 four years ago. Delivery operations are a productivity bright spot for USPS: There were 8% fewer career carriers but 4% more delivery points than there were four years ago.
• 13%: Decrease in number of mail pieces last year – including drops of 8% for Periodicals, 9% for First Class, and 17% for Standard.
• 223: Increase in the number of post offices, stations, and branches during the past year. At 36,946 facilities, the total has decreased by less than 1% in the past four years.
• -0.3%: The likely change in the average monthly Consumer Price Index for 2009, which sets the ceiling for annual increases in most postal rates and is used in determining some cost-of-living pay increases. Even before release of the October CPI, which was lower than a year ago for the seventh month in a row, postal officials had aalready announced they would not increase most rates in 2010.
• 25% to 30%: Projected decrease in paper consumption for JC Penney catalogs next year as a result of discontinuing its “big books”. No word on how much less its postage bill will be, but the move can’t be good news for the Postal Service.
• 1,869,168: Number of October 26 issues of Newsweek that were mailed in the U.S., down at least 600,000 from a few months ago and more than 1 million from two years ago. As it has reduced its circulation this year to match its lower ratebase, the weekly magazine has cut back drastically on free copies and low-priced subscriptions, according to a statement it filed with USPS. And its annual postage bill has also decreased by millions of dollars.
• 34%: The increase in U.S. credit-card solicitations during October versus the previous month, according to Mintel Comperemedia. That’s the first significant monthly increase this year, though October levels were still lower than a year ago.
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