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USPS introduces several new incentives for mailers alongside proposed price increases

Thu, 29 Jul 2010 14:00:00 GMT

USPS introduces several new incentives for mailers alongside proposed price increases
By:Mark Haslan
Overnight Prints

Earlier in July, the United States Postal Service announced plans to raise postal rates for the majority of its services. Should the proposal be passed, it would increase rates by around 6 percent, except for periodicals, standard mail parcels and media/library mail, which would grow by 8 percent, 23 percent and 7 percent, respectively.

Though the initiative is designed to help the failing USPS return to profitability, many businesses that rely on direct mail were understandably upset. In response, the organization has announced a series of incentives that will help drive down costs on some campaigns.

The first initiative, called the "Saturation Mail/High Density Incentive Program" gives businesses rebates on postage. Discounts of up to 22 percent of regular saturation postage and 12 percent of high-density mail postage will be given to all companies that send 5 percent more mailers in 2010.

Saturation mail is commonly used by business owners to reach the greatest number of consumers possible, especially if they are targeting local customers. With the service, businesses can target up to 90 percent of residential addresses or 75 percent of business addresses on a single carrier route.

Additionally, the Postal Service will launch the "Reply Rides Free" service for businesses that use transactional mail to deliver marketing messages. Under the program, if a reply envelope is included within a mailer, the sender will be charged a reduced amount.

Because transactional messages have the highest open rate of any mail type, many businesses include offers with them to maximize exposure. For example, retailers could include a special offer alongside an invoice to encourage consumers to make an additional purchase. With the Reply Rides Free service, business owners will be able to capitalize on this offer type.

These incentives, should they be passed by regulators, will go into effect on January 2, 2011, alongside the other proposals. The Postal Regulator Commission will decide whether to approve the new rates no later than October 4.

For businesses looking for more immediate discounts, the USPS is currently running its second annual summer sale. Companies that send more than 105 percent of the volumes they mailed last summer, the USPS will refund 30 percent of the shipping costs. The promotion runs through September 30.

29-Jul-10 10:00 AM

Some senators expected to block Postal Service's proposal to limit mail delivery

Thu, 29 Jul 2010 11:00:00 GMT

Some senators expected to block Postal Service's proposal to limit mail delivery
By Associated Press
Washngton Post

Sen. Jon Tester (D-Mont.) said Wednesday that senators who oversee the U.S. Postal Service's budget will block a proposal by the head of that agency to drop Saturday mail delivery.

Postmaster General John E. Potter has urged the change to five-day mail delivery, saying that the cash-strapped post office won't survive without such a fundamental change to its operations.

The Postal Service is expected to lose $7 billion in this fiscal year, which ends in September. Potter has warned that the agency will lose hundreds of billions of dollars over the next decade without Congress approving this and other changes.

But Tester said in a statement that he had persuaded the Senate financial services appropriations subcommittee to oppose five-day mail delivery. He said that eliminating Saturday deliveries would not produce the major savings that Potter forecasts, while it would surely be a hardship on people living in rural areas.

"Our proposal for five-day delivery is an important ingredient in the Postal Service's action plan to survive well into this century," said Gerald McKiernan, a Postal Service spokesman. "We would hope other members of the Senate will resist this proposal."

The agency cannot cut services without Congress's agreement.

To address its deficit, the Postal Service also wants to raise rates, to close or consolidate offices and to avoid annual prepayments for future retiree health care costs.

29-Jul-10 7:00 AM

USPS pitches print catalogs

Tue, 27 Jul 2010 11:00:00 GMT

USPS pitches print catalogs
By Frank Washkuch
DM News

The US Postal Service (USPS) is targeting e-commerce merchants with an integrated marketing campaign emphasizing the potential of print catalogs. The effort includes direct mail, webinars, instructional DVDs and web banner ads. The USPS created the campaign internally.

The “Getting Started in Catalogs” initiative emphasizes that companies can double online transactions and achieve revenue lifts of more than 100% by adding print extensions to their e-commerce operations. The DVDs feature testimonials from companies such as Zappos and Dell, which have translated online success to print catalogs.

“The goal is to convince or persuade companies that have relied on the Internet to grow their businesses through catalogs. Many have gotten to a point where growth is limited,” said Tom Foti, manager of marketing mail at the USPS. “What we found was that many companies who went beyond the traditional online model, such as Zappos or Dell, when they expanded into print, their businesses grew in ways they had not thought of.”

The direct mail element of the campaign, launched last month, incorporates Business Reply Mail.

The three webinars were scheduled for July 20, July 28 and August 24. The Postal Service will follow up with companies that express interest, said Foti.

The organization also created an informational microsite for the initiative. Businesses can request more information from the USPS and order informational DVDs on the site. The USPS is also running Internet banner ads in online retail publications “We see catalogs as a valuable part of the mail stream and an important part of what consumers want in their mailboxes,” said Foti. “There is a growth opportunity there. Although a lot of people see momentum going the other way, there is value in the consumer getting the catalog in the mailbox.”

The USPS, which saw a net loss of $3.8 billion last fiscal year, has asked the Postal Regulatory Commission (PRC) to allow it to enact several rate increases in 2011.

It has also asked the PRC and Congress for permission to reduce home delivery to five days per week. The possible service reduction has drawn the ire of catalogers and direct mailers, many of whom have said they will have to cut back on their mailing volumes as a result. The proposal has also drawn considerable blowback from the two major postal unions. The USPS has argued that the rate increases are necessary for restoringfinancial health to the organization.

Foti said that the USPS worked with the American Catalog Mailers Association (ACMA) before it launched the campaign to hear the industry's ideas on encouraging the use of catalogs.

Hamilton Davison, president and executive director of the ACMA, said that his group's goal for the initiative is to raise catalog volumes and lower mailing costs, and also to increase consumer interest.

“The more interesting catalogs there are in the mail, the more interested catalog buyers there are,” he said. “You get hooked on the things you find interesting and exciting and that makes you pay attention to everything in the mailbox.”

Davison added that e-retailers who have contacted the ACMA about launching catalogs are mainly trying to broaden their revenue streams.

27-Jul-10 7:00 AM

USPS highlights effectiveness of catalogs to businesses

Tue, 27 Jul 2010 11:00:00 GMT

USPS highlights effectiveness of catalogs to businesses
By: Mark Haslan
Overnight Prints

Direct mail is a robust marketing medium, with formats ranging from postcards to brochures, each with its own benefits. Now, the United States Postal Service is focusing on the sales potential of catalogs with a new initiative.

The campaign emphasizes the value of using catalogs to drive customers to businesses’ websites. According to the report, shoppers that receive direct mail from a company tend to spend more money per purchase. Direct mail recipients buy, on average, 4.1 items and spend $80 with a company, which is 0.8 items and $9 more than consumers who receive nothing. Companies that specifically used catalogs saw an even greater revenue lift, with customers spending nearly $20 more per purchase.

The USPS asserts that catalogs have the greatest influence on prospective customers, with 70 percent visiting companies’ web pages after receiving one. Catalogs were also found to discourage comparison shopping by more than 10 percent. Additionally, customers were more likely to shop for gifts on websites of companies they had received catalogs from.

Additionally, businesses can use catalogs to strengthen their brands. The USPS says consumers who have received catalogs are more satisfied with business websites and their overall shopping experiences, and many are likely to recommend the company to others.

The USPS is reaching business owners through direct mail, webinars, instructional DVDs and banner ads on the internet. The direct mail campaign was launched in June, while the webinars will be held on July 20, July 28 and August 24. Companies that express interest in generating new campaigns will be offered additional help from the Postal Service.

"The goal is to convince or persuade companies that have relied on the internet to grow their businesses through catalogs. Many have gotten to a point where growth is limited," Tom Foti, manager of marketing mail at the US Postal Service, told DMNews. "And what we found was that many companies who went beyond the traditional online model, such as Zappos or Dell, when they expanded into print, their businesses grew in ways they had not thought of."

The USPS’ new campaign comes in the middle of its second annual summer sales. As a part of the program, businesses that send more than 105 percent of the mail they did last summer will receive a 33 percent discount. In order to be eligible, companies must have sent at least 350,000 mailers in the summer of 2009.

27-Jul-10 7:00 AM

Affordable Mail Alliance to PRC: Dismiss Rate Hike Request

Tue, 27 Jul 2010 11:00:00 GMT

Affordable Mail Alliance to PRC: Dismiss Rate Hike Request
By Jim Tierney
Multichannel Merchant

The Affordable Mail Alliance today asked the Postal Regulatory Commission to dismiss the U.S. Postal Services exigent rate hike proposal filed on July 6. AMA’s motion argues that the rate hike--an average of 10 times the rate of inflation--violates the cost controls Congress put in place to protect consumers.

The Postal Accountability and Enhancement Act of 2006 (PAEA) limits the average postal rate hike to inflation as measured by the Consumer Price Index (CPI). There is an exception to the CPI cap for "exigent circumstances" when the USPS cannot continue operating without overall price increases above the CPI.

The estimated price cap is 0.6%, while the average exigent price increase is 5.6%. Standard Mail flats or catalog rates would go up 5.1% if the rate case is passed and increases are implemented Jan. 2, 2011.

According to AMA’s motion, the USPS has not met the exigent test for several reasons. For one, economic downturns are a part of life and not "extraordinary" or "exceptional" circumstances. What’s more, the trend toward Internet communications away from mail has been taking place over the past 15 years, giving the USPS years to prepare for the decline in volume.

And since the recession began in December 2007 and caused sharp decreases in volume and revenue, competitors such as FedEx and UPS have had comparable or even greater declines. Those companies made the necessary and painful cuts in operating costs and capacity to increase productivity. The USPS did not and its productivity has fallen.

Sen. Susan Collins (R-Maine), one of the authors of the PAEA, has said the proposed increases do not qualify for an exception under the standards established by Congress. Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association and member of the Affordable Mail Alliance, agrees, and says the case makes no economic sense.

Reasons for breaking the cap are not viable, Cerasale said during a conference call today. We believe the escape clause is for acts of God, Katrina, 9/11, Anthrax or something that disrupts the service of the USPS.

Cerasale, who noted the AMA has grown to 700 members in three weeks, said the AMA fears that if the PRC approves the exigent rate case, anytime during economic uncertainty the USPS could raise rates. This, he added would be the beginning of the end for the Postal Service.

More and more volume will go away if rates go up, Cerasale said. Our members can’t continue mailing with rate increases 10 times the rate of inflation.

FedEx and UPS both saw drops in revenue, some steeper than USPS, Cerasale noted, yet they cut costs in 2009 three to four times more than the USPS cut costs, and they’ve turned the corner and become profitable. We expect the Postal Service to emulate its competitors.

27-Jul-10 7:00 AM

How the U.S. Postal Service can save itself

Fri, 23 Jul 2010 11:15:00 GMT

How the U.S. Postal Service can save itself
By Paul B. Carroll and Chunka Mui
Washington Post

The debate over potential changes at the U.S. Postal Service is like a fight over the dessert bar on the Titanic. Raising first-class postage rates and eliminating Saturday delivery won't matter much when the Postal Service hits the iceberg. And USPS will do just that, soon, unless there is a reimagining of its mission.

First, the broad question must be asked: Should the federal government continue to compete against the private sector? The U.S. Postal Service has been losing money for years, whereas competitors FedEx and UPS are thriving.

If the government is to remain in the delivery business, it must develop a workable plan for the digital age.

The Postal Service projects deficits of $238 billion -- roughly the current gross domestic product of Portugal -- through 2020. Raising rates slightly and reducing delivery would make tiny dents -- and that's the best possible outcome; in the worst, the changes would accelerate the service's problems. Meanwhile, the debate obscures the fact that digital communications are fast eliminating the need for mail delivery.

To understand what could happen to the Postal Service, look at Kodak, whose 130-year history includes the kind of dominance that USPS long enjoyed. Even as the long-term threat from digital photography became clear in the 1990s, Kodak temporized. It tinkered with its traditional film, paper and chemicals businesses, never acknowledging that digital would all but eliminate them. Kodak continually predicted growth, even as it fell from being one of the most profitable companies in the world to one that's essentially worthless.

The Postal Service, too, is looking at the future as a variant of the present. USPS, convinced of the long-term need for physical mail delivery, has been relying on increases in volume, according to a Government Accountability Office report published in April. Yet delivery volume for first-class mail fell 22 percent from 1998 through 2007, tumbled an additional 13 percent last year and was down 3 percent in the first half of this year despite heavy mailings from the Census Bureau.

Step one in avoiding Kodak's fate is for the Postal Service to acknowledge that its future will have almost no connection to the present. Anything that can be conceived of as information will, in time, be sent electronically. The Internet is faster, cheaper and more convenient for the sender and the receiver.

E-mail has already supplanted letters, but that's just the start. More people will send money via PayPal or other electronic services rather than mail checks. As is increasingly the case, people will download their movies and books, check their bills online, receive information about their investments electronically, and so on.

USPS's future lies in things that need to be delivered physically: shoes, computers and other objects. On those items, the Internet can't compete, and USPS has assets that could let it take on UPS and FedEx (which, unencumbered by USPS's declining business, are in splendid shape; UPS reported Thursday that its second-quarter profit had nearly doubled, to $845 million, from a year earlier).

To build a workable future, USPS can't incrementally change its present. To span a chasm, you can't build a bridge one stick at a time. Instead, USPS needs to start with the future and work backward to the present. It needs to forecast volumes for all types of its business five, 10 and 15 years out and design a business model that will thrive under those scenarios. Only then can it figure out what radical changes need to be made now. In other words, USPS needs to first design the whole bridge, then build it.

USPS must also monitor its various projections in coming years to see if it -- like Kodak -- is being too optimistic. USPS must be ready to adapt.

Defenders of the Postal Service argue that it is changing as fast as it can. They note that it has cut costs by more than $40 billion since 2002 and has reduced employment by 130,000 people since 2007, to 600,000. Radical change will face opposition from unions, big customers and its congressional overseers, who will feel enormous pressure to take short-term measures to protect jobs and have long acted parochially in opposing the closing of post offices and other service changes that could affect constituents. Consider that even changing the number of days of delivery requires amending a congressional statute.

Yet, those arguments are simply not enough. General Motors argued for years that it was improving quality and cutting costs as fast as it could in the face of huge obstacles. The market didn't care. GM's top speed wasn't fast enough.

To avoid the fates of Kodak and General Motors, the Postal Service must learn from their failures. It must start by convincing Congress and other stakeholders that it is in the middle of a full-blown crisis. It can either lead change or be overrun by it.

Paul B. Carroll and Chunka Mui are co-authors of "Billion-Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years" as well as principals in the management consulting firm Devil's Advocate Group.

23-Jul-10 7:15 AM

Direct mail ad revenue is on the rise

Thu, 22 Jul 2010 11:00:00 GMT

Direct mail ad revenue is on the rise
By Mark Haslan
Overnight Prints

Mintel Comperemedia recently reported that direct mail volumes are on the rise, a sign that many businesses are renewing their marketing efforts after the economic recession caused many to focus on customer retention rather than acquisition.

Now, it seems this trend toward direct mail marketing will continue. A recent report from research firm MagnaGlobal indicates that direct mail will account for $19.17 billion in advertising revenue during 2010. This figure makes direct mail the top revenue generator tracked by the firm.

This indicates mailers defy the general slowdown of other forms of direct media, including Yellow Pages, directories, and lead generation. During 2008 and 2009, the category rose sharply, with direct media collectively accounting for more than 25 percent of ad revenues in the United States. However, in the first quarter of 2010, many of the sub-sectors showed slower-than-anticipated growth.

The slowdown could be parially due to larger corporations shifting to new media. MagnaGlobal notes that direct media is still used by small and mid-size businesses. Additionally, with congressional elections in November and the Olympics earlier in the year, television spend was up considerably, resulting in less marketing dollars being put into direct media.

MagnaGlobal projects that direct media growth will resume over the long-term as the economy continues to improve. Should the firm’s forecasts hold true, direct mail revenue will increase by nearly half a million in 2011 to $19.6 billion, accounting for 11.4 percent of total ad expenditures.

Meanwhile, the greater advertising industry is seeing a spectacular bounce back, with MagnaGlobal expecting media suppliers to generate $169.9 billion in revenues. In response, the overall ad industry is now predicted to increase by 2.1 percent. Earlier in 2010, MagnaGlobal had predicted a 1.6 percent growth. Television is the largest format, while online is on the rise as well.

For many consumers, postal mail largely influences their purchase decisions, which is why many business owners are increasing their direct mail budgets. A recent survey conducted by marketing firm Fleishman-Hillard found that postal mail is the most important source of information for many Americans, with 10 percent of U.S consumers deeming it "absolutely essential" or "extremely important." Additionally, the average consumer spends two hours per week on average reading direct mail pieces.

22-Jul-10 7:00 AM

Postal Service emphasizes value of catalogs to Internet retailers

Wed, 21 Jul 2010 12:00:00 GMT

Postal Service emphasizes value of catalogs to Internet retailers
By Frank Washkuch
DM News

The US Postal Service is targeting e-commerce merchants with an integrated marketing campaign emphasizing the potential of print catalogs. The effort includes direct mail, webinars, instructional DVDs and web banner ads. The USPS created the campaign internally.

“The goal is to convince or persuade companies that have relied on the Internet to grow their businesses through catalogs. Many have gotten to a point where growth is limited,” said Tom Foti, manager of marketing mail at the US Postal Service. “And what we found was that many companies who went beyond the traditional online model, such as Zappos or Dell, when they expanded into print, their businesses grew in ways they had not thought of.”

The direct mail element of the campaign, launched last month, incorporates Business Reply Mail.

The three webinars were scheduled for July 20, July 28 and August 24. The Postal Service will follow up with companies that express interest, said Foti.

The US Postal Service, which saw a net loss of $3.8 billion last fiscal year, has asked the Postal Regulatory Commission (PRC) to allow it to enact several rate increases for next year. It has also asked the PRC and Congress for permission to reduce home delivery to five days per week.

“We see catalogs as a valuable part of the mail stream and an important part of what consumers want in their mailboxes,” said Foti. “There is a growth opportunity there. Although a lot of people see momentum going the other way, there is value in the consumer getting the catalog in the mailbox.”

21-Jul-10 8:00 AM

Delivering the Future

Tue, 20 Jul 2010 15:00:00 GMT

Delivering the Future

U.S. Postal Service Update

PCC Insider

On March 2, when the Postal Service announced an ambitious action plan to ensure a viable Postal Service for the coming years, one message was crystal clear — there is no one answer to deliver the Postal Service from its current crisis. It has been four months and much has transpired. The Postal Service has published Update from the U.S. Postal Service on usps.com in Delivering the Future. Below is the Update which answers questions and comments about our plans for a revitalized USPS.

It’s being said that the current financial crisis the Postal Service is facing is a result of poor planning, and postal management should have seen this day coming long ago.

The Postal Service has achieved cost savings of $1 billion per year every year since 2001; in 2009 the cost savings reached $6.1 billion by reducing its workforce by the equivalent of 65,000 full time employees. In fact, it was able to reduce its career workforce from an all time high of 802,970 in 1999 to today’s 588,561, while focusing on improving service and growing postal products. The current economic crisis is historic and unprecedented, resulting in a 20 percent loss in mail volume in three years. We have been adjusting our operations and workforce to reflect declining volume loss.

Some are asserting that the current price increases the Postal Service has proposed are somehow illegal.

On March 2, the Postal Service unveiled its ambitious action plan for the future, a plan designed to ensure a viable Postal Service for the country well into the future. One element of that plan was a modest price change to become effective in early 2011. On average, the proposal calls for a 5.6 percent increase, clearly permissible under the “extraordinary or exceptional circumstances” clause of the law. This “exigent” rate case would have some classes of mail see somewhat larger increases than the average and this is intended to move those classes closer to covering their costs as is required by law. Clearly, over the long run, no organization can continue to sell a product at a loss and the Postal Service is no exception.

It’s also being suggested that we wouldn’t be in this fix if management had dealt with a bloated, overpaid postal workforce.

In 1999, there were 802,970 career Postal employees, compared to today’s workforce of 588,561 — a reduction of more than 215,000 employees. Salaries are set through collective bargaining agreements. In the absence of an agreement, the law requires that the two sides submit to binding arbitration. The Postal Service has been and will continue to address the cost of employee benefits through the collective bargaining process. For example, the Postal Service has reduced the employer contributions to health benefits by 1 percent per year for the life of the last collective bargaining agreement. Unfortunately, to date, we have been unable to effect a change in the law requiring that the financial state of the Postal Service be taken into account in interest arbitration awards. In the meantime, the Postal Service will continue to work with its unions to reach the best possible agreements for both parties.

Some are saying the Postal Service is not doing enough to structure its mail services to meet today’s changing needs.

Our action plan calls for continuing to modernize customer access by providing online services 24/7 and providing services at places more convenient to customers — grocery stores, pharmacies, retail centers, office supply stores, including Office Depot stores. Increasing and enhancing customer access through partnerships, self-service kiosks, and a world-class website, usps.com, while reducing costs also are underway. The necessary legislative and regulatory changes must be made to create the flexibility to introduce new non-postal products that reflect changing customer needs, generate needed revenue, and allow the Postal Service to compete more aggressively and fairly in the marketplace. Still, working within the confines of the existing law, we have been able to expand our partnership with eBay to include eBay China and we’ve offered volume incentives for Standard Mail and First-Class Mail to encourage new business and reward our long-standing customers. The Postal Service of the future will look different, but it will continue to drive commerce, serve communities and deliver value.

While acknowledging the action plan released on March 2, some think nothing’s happened.

We’ve been very busy. In the four months since announcing the action plan we are on track to eliminate $3.5 billion in costs and have identified necessary steps to erase $123 billion in expenses over the next 10 years. Efforts to expand access to postal products and services include a partnership with Office Depot for package services and with the U.S. Department of Commerce to streamline processes for small businesses to ship internationally. Revenue generating initiatives include two mail volume incentives to encourage growth in highly profitable saturation and standard mail. And the Postal Service filed a formal proposal with the Postal Regulatory Commission to move to a five-day delivery schedule and successfully moved a percentage of Post Office boxes into the competitive side of our business, allowing us to compete head on with UPS and private sector companies while providing new opportunities for customers. We’ve also created new opportunities for mailers to improve response rates on direct mail pieces by implementing standards for attachments. We added new options to increase the number of ways mailers can design booklets that are more appealing to recipients. Most recently, after working with the periodicals community, we expanded the content eligibility so that magazines could include supplements that reach an even broader customer base.

It’s been suggested that Postal Service should be broadening its customer base rather that increasing its prices.

The following initiatives have been announced or expanded since the beginning of March, when the Postal Service announced its action plan: an export agreement for shipping services with eBay China, pharmaceutical recycling through the mail with the U.S. Department of Veterans Affairs, expansion of the number of Post Offices accepting passport applications, launch of partnership with U.S. Department of Commerce targeting small- and medium-sized businesses to help them expand to international markets, “Reply Rides Free” incentive for marketers and advertisers who use First-Class Mail, expansion of the Saturation Mail incentive program to include High Density advertisers, as well as the Summer Sale for Standard Mail. RFPs are being sought today to help small- and medium-sized businesses more easily use and benefit from direct mail.

Some are saying that if the Congress would only fix the Retiree Health Benefit Fund prepayment, the Postal Service’s troubles would be over.

When on March 2, the Postal Service announced its action plan for the future, there was one message that was crystal clear: there is no one answer that would deliver the Postal Service from its current crisis. The Postmaster General was emphatic: it would take a suite of solutions to right the ship and position the Postal Service for future. A restructuring of retiree health benefit payments was one element but there was more: adjust delivery days to better reflect mail volumes and customer habits, permit the Postal Service to evaluate and introduce new products so that we can respond to changing customer needs, allow prices for mailing services to be based on demand for individual products, and yes, as discussed on March 2, a modest exigent price increase to be effective in 2011. A one- or two-year deferral of RHB is still insufficient to close the financial gap. Five-day delivery and the exigent case would still be necessary to stay within the borrowing limits.

The Postal Service shouldn’t think they’re prevented by Congress from closing money losing Post Offices; they should just close them and that goes for other redundant facilities as well.

In fact, the Postal Service is absolutely prohibited by Congress from closing Post Offices based solely on economic circumstances. Put simply: we cannot close Post Offices that don’t generate enough revenue to cover there expenses. There are 26,000 Post Offices with expenses that exceed revenue. The Postal Service is asking for legislative and regulatory change that would give us the authority to close these Post Offices. Until then, we will continue to modernize and expand customer access by providing services more convenient to customers — grocery stores, pharmacies, retail centers, office supply stores — and increase and enhance customer access through partnerships, self-service kiosks and a world-class website, usps.com, while reducing costs. In those instances where the Postal Service is given control over closing facilities, we have done just that. In 2009 alone, we closed nine Airmail Centers, transferring those operations to other facilities and completed the streamlined National Distribution Center delivery system. Almost 40 consolidations of Area Mail Processing plants have been completed and 22 more are in process.

20-Jul-10 11:00 AM

Mail Holds Own As Top DM Channel – For Now

Tue, 20 Jul 2010 15:00:00 GMT

Mail Holds Own As Top DM Channel – For Now
By Richard H. Levey
Direct

Direct mail will account for $19.17 billion in media supplier advertising revenue during 2010, making it the top revenue generator tracked by forecasting firm MagnaGlobal.

But combined spending on online direct and local digital marketing will reach parity with it this year, and will surpass it in 2011.

In 2010, total supplier ad revenue will amount to $169.1 billion, and direct mail will make up 11.3% of that, according to MagnaGlobal. At $15.4 billion, direct online will account for 9.1%. But local digital and online revenue is tracked separately. Add $3.7 billion from local digital, and online is estimated as generating only slightly less than mail.

If forecasts hold, 2011 will provide a watershed moment in which local digital and direct online ad revenue will total $21.1 billion, or 12.3% of the $171.2 billion in supplier revenue MagnaGlobal anticipates. In contrast, direct mail will account for $19.6 million, or 11.4% of total spending.

Online marketing’s increases come even with weakness in the online classified sector serving as an anchor, according to MagnaGlobal.

MagnaGlobal counts direct mail, online direct and directory spending, but not local digital, in its direct calculations. Last year, the $42.8 billion direct spending generated made up 26.2% of total supplier ad revenue.

The $43.6 billion foreseen this year will amount to 25.8%, but the anticipated $45.1 billion in 2011 will pull direct’s percentage back up to 26.3%.

Why the dip this year? Spending on the summer Olympics, combined with the congressional elections this November, will boost television revenue faster than direct response channels’ revenue. During 2010, local and national TV spending jumped to $53.84 billion from $50.57 billion.

MagnaGlobal’s predictions are based on several assumptions, including continuing, if unspectacular, improvements in the economy and no “double dip” recession.

20-Jul-10 11:00 AM

Postal Service, Commerce Department launch joint exporting program

Wed, 14 Jul 2010 11:00:00 GMT

Postal Service, Commerce Department launch joint exporting program
By Mark B. Solomon
DC Velocity

The U.S. Postal Service (USPS) and the U.S. Commerce Department on July 12 launched a program designed to increase market and shipping access for small to mid-sized U.S. businesses looking to begin exporting or expand their export activity.

The initiative, which was announced in February but not implemented until yesterday, calls for USPS and Commerce's International Trade Administration to support U.S. businesses that either do not export or that export to only one country.

The post office will manage the joint effort through its Global Business unit, which generated $2.3 billion in revenue in 2009, a small but growing component of USPS's total annual revenue of more than $68 billion. The program will initially focus on businesses that currently ship internationally with USPS, but will eventually expand to companies that may use other carriers for international shipping.

The joint effort is part of a comprehensive multi-agency effort to meet President Obama's goal of doubling the nation's exports over the next five years. Less than 1 percent of the nation's 30 million businesses are engaged in exporting, and of those, 58 percent export to just one market, according to Commerce data.

14-Jul-10 7:00 AM

“The Decision Part II”

Mon, 12 Jul 2010 15:00:00 GMT

“The Decision Part II”
By Jim Tierney
The Big Fat Marketing

“The Decision Part II” might not be nationally televised as last night’s LeBron Jamesathon was on ESPN.

But “The Decision” resting on the shoulders of the Postal Regulatory Commission on Oct. 4 could very well send shock waves throughout the multichannel merchant world.

Catalogers would receive a 5.1% increase in postage if the U.S. Postal Service’s proposed exigency rate case is approved by the PRC. The USPS is in a horrible financial state, losing billions of dollars a year, with five-day delivery a distinct possibility.

If Congress waives the Postal Service’s annual $5.5 billion payment for retiree health benefits before its scheduled Sept. 30 adjournment, Steve Kearney, senior vice president, customer relations for USPS, has said withdrawing the exigent rate case “might be something to consider.”

The backlash against this exigent rate case was strong and immediate. Many industry experts questioned the legality of it in March when it was first announced by the USPS.

Jim Cregan, executive vice president of government affairs for the Magazine Publishers of America, and member of the newly formed Affordable Mail Alliance, said if the PRC approves the rate case, the USPS would “accelerate its own death spiral just when the industry and the economy are beginning to get up off the floor. It’s bad for all concerned.”

Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association and member of the Affordable Mail Alliance, said there is a legal CPI cap on postage rates and the “USPS wants to break that cap and by 10 times the rate of inflation.” Cerasale said a “reasonable” increase would be at or below the cap, which is less than 1%.

Most detractors don’t believe the USPS has done enough internally with excess capacity, and taking a hard look at management positions.

What the USPS calls “moderate and reasonable” increases, those on the other side call short-sighted and unreasonable.

PRC Chairman Ruth Goldway became the head of that panel less than a year ago and now she and her colleagues face a “decision” that will receive thorough scrutiny during the 90-day process, and one that will affect millions of merchants throughout the U.S.

Come Oct. 4, Goldway might not have booked the Boys & Girls Club in Greenwich, CT, Jim Gray might not be sitting in a chair ready to interview her live on ESPN, and media outlets might not be following this story around the clock from mid-September on, but rest assured the PRC will be in the spotlight as millions of mailers across the country will be anxiously awaiting its “Decision.”

12-Jul-10 11:00 AM

Northern Virginia EXFC Performance Soars

Patrick Murphy — Fri, 09 Jul 2010 11:00:00 GMT

Northern Virginia EXFC Performance Soars

NOVA PCC

Deputy Postmaster General and Chief Operating Officer Pat Donahoe recognized Northern Virginia EXFC performance during the latest Field Updates broadcast. During the past 4 weeks Northern Virginia EXFC performance was ranked among the top 5 clusters in the nation.

“These results demonstrate the commitment of our employees to provide customers with the service they have come to expect in Northern Virginia,” said District Manager Michael Furey.

External First Class Mail measurement system (EXFC) performance has long been the most visible indicator of the Postal service performance for residential and commercial customers. The Postal Service posts EXFC performance results quarterly on www.usps.com.

The external sampling system measures the transit time─ the time it takes from deposit of mail into a collection box or lobby drop box until the time it is delivered to a home or business─ and compares this transit time against the standards for each First Class service category.

Northern Virginia Priority Mail was also ranked in the top 5 category achieving 96.22 on time performance.

9-Jul-10 7:00 AM

Why higher postal rates are good for the economy, businesses and consumers, and the environment.

Thu, 08 Jul 2010 13:00:00 GMT

Why higher postal rates are good for the economy, businesses and consumers, and the environment.
By Daniel Gross
Newsweek

The U.S. Postal Service, confronting a $7 billion loss in 2011, has requested a 2-cent increase in first-class postage. Since the increase will only erase part of its deficit, the USPS is considering other cost-savings measures, including ending Saturday delivery. The news has generated a predictable response from organizations and businesses that depend on cheap mail. "Consumers everywhere will pay more for the letters and packages they need to send; businesses—large and small—will suffer and even more jobs will be lost," complained Tony Conway, executive director of the Alliance of Nonprofit Mailers and designated spokesman for the Affordable Mail Alliance. The alliance's membership includes the Magazine Publishers of America, of which my employer, Newsweek, is a member; Time Inc.; paper companies; direct marketers; and the Envelope Manufacturers Association.

At the risk of biting one of the hands that feeds me, I'd argue that the increase isn't so much a job-killing tax as it is a good start. The financial collapse of 2008 and the deepest recession in several generations has set off a widespread re-examination of how consumers pay for many essential goods, services, and experiences. Technology and large-scale economic trends are forcing and enabling what I call the repricing of America—from auto insurance (now available by the mile) to rental cars (now available by the hour), from government services (taxes are going up) to online content (meters and pay walls are coming in). There's no reason mail should be any different.

When the U.S. Postal Service loses money, it's effectively subsidizing inefficient business models and operations. And less mail would be better for the economy, better for businesses and consumers, and better for the environment. (Here's an experiment: Don't open your mail for a week; put it in a box, and then go through it. What percentage of it is stuff that you wanted to receive or asked for?) So rather than complain about the rising cost, power mail users should do what others do when the price of any resource rises—figure out how to use it more efficiently. Businesses have to get smarter. And many uses of today's mail simply aren't smart.

If postage rates were higher, direct marketers would be more judicious about the volume of junk mail they send. Couldn't Pottery Barn offset the cost of higher postage by sending us one catalog every month instead of the two identical ones they've been shipping for the last several years? Couldn't Home Depot, which I've never patronized, save a few pennies by ceasing to send the mailers addressed to my house's previous owner, who moved out eight years ago? How about all those baby-product vendors whose offers I receive on a weekly basis? Surely their sophisticated data-mining techniques can tell them my kids are approaching their teens.

Or consider billing. I continue to be amazed by the number of service providers who still send out bills by mail and demand to be paid with a check sent back through the mail. Someone who mails a monthly bill instead of e-mailing it is imposing a $10.56 annual cost on himself and his customer just for postage—not to mention the cost of paper, envelopes, checks, and processing. Why can't my electric utility company, which is so concerned about energy efficiency, simply e-mail me my 14-page monthly bill instead of printing it out and sending it through the mail? If sharply higher rates spur more people to adopt electronic billing and bill payment, it would be a boon to the economy.

As for magazines, yes, raising their postage rates would certainly be kicking them while they're down. But magazines have long had a business model that relied on discounting circulation and then relying on cheap mail and generous advertisers to turn a profit. That model is changing, in large measure because advertisers are looking elsewhere. The emerging preferred business model for print publications is a healthier balance between circulation and advertising revenues. The reality: If you want content delivered on paper to your home, you're going to have to pay more for it. A hike in postage rates will give magazines a convenient excuse to do what they need to do anyway.

I understand that the increase in postage rates can impose a hardship and extra cost on nonprofits and charities. And I understand that expecting older people and those with less means to adopt computer-based payments isn't entirely realistic. But 10 years from now, mail won't be nearly as important or vital as it is today. Already, the best way to deliver social-welfare benefits isn't through checks sent in the mail, it's through smart cards. And for those with computer access, e-mail is essentially free. In the future, the best way to deliver cash benefits to people without bank accounts or computers will be through mobile phones.

8-Jul-10 9:00 AM

How Postal Rate Hikes Foretell America’s Future

Thu, 08 Jul 2010 11:00:00 GMT

How Postal Rate Hikes Foretell America’s Future
By Rick Newman
US News and World Report

The post office isn't obsolete yet, but it will be soon if Congress continues with business as usual. And if Congress can't fix the postal service, it's a grim indicator of its ability to rein in the national debt, curtail runaway entitlement spending, or get the economy back on track.

The U.S. Postal Service wants to raise the price of a stamp by 2 cents to 46 cents—a 4.5 percent increase. But it needs to do a lot more to join the 21st century. Postmaster General John Potter also wants to eliminate Saturday delivery, close low-volume post offices, open new outlets in shopping centers and other places where people normally shop, and broaden the merchandise beyond just shipping supplies. Imagine, for example, a vending machine selling snacks at the venerable post office. Far out.

Those are reasonable moves for an institution that's about as healthy as General Motors was before it declared bankruptcy. The physical delivery of mail is a "legacy" business in decline, thanks to email, texting, online banking, and the fading need for anything on paper. On its current course, the postal service is expected to lose $7 billion over the next year and $238 billion by 2020. That's a catastrophic deficit, nearly twice what the government has spent so far to prop up two other failed government enterprises, the mortgage agencies Fannie Mae and Freddie Mac.

Yet modernizing the postal service is a Gordian challenge that highlights the worst parochialism in American politics. The postal service is a government creation that tries to act like a corporation, yet has to abide by rules that virtually guarantee it will lose money. It's required to deliver mail to every address in America six days a week, even if the daily delivery constitutes nothing more than fliers for furniture sales. It can't lay off workers or close money-losing outlets, no matter how bad its finances. Big changes require Congressional approval, which gives lobbyists for the postal workers' union, publishers, direct-mail advertisers, and even competitors such as UPS and FedEx an inordinate amount of control over the agency.

The postal service is now facing a crisis that's a microcosm of what's coming in other parts of the government. It simply can't provide the service that Americans have come to expect without a stark increase in prices. So we'll have to make a choice between lower service levels or higher costs. This is the same choice we're going to have to make about Social Security, Medicare, welfare, road construction, education, and even basic services such as fire and police coverage. Americans have gotten used to a high degree of government service financed by borrowed money, a bubble economy, and six decades of prosperity that ended with the Great Recession. The future will be more austere.

Solutions to the postal service's budget problems are within easy reach. Consolidating post offices seems like an obvious start. It would inconvenience some, but on balance it's necessary for a healthier system. Five-day mail delivery would require a few adjustments but would hardly be revolutionary. In a study commissioned by the postal service, consulting firm McKinsey & Co. even suggested three-day delivery as a solution to the agency's budget problems. Other changes could involve steeper price hikes, slower delivery for some letters, and delivery that stops at "cluster boxes" instead of each individual mailbox. If the postal service were truly a private corporation, the board of directors probably would have insisted on such changes the moment the profit margin started to shrink, and we'd all be used to them by now.

The price hikes for stamps and other kinds of postage are likely to go into effect by January. But that will only cover about one-third of the gap in the postal service's annual budget, which means bigger changes are likely to come before Congress in coming months. Congress could use that debate as a warm-up for tougher decisions it won't be able to put off much longer. To close the gap in Social Security funding, for example, the government could defer payments by raising the retirement age, hike payroll taxes on younger workers, or simply cut benefits paid to those who feel they've earned them. None is satisfying, yet something has to be done. The same questions apply to Medicare. And the national debt will have to be reduced through some combination of new middle-class taxes and deep cuts in most government services. Compared to that, postal reform should be easy, right?

Consumers could benefit from the postal debate, too. If we're realistic about the tradeoffs between costs and services in an era when government revenues have plunged, then it makes sense to accept a compromise that still provides decent service at reasonable prices. That's the kind of public attitude that will be needed to solve much bigger—and more emotional—challenges. But if we're still addicted to fantasy funding, then there will be an outcry over cutting mail delivery by a day and making us drive farther to get to the nearest post office. Members of Congress will posture and fulminate and provide just enough cover for the postal service to muddle through for another year. Then we'll have the same charade over the next underfunded government program, and the one after that. The check, unfortunately, is not in the mail.

8-Jul-10 7:00 AM

Post office proposes raising stamp price

Thu, 08 Jul 2010 11:00:00 GMT

Post office proposes raising stamp price
By Marisol Bello
USA Today

The U.S. Postal Service wants to raise the price of a first-class stamp by 2 cents to 46 cents to avoid running out of cash next year, officials said. A sharp decline in mail volume, the recession and increased use of the Internet to pay bills have contributed to a financial crisis.

On Tuesday, postal officials proposed mitigating the problem with an average 5.6% increase on a range of services that include first-class mail, advertising mail, periodicals and packages. The increase, about 13 cents a month for the average household, would go into effect Jan. 2.

"It really comes down to potential financial insolvency," said Stephen Kearney, the agency's senior vice president of customer relations. "We've never seen anything like this."

Mail volume dropped 20% from the first quarter of fiscal 2007 through the second quarter of fiscal 2010, worse than the declines after 9/11 and the anthrax attacks in 2001, he said.

The post office receives no public money and relies on the sale of postage, products and services.

Under a 2006 law, the agency can not raise rates higher than the rate of inflation, which is .6%. However, the law allows the agency to cite extraordinary circumstances if it seeks higher price increases.

The Postal Regulatory Commission, which oversees the service, has 90 days to vote on the proposal.

Maine Sen. Susan Collins, the ranking Republican on the committee that oversees the agency, said, "The Postal Service's plans to hike rates so substantially … may well produce a death spiral of fewer customers and ever declining volume."

About 200 non-profits, retailers and publishers that rely on mail service have formed the Affordable Mail Alliance to fight the increases. Jim Cregan, of the Magazine Publishers of America and an alliance member, said, "This is going to be a huge whack on the bottom-line for publishers."

8-Jul-10 7:00 AM

Postal Service Proposes Price Changes

Tue, 06 Jul 2010 16:00:00 GMT

Postal Service Proposes Price Changes

United States Postal Service

WASHINGTON — A new Forever Stamp image will be available as part of a pricing package that would add less than 13 cents a month to the average American household’s budget.

The U.S. Postal Service Governors recommended increasing the price of a First-Class stamp 2 cents to 46 cents and authorized the production of a pane of four evergreen tree branches as the newest image for Forever Stamps. The price of a postcard would increase 2 cents to 30 cents.

The Postal Regulatory Commission must approve the recommended price changes. The increases would not go into effect until January 2, 2011. It would be the first stamp price increase in almost two years.

Holiday Evergreen Forever Stamps will be available to the public in October at the current rate of 44 cents. Once purchased, the stamps are valid literally forever – despite any future price changes. No additional postage will ever be needed.

Faced with plummeting mail volume traced to the recession and increased use of the Internet, the Postal Service is projecting a deficit of nearly $7 billion for the next fiscal year. Despite eliminating millions of work hours and reducing expenses by more than $1 billion every year since 2001, a budget gap remains.

The proposed price changes, if approved, will raise about $2.3 billion for the first nine months of 2011. Postmaster General John E. Potter said he does not want customers to bear the burden of dramatic price increases. Instead, Potter announced in March that pricing would be one in a series of solutions the Postal Service is pursuing to become financially sound.

"There is no one single solution to the dire financial situation that the Postal Service faces," Potter said. "These proposed rate adjustments are moderate and part of a fair and balanced approach to insuring mail service for all Americans well into the future."

Other actions outlined in March included changes to delivery frequency, restructuring prepayments of retiree health benefits, creating a more flexible workforce and expanding access to products and services to places more convenient to customers.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

No prices will change before 2011. Additional information on today’s filing can be found on http://www.usps.com/communications/newsroom/deliveringfuture/prices.htm.

6-Jul-10 12:00 PM

Incentives Included in Price Filing

Tue, 06 Jul 2010 16:00:00 GMT

Incentives Included in Price Filing
United States Postal Service

WASHINGTON — Volume discounts and free additional weight are included in the proposed price changes the U.S. Postal Service filed with the Postal Regulatory Commission (PRC) today.

Price changes for the majority of products and services fall between 4 percent and 6 percent. These products and services account for about 90 percent of Market Dominant revenue. The Postal Service Governors approved the recommendation for prices for all 18 Market Dominant products.

Products outside the range include Periodicals (8 percent), Standard Mail Parcels (23 percent) and Media/Library Mail (7 percent). The increases above the average are intended to improve the financial performance of products that currently do not cover costs while limiting the impact on customers.

The filing includes two incentives designed to retain and grow profitable mail volume: "Reply Rides Free" and "Saturation Mail/High Density Incentive Program."

Reply Rides Free encourages the use of bill and statement mailings for marketing messages. For qualifying customers, a 1.2-ounce piece is charged the 1-ounce price if a reply envelope or card is included in the mailing.

The Saturation Mail/High Density Incentive Program provides rebates for volume growth for Standard Mail and Nonprofit Mail letters and flats. A minimum of six Saturation/High Density mailings in a Fiscal Year is required.

If approved as proposed, the new prices would take effect on Jan. 2, 2011 – almost two years since the Postal Service last raised rates.

The proposed price changes would generate $2.3 billion for the last three quarters of the 2011 Fiscal Year (January to September) and an estimated $3 billion for the full 12 months of Fiscal Year 2012.

Despite eliminating millions of work hours and reducing expenses by more than $1 billion every year since 2001, a budget gap remains. The proposed price increases will help close a $7 billion projected shortfall in FY 2011. The Postal Service would have needed to raise rates an average of 20 percent across all product lines to completely close that expected gap.

"This proposal is moderate and reasonable and carefully evaluated for its effect on our customers," said Maura Robinson, vice president, Pricing. "Increasing prices will help overcome some of the financial challenges faced by the Postal Service. We will continue to work with Congress and other stakeholders to implement long-term solutions."

Postmaster General John E. Potter identified in March a number of actions the Postal Service will pursue, including a change to delivery frequency, expanded access to products and services more convenient to customers and restructuring prepayment of retiree health benefits. Potter was clear at the time that customers would not be asked to close the entire budget gap.

Innovations like Reply Rides Free and Saturation Mail incentive programs reinforce the value of mail, help retain volume and provide opportunities to grow the business. These products also have proven to cover their costs and contribute much needed revenue to the Postal Service. Still, greater product and pricing flexibility is needed if the Postal Service is to remain a vital driver of the American economy.

"Future price increases can be greatly alleviated if the Postal Service is given the tools necessary to be a more flexible, market-oriented company," Robinson said.

Other highlights from the price filing include:

First-Class Mail stamps would increase to 46 cents. A new Forever Stamp image will be available in October.

First-Class Mail postcard prices would increase 2 cents to 30 cents.

Periodicals would receive an 8 percent increase.

Recommended increase for catalogs is 5.1 percent.

Standard Mail parcels would increase about 23 percent.

This is the first time the Postal Service is requesting price increases above the rate of inflation, an action that is allowed under the 2006 Postal law as long as the Postal Service can demonstrate "exceptional or extraordinary circumstance."

An ongoing recession that has rocked the Postal Service business customer base, continued movement toward electronic alternatives and unprecedented volume loss have created a situation where the price cap of 0.6 percent, based on the Consumer Price Index, is insufficient to cover the extraordinary losses.

The PRC has 90 days to review and make a final ruling on the filing (on or about Oct. 4). The PRC can accept or reject all price requests.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

More detailed information on the price filing is available at http://www.usps.com/prices.

# # #

Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at www.usps.com/news.

6-Jul-10 12:00 PM

USPS is 'most trusted government organization'

Fri, 02 Jul 2010 10:00:00 GMT

USPS is 'most trusted government organization'
By Paul Newman
Experian QAS

The United States Postal Service (USPS) has been announced as the most trusted government agency by the premier privacy trust study.

For the sixth consecutive year, USPS has managed to triumph over 75 federal organizations, with the US public trusting it to keep their information safe and secure.

According to the results of the study, the government-run agency managed to improve on its previous privacy trust score - which is currently 87 per cent.

Delores Killette, USPS' consumer advocate and vice president, said that having public trust was a vital component of offering a high level of service. "It is the cornerstone of our mission to deliver reliable and affordable mail service to every American, as well as a great source of pride for postal employees across the country," she added."This survey clearly demonstrates that Americans continue to trust and depend on the Postal Service to protect their privacy."

Meanwhile, the postal service is expected to post a net loss of $1.9 billion for the six months leading up to March.

2-Jul-10 6:00 AM

Study: Postal Service overpaid retirement fund by $50B

Fri, 02 Jul 2010 10:00:00 GMT

Study: Postal Service overpaid retirement fund by $50B
By Frank Washkuch
DM News

An independent study authorized by the Postal Regulatory Commission has found that the financially struggling US Postal Service has overpaid its Civil Service Retirement System benefits by at least $50 billion.

The PRC authorized The Segal Company, an actuarial and consulting firm, to prepare the report on possible USPS overcharges. The inquiry found that “an adjustment of $50 billion to $55 billion would be equitable.”

The Office of Personnel Management, which is responsible for calculating the USPS' pension liability, must reconsider its calculation of the Postal Service's pension assets in light of the report, according to the PRC. OPM must then submit those results to the PRC, the Postal Service and Congress, the PRC said.

The PRC also suggested that Congress could alter the schedule for potential transfers from the Postal Service Retirement Fund to its Retiree Health Benefit Fund.

The PRC is also studying the Postal Service's proposed move to five-day-per-week home delivery as part of its plan to restore financial stability. The USPS saw a net loss of $642 million in May, and a net loss of $3.8 billion for its 2009 fiscal year, which ended September 30, 2009.

Joanne Veto, senior manager of PR and promotional communications at the Postal Service, said via e-mail that the PRC study confirms the USPS has overpaid its pension responsibilities.

“We hope Congress takes this report into consideration as it continues to debate our request to restructure prepayment for retiree health benefits as part of a series of actions the Postal Service has taken to address its current financial situation,” she said. “These include changing delivery frequency, expanding products and services to places more convenient to customers and greater flexibility to reflect a changing, dynamic marketplace.”

Sen. Tom Carper (D-DE) also lauded the report's results in a statement.

“This discovery couldn't have come at a better time, as the Postal Service is facing a serious financial crisis. In fact, the overpayment the Postal Regulatory Commission has identified represents less than 25% of the Postal Service's projected long-term budget deficit,” he said. “That said, this is certainly a helpful development that will give Congress some assistance as we work to provide the Postal Service with much-needed relief from the overly aggressive retiree health funding scheduled that was placed on in 2006.”

The USPS said in January that its current system of funding its Civil Service Retirement System pension responsibility resulted in the agency overpaying by $75 billion from 1972 to 2009, according to its Office of Inspector General.

The issue has also become a political football. Ruth Goldway, PRC chairman, told members of Congress in April that they should fix the USPS' retiree health benefit payment system before turning their attention to five-day delivery. Leaders of the two major postal unions have also stated that possible pension overpayments are the biggest financial hurdle the USPS faces.

2-Jul-10 6:00 AM