On February 9, the USPS distributed a press release announcing it ended the first quarter of this fiscal year (Oct. 1 to Dec. 31, 2009) with a net loss of $297 million and stating these 2010 first-quarter financial results reflect continued effects of the recent recession, as well as continued migration of mail to electronic alternatives.
For those of you who have read this column in the past, you know I am actively involved with events surrounding the USPS. Last month I attended a CEO Breakfast with Postmaster General Jack Potter to discuss the current state of the USPS. It was one of several CEO meetings Potter is holding with corporate leaders from all industries in an effort to raise awareness. It’s clear, Jack Potter needs our help. He is working hard to change the USPS business model to the 21st century, but he faces Congress, and the Union, and often the general public who are used to the convenience of services that have been in place for decades.
If the USPS were a private company, it would rank 26th on the Fortune 500 - above Boeing, Costco, Target, and Dell. Despite the reduction of more than 195,000 employees since 1999, its workforce is still the nation’s second largest civilian workforce, trumped only by Walmart. But the USPS has restrictions that these enterprises do not.
By law, the Postal Service is barred from closing any Post Offices based solely on lack of profitability, and roughly 75 % of Post Offices today do not generate enough revenue to cover their costs. We need to come up with solutions for our local Post Offices. For example, adding products and services from franchise operations like Starbucks or Hallmark would help pay the rent while providing a convenience for the public. Additionally, Congress mandates six-day delivery, yet reducing the carriers’ work week to five days would save a predicted $3.5 billion. Six days to five days makes total sense. Most every other country has gone to five day delivery.
But any changes to the USPS business model have to be voted on by Congress. Given it is an election year, any issue that may be viewed as unpopular is probably not going to be addressed—unless we speak up.
So let’s go back to the press release for a minute. After it states those staggering losses, it goes on to say: “With net losses reported for 2007, 2008 and 2009, the continued negative trend in fiscal 2010 raises significant uncertainty about the Postal Service's ability to generate sufficient cash flows to fund large cash payment obligations in September and October 2010.”
It would be hard to replace the USPS, now wouldn’t it? But, there’s no doubt it can no longer operate on business as usual. As business owners—and high-volume mailers— we know that unpopular business decisions aren’t easy. However, as hard as they may be, they are often decisions that make more sense than sticking to a business model that has the potential to bring the entire house down. Let’s not wait for a Congressional bailout. Join me in speaking out. Contact your congressional representative and let your voice be heard. Today.
Until next time,
Harry
To View the USPS News Release, CLICK HERE
Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Major Mailers Association (MMA), PCC Advisory Committee (PCCAC), and National Postal Policy Council (NPPC). He is also president of The Imaging Network Group (INg), an association for electronic service bureaus. As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers. Find DATAMATX at www.datamatx.com
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