Postal Affairs Blog

During a press conference on September 15, 2011, the United States Postal Service® (USPS®) announced plans to greatly reduce its current network of processing facilities. The number of processing facilities could be cut by as much as half, which equates to approximately 250 facilities. This would result in a 50% reduction of mail processing equipment and a possible reduction in workforce of up to 35,000 employees.

This move would save the USPS approximately $3 billion per year. The USPS is experiencing substantial drops in mail volume and revenue, and has been implementing a number of cost-cutting measures. Postmaster General Pat Donahoe cited in the September 15, 2011 press release, “Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion.”

Making these types of reductions would obviously have an impact on the level of service, so the USPS is also proposing to adjust the First-Class Mail® delivery standards from the current 1-3 day range to 2 to 3 days. The USPS published a Federal Register Notice on September 15, 2011, detailing the plans for the adjustment in the delivery standards.

Donahoe also noted during the press conference that this move is based strictly on the need to cut costs in the current financially challenging period the USPS is facing, and has no reflection on the dedicated USPS employees commitment to service.

Stay tuned for further developments regarding this announcement. This process will require a great deal of study and will undoubtedly become politically charged as members of Congress try to save postal facilities (and jobs!) located in their districts.

For all the details, visit the new USPS web page  introduced just for this topic.

This week at the Mailers Technical Advisory Committee (MTAC) meetings, the USPS announced that due to the ever-increasing decline in First-Class Mail volumes – and since their processing and distribution network was built around First-Class Mail – they plan to undertake another network re-alignment (I say “another” because they just re-aligned into the NDC structure) and drastically reduce the number of processing facilities from the current 508 to less than 200.  The Postal Service wants the re-alignment to begin in the February/March 2012 timeframe – and to be complete by the end of calendar year 2012.

Yes.  That’s right. Nothing written above is a typo. The Postal Service wants to eliminate over 300 processing facilities in the course of 9 – 10 months during 2012.  Welcome to the biggest “what the …?!?!” moment of MTAC this week.  Oh, I would also be remiss if I did not mention that they announced that due to this re-alignment, they see the First-Class overnight service standard disappearing, too.

Now, I do have to say that there are a number of very good reasons for this, including achieving tremendous cost reductions and improved efficiencies in the use of their automation machines (there are a lot of DPS machines that are currently only being used 5 or so hours a day – this number should be up around 20 hours a day). 

There is a lot more to come from this, and all the industry publications will be chock-full of this information.  But, check back here, too!

There isn’t a better time to start paying attention to what’s going on with the USPS than right now!

- Wallace Vingelis  (wvingelis@windowbook.com)

The Postal Service made final clarifications on non-profit eligibility, commingled mail procedures and the usage of Postal Wizard for their Summer 2011 Mobile Barcode Promotion.

Access all the latest and final information here: https://ribbs.usps.gov/index.cfm?page=mobilebarcode

Wallace Vingelis

Vice President, Business Development & Marketing

Window Book, Inc.                

Phone:  (617) 395-4569

email:    wvingelis@windowbook.com

Mailing industry leaders met with USPS PMG Pat Donahoe this morning where he announced that the Postal Service plans to file an inflation-based price increase request this afternoon.  The proposed implementation date will be April 17, 2011. 

They will seek an overall increase of 1.741% increase.

First-Class Mail will see an overall increase of 1.7%, but the $0.44 Forever stamp will remain unchanged.

Standard Mail will also see a 1.7% increase.  Letters will go up by 1.8%.  Flats will go up 0.8%.  The big hit in Standard are Parcels and NFMs, which will go up 11.3%.

USPS officials also announced that the May 2011 implementation date for switching to Intelligent Mail barcodes to qualify for automation rates is being pushed back, however, no new date has been announced yet.

More to follow after the filing!

Wallace Vingelis

Vice President, Business Development & Marketing

Window Book, Inc.                

Phone:  (617) 395-4569

Fax:        (617) 395-5969

email:    wvingelis@windowbook.com

URL:       www.windowbook.com

The new Postmaster General Patrick Donahoe announced a new USPS® organizational structure on Friday, January 7, 2011. The goal is to have a flatter, leaner structure to be more efficient. Some of the changes include:

• Developing both market dominant and competitive products is now the responsibility of one office, the Vice President of Domestic Products. Where those products are sold–in retail, on-line, or in alternate spaces—become the responsibility of the Vice President of Channel Access.
• All customer interaction and support, whether for large corporations, small businesses, or individual consumers, will be the responsibility of the Vice President of Consumer and Industry Affairs. The Consumer Advocate remains a vital part of customer service and will report to this officer.
• The engineering technology and systems that keep mail moving and prepare the Postal Service for the future of mail, including Intelligent Mail®, will become an integral part of the Information Technology Department.
• All human resources functions will be led by the Chief Human Resources Officer, supported by the Vice Presidents of Labor Relations and Employee Resource Management.
• We will continue our leadership role in greening the Postal Service and the mailing industry with the creation of a Chief Sustainability Office, reporting to the Deputy Postmaster General. As we push to improve our profitability through cross-functional initiatives, a strategy team within the Finance Department will play a primary role in coordinating these efforts.

Donahoe also announced the closure of the Southeast Area Office. All previous Southeastern Districts will now report to the Southwest Area Office, with two exceptions: The Tennessee District will report to the Eastern Area and the Atlanta District will report to the Capital Metro Area.

The announcement also mentioned that some organizations will not continue under the officer structure that was announced, and that this information would be shared as appropriate. The announcement also indicated that a larger process of streamlining the organization is underway, including the closure of some Districts. The USPS plans to use Reduction in Force (RIF) and Voluntary Early Retirement (VER) processes as part of this initiative, which should begin by the end of the current fiscal quarter.

For an updated listing of the USPS officers, log on to the Postal Leadership area of the USPS web site, where an updated organization chart is also available.

Along with the announced price changes for the USPS competitive products (e.g. Express Mail, Priority Mail, Parcel Select, etc.), the USPS is also offering several pricing initiatives (Reply Rides Free and Saturation and High Density Standard Mail), all of which result in format changes to many postage statements. These postage statement changes are effective with the implementation of the new rates on January 2, 2011. However, since the information regarding the format of the revised postage statements was not published until just recently, the USPS has communicated plans to provide extensions until January 28, 2011 for mailers not able to produce the new format postage statements by January 2. This information was communicated in a notice published to members of the Major Mailers Association, the text of which is shown below:

The headquarters Business Mail Acceptance has developed the following plan for customers who will not be able to present the new postage statement on January 2, 2011:

- The field BMEUs will be notified to continue accepting the old postage statement from customers that cannot make the change by Jan 2nd, and continue to do so until Jan 28, 2011 if necessary. No exception request will be needed for customers who expect to be capable of producing the new postage statements by Jan 28th.

- The old postage statement covers existing products only and does not include new package products such as Critical Mail and Regional Rate Boxes. Any customer using products that are not included on the old postage statement must complete a hardcopy postage statement for those products until they are capable of producing the new mailing statement.

- The BMEU staff will maintain a questionnaire for each of the customers that continue to use the old statement with the primary purpose of ascertaining when the customer will be able to comply and produce the new postage statements.

- Customers that do not anticipate meeting the Jan 28th cutoff date for accepting the old postage statements will need to request an exception through the normal exception process and the local BMEU will assist with that process.

- No postage statement is created for eVS manifest mailers consequently no process change will be required unless an existing eVS customer is using a new product. Any eVS customer mailing one of the new products available after Jan 2 that cannot complete the new postage statement should work one on one with their Strategic Account Manager or Business Alliance Manager to ensure a seamless acceptance process.

Due to the short time frame, it is not expected that the USPS will publish this as an “official notice” so mailers should work with their local Business Mail Acceptance offices if they need to take advantage of the extension.

Mailers are strongly encouraged to implement the new postage statements as soon as possible as it is very costly for the USPS to support both old and new postage statements.

From the October 26, 2010 DMM Advisory:

Postmaster General John E. Potter to Retire

To Be Succeeded by Deputy Postmaster General Donahoe

WASHINGTON — After nearly 10 years as U.S. Postmaster General and CEO of the U.S. Postal Service, John E. Potter today announced that he will retire on Dec. 3, after 32 years of service.

The Governors of the Postal Service named Patrick R. Donahoe, currently Deputy Postmaster General and Chief Operating Officer, to succeed Potter.

A New York City native, Potter is credited with modernizing management, introducing long-term, strategic thinking necessary in a complex and changing marketplace, and transforming the Postal Service into a service-driven customer-focused and cost-sensitive organization.

Potter’s accomplishments include:

• Eliminating more than $20 billion in costs during the last 10 years, with cumulative savings of more than $50 billion.
• Building a leaner, more flexible workforce and increasing efficiency and productivity through technology and the expansion of automation in mail processing and delivery.
• Reducing career employment from 787,000 positions in 2001 to about 584,000 today through attrition, using strong and focused management practices.
• Leading the Postal Service and the nation through the anthrax terrorist attack following 9/11.
• Creating a 10-year action plan that is a blueprint for necessary operational, legislative and regulatory changes to the current business model to ensure a viable Postal Service for decades to come.

Potter expressed his pride in the performance of the men and women of the Postal Service, saying its accomplishments resulted from the thousands of employees who dedicated themselves to meeting customer needs in a rapidly changing technological and communications environment.

“I fully appreciate their support in maintaining the tradition of trust that dates back to Benjamin Franklin and the founding of our nation,” Potter said. “It is our people that define our organization and it is their dedication and sense of purpose that drives our business.”

Louis J. Giuliano, Board of Governors chair, noted Potter’s many accomplishments in thanking the Postmaster General for his years of service.

“You have been a steadying and far-sighted leader throughout a period of dynamic change in America’s use of the mail and during times of economic uncertainty,” Giuliano said. “The hallmark of your success was your ability to build respectful relationships with all stakeholders, customers and employees that built a trusted level of credibility. We unreservedly regard your tenure as one of great accomplishment.”

Donahoe, currently Deputy Postmaster General, will become the 73rd Postmaster General in December. Potter credits Donahoe and his entire service team with regularly exceeding demanding performance goals and setting new records for on-time delivery and operational efficiency.

Donahoe began his career as a clerk in Pittsburgh in 1975, and in 2001, became responsible for all facets of mail operations, including processing delivery, retail, engineering, transportation and facilities. He has served in a variety of senior management positions in operations and human resources before becoming Deputy Postmaster General in 2005.

Giuliano cited Donahoe’s outstanding performance as one of the main reasons the Board chose Donahoe to build on the Postal Service’s achievements and lead the organization through a changing business environment.

“Pat and Jack have been a very effective team,” Giuliano said. “We’re very sorry to see Jack leave, but we’re grateful for the significant contributions his transformative approach to our organization and the nation it serves. We wish him nothing but the best in the future.”

Donahoe said he appreciated the confidence of the governors in naming him the next Postmaster General.

“It’s been an honor to serve with Jack,” Donahoe said. “Our challenge going forward is to implement the ambitious plan now in place to assure the continued viability of the Postal Service in fulfilling its mission of providing reliable, self-supporting, universal mail service to our nation. While we are confronted by challenges, I am confident we will succeed.”

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

 Monica Lundquist

Postal Affairs Manager

Window Book, Inc.

617-395-4570

mlundquist@windowbook.com

As we’ve discussed previously in this blog, the red round date stamp from the United States Postal Service^® (USPS^®), which mailers have used for years as proof of mailing, is no longer available for electronically submitted postage statements. The USPS recently announced that the red round date stamp will also be discontinued for hard copy statements, effective March 15, 2010. This change will be effective for postal facilities that are equipped with PostalOne! Facilities without access to PostalOne! will continue to round stamp hard copy postage statements.

In lieu of the red round stamp, the USPS is asking mailers to obtain their receipts using the Business Customer Gateway to access PostalOne! Upon request, mailers may also obtain a hard copy receipt (Form 3607) from the USPS. The 3607 form, currently called the Weighing and Dispatch Certificate, will be reformatted and renamed in March to Mailing Transaction Receipt, Form 3607-R.

The mail verification and acceptance processes will not change, only the transaction receipt process. The acceptance clerk will verify the mailing as usual; however they will no longer complete the “USPS Only” section of the postage statements. In the past, the clerk would record the results of the verification process and manually apply the red round date stamp in this area. In the future, the clerks will enter this verification information into PostalOne! The wording on the postage statement form will change from “USPS Use Only” to “USPS Use Only—To Be Completed at Non-PostalOne! sites ONLY.” PostalOne! is the system of record and can be accessed to view postage statement details and print hard copies, if needed.

The Postal Service will modify the DMM^® (Domestic Mail Manual) language regarding the return of a duplicate postage statement to the mailer, differentiating between PostalOne! and non-PostalOne! sites.

Here are the key changes:

• If not submitting postage statements electronically, the customer must provide an original postage statement with the mailing.
• Acceptance personnel will no longer complete the “USPS Use Only” section of hard copy postage statements for offices that enter postage statements into the PostalOne! system.
• Acceptance personnel will no longer complete and return a “duplicate” postage statement (as defined in sections 244.4.1, 334.4.1, of the DMM).
• Acceptance personnel will no longer round-date stamp hard copy postage statements.
• Acceptance personnel will retain the original copy of the postage statement and attach the USPS Form 3607 (Statement of Mailing/Weighing and Dispatch Certificate)* to it on file, as prescribed by the Administrative Support Manual.
• Upon a customer’s request, the acceptance personnel will print the USPS Form 3607 and provide it to the customer along with any duplicate copies of postage statements provided.
• The only acceptable means of proof of postage payment for mailings will be an electronic version of a finalized postage statement, or the USPS Form 3607, generated from the Postal Service’s PostalOne! system.

*In the March 15 upgrade to the PostalOne! system, PS Form 3607 will be replaced with PS Form 3607-R (Mailing Transaction Receipt).

Mailers may obtain more information regarding electronic postage statements by referencing the User Access to Electronic Mailing Information and Reports Guide: Business Customer Gateway Information, On-line Services, and Full-Service Tools. In this document, Appendix B, Access to Hard Copy Postage Statements, provides information on how to access the Business Customer Gateway and retrieve postage statements.

For more information about the Business Customer Gateway and how to access it, visit ribbs.usps.gov.