A Word from the Chairman (Dan Blair) of U.S. Postal Regulatory Commission - February 13, 2009
[Press Release.]Much attention has been paid recently to the Postal Service’s announcement that it was asking Congress for authority to decrease the frequency of mail service from six days a week to five days as a means of cutting costs in the face of declining mail revenues and volumes. The frequency of mail delivery and the current legislative requirement for six day a week delivery is just one area discussed in the Commission’s recent report on Universal Postal Service and the Postal Monopoly.
In the Report, the Commission found that the universal service obligation (USO) in the United States has statutory underpinnings, but there is no specific USO. Rather, the Commission identified seven attributes of the USO – delivery frequency being one.The Report found that reducing delivery to five days a week should produce savings for the Postal Service, yet the Commission found that this reduction could degrade the value of delivery service and result in a loss of mail volume. Based on Commission estimates, reducing delivery frequency by one day could save $1.94 billion annually. The Postal Service estimates a savings of $3.5 billion with no reduction in volume. We have recommended that the Postal Service undertake a study of the elasticity of demand of mailers so that accurate estimates of volume decline can be developed.
As Congress proceeds to review the Postal Service’s proposal, along with other options, access to accurate and timely information regarding the Service’s finances would assist in informing the public debate. The Commission’s Report recommended that any changes in the USO that Congress might undertake to assist the Service in confronting its financial challenges be carefully balanced against all the attributes of universal service identified by the Commission. This is why publicly available monthly financial reports - to Congress and the Commission - will help keep postal stakeholders abreast of changes in trends and allow prompt reaction to changing circumstances.
The Postal Service is the foundation for a $900 billion mailing industry. Given the tenuousness of the Postal Service’s financial situation, more – not less – transparency is called for. Congress and the general public should have the benefit of readily available information regarding the Postal Service’s finances in evaluating these serious public policy issues. That is why the Commission so strongly recommends that the Postal Service provide Congress and the Commission with monthly financial reports.
DMA Makes Available ‘Mail Matters’ Environmental Initiative - February 9, 2009
[DMA Environmental Resource Center.] DMA’s “Mail Matters” is an online initiative aimed at educating consumers about the benefits of direct mail — as well as the challenges direct mail today faces. Packed full of information, DMA’s Mail Matters provides critical facts that are not well-known, and dispels myths and misconceptions about direct mail. Topics include: Fun Facts About Direct Mail, The Bargains and Conveniences of Direct Mail, Keep the Mail Moving, and Direct Mail and the Environment.
“An Ounce Of Prevention Is Worth A Pound Of Cure: A Cautionary Lesson For The U.S. Postal Service From Great Britain’s Royal Mail” by The Institute For Research On The Economics Of Taxation - February 5, 2009
Executive Summary
In December 2008, the British and American governments issued major reports on their nations’
postal services.
The Hooper panel in the United Kingdom described Royal Mail as a behind-the-times enterprise
that needs to invest more in automation but is hobbled by a massive pension debt. The panel
recommended the government take over the pension liability (a taxpayer bailout) and that part of
Royal Mail be sold to a private company to inject capital and provide greater business expertise.
The leadership of Britain’s Labour government supports the findings.
In the United States, the Postal Regulatory Commission (PRC) examined the U.S. Postal Service’s
universal service obligation (USO) and postal monopoly. The PRC did not recommend any major
changes, although it suggested that the USO remain flexible so that, if the need arises, the Postal
Service can adjust the USO to keep mail service economical.
Many factors contributed to the vote of no confidence in Royal Mail and the vote of confidence
in the U.S. Postal Service. One major difference is that the Postal Service is not plagued by
strikes. The Postal Service has also benefitted because it has been a leader among the world’s
posts in two key efficiency-enhancing areas: it has long invested heavily in automation, and it
indirectly opened up much of upstream mail processing to competition a generation ago.
The combination of global recession and electronic diversion is placing enormous strain on mail
volume and revenue. A nonrigid USO will help the Postal Service cope. In addition, future mail
service in this country will be stronger if Congress allows the Postal Service more flexibility in
rationalizing its distribution network and more control over employees’ wages and benefits. An
incentive for Congress to permit this flexibility is that, as the comparison of Royal Mail and the
U.S. Postal Service shows, modest reforms taken early can sometimes avert more drastic changes
needed later.
Within several days of each other in December
2008, the British and American governments issued
major reports on their nations’ postal services. The
findings are starkly different. The American report
expressed confidence in the U.S. Postal Service and
did not recommend major changes, although it
repeatedly stressed that the Service needs operational
flexibility to respond to evolving conditions. The
British study concluded that Royal Mail is foundering
and urgently requires major reforms, including partial
privatization. The contrasting findings offer lessons
for the United States: they throw light on some past
actions that have benefitted mail service in this
country, and they point to several challenges for the
Postal Service that should be addressed sooner rather
than later.
IPC CEO Addresses Global Leaders in Riyadh - January 28, 2009
[Press Release.]Herbert-Michael Zapf, Chief Executive Officer of the International Post Corporation addressed global business leaders today in Riyadh at the Global Competitiveness Forum 2009 (GCF). Mr. Zapf served on a panel of distinguished speakers as part of this year’s forum Responsible Competitiveness: Competing Responsibly in Our Changing World. The Forum hosted by the National Competitiveness Center and the Saudi Arabian General Investment Authority brings together world leaders to discuss core competitiveness issues, including – human resources development, international trade, the environment and the micro-and macroeconomic consequences of becoming globally competitive.
Mr. Zapf addressed a session entitled: Sustaining the Green Agenda. His presentation focused on the IPC Environmental Measurement and Monitoring System (EMMS) and the leadership role that the postal sector has taken in the quest to reduce CO2 through this cooperative initiative.
Other members of the panel include Peter Schwartz, CEO, Global Business Network; Christine Todd Whitman, Former Governor of New Jersey and head of the Environmental Protection Agency in the United States; Peter Rosen, CEO, Bovince Ltd.; Markus Brehler, CEO and founder, Enocean and Jean-Pascal Tricoire, CEO, Schneider Electric. The panel discussed the impact of climate change on business and industry, the leadership role that industry should take in self-regulating, challenges and responsibilities of different sectors and the role of government regulation.
Statement of U.S. Postmaster General John Potter at Annual Oversight Hearing before Senate subcommittee, January 28, 2007 - January 28, 2009
[Press Release.]
Statement of Postmaster General/CEO John E. Potter before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security of the Committee on Homeland Security and Governmental Affairs United States Senate.
