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Postal Reform Update: Now is the time for Congress to put the Postal Service on the road to financial stability

Mar 8, 2013 12:00 AM

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The Postal Service is currently losing $25 million per day, has defaulted on $11.1 billion in Treasury payments and exhausted its borrowing authority The focus is now on cash flow and earning sufficient income to meet ongoing expenses.  


Sen. Tom Carper (D-DE) and Rep. Darrell Issa (R-CA), chairmen of the Senate and House committees charged with postal oversight, seem to be willing to work together to achieve reform. Congressional support for postal reform legislation will strengthen a mailing industry that provided 8.4 million jobs and $1.3 trillion in revenue in 2012.  


The Postal Service hasn’t been sitting still. It would like to eliminate Saturday delivery as of August 5, 2013. Postmaster General Patrick Donahoe said on February 6, 2013, the move would save the Postal Service $2 billion annually. (Its total deficit is currently $20 billion.) Also, after consolidating more than 45 facilities last summer, the Postal Service will consolidate another 100 facilities this year. In addition, the Postal Service has offered a number of early retirement incentives to reduce their workforce and align with current volume trends.. 


Many of the promotions and incentives that the Postal Service will be offering over the course of this year are designed to highlight the connection between physical correspondence and electronic ommunications. The first promotion, called Mobile Coupon and Click-to-Call, offers postage discounts to mailers who include a coupon in their mailpieces that can be scanned by a mobile device and redeemed either physically or through that device. This promotion also offers discounts for mailers who include a QR code (or other symbology) that allows the recipient to respond to the offer in the mailpiece by scanning the code to initiate a call. 


Despite its financial challenges, the Postal Service is too important to American commerce not to survive. Postal management has repeatedly said mail delivery and service are job one, no matter what pressures they are under. We need postal reform legislation now—American commerce and 8.4 million jobs depend on it. 


Kurt Ruppel is Marketing Services Manager at IWCO Direct. Touch here to learn more about IWCO Direct’s postalstrategy, creative services, direct mail services and Mail-Gard® critical communications recovery services.   


On February 1, 2013, Joel Quadracci, Chairman, President, and CEO, Quad/Graphics testified at a US Senate Committee addressing the current postal crisis. Quadracci said the USPS’ move to eliminate Saturday delivery would require some customers to adjust their delivery schedules and other to seek alternate carriers. While mail won’t be delivered on Saturday, parcels will and USPS offices will be open, two important considerations.   


Quadracci said raising postal rates isn’t the answer. “I cannot stress enough how damaging postal rate increases are to our industry,” he declared. “We believe that the issue of ‘underwater’ classes is a symptom of the larger problem – extreme excess costs in the USPS system. Furthermore, there is a direct negative correlation between rate increases and volume.”

Quadracci urged the agency to streamline its service to reflect declining mail volumes. He went on to call for reamortization of payments for prefunding retiree health benefits, for the Federal Employees Retirement System to return billions (by some calculations) in USPS overpayments and for Congress to provide the USPS with the necessary flexibility to manage health care costs. 


Quadracci ended on a positive note. “Quad/Graphics remains bullish on print,” he said. “We live in a multichannel world where customers have choices. If the Postal Service can manage its cots and maintain an affordable pricing structure, its business can remain sustainable and ours, in turn along with it… Our own innovations with tablet and Smart-phone apps related to QR codes and image recognition, augmented reality and near-field communications keep Quad/Graphics on the cutting-edge of our industry and give our clients a competitive advantage, and we need similarly innovative thinking from the USPS.” 

Katherine O’Brien is the Senior Editor of American Printer. Read her weekly columns here.