The BEST summation of the Postal Problem!

I was recently at the website of the excellent Save the Post Office!  Read it- there is much valuable, real information there, as opposed to the official USPS info, which is total self-serving propaganda to serve the management that is now in charge of this venerable institution.

Here is the article from Postmaster Mark Jamison.  Read it, and you will understand the real problem!

A post office worth preserving

January 18, 2012

BY MARK JAMISON

[Mr. Jamison serves the town of Webster in the mountains of North Carolina as its postmaster.  He has written extensively on postal issues.  In keeping with the USPS Administrative Support Manual, Mr. Jamison does not "speak for or act on behalf of the Postal Service."  These are his thoughts on where things stand and where we ought to be headed.  Mr. Jamison can be reached at Mij455@gmail.com. —Ed.]

FOR MANY MONTHS NOW, postal management and a chorus of pundits have delivered one message: Out-of-control deficits are dooming the Postal Service, and it will survive only if management is given the authority to radically downsize the system.  Half the country's post offices and processing plants must close, Saturday delivery must go, service must be reduced, and over two hundred thousand jobs must be cut.  

These steps, however, will not ensure the survival of the Postal Service.  This is not a vision for the future.  It's an invitation to a funeral.  

After Postmaster General Patrick Donahoe spoke at the National Press Club at the end of November, it should have been clear to anyone following the trials and tribulations of the USPS exactly what vision postal senior management had for the future of the institution.  Mr.  Donahoe stated that it was his goal to wring $20 billion of costs out of the system within the next few years.  He essentially demanded free rein from Congress to disassemble the postal network as we know it.

The vision expressed by Mr. Donahoe was one of declining mail volumes, an entity that had outlived its relevancy in a technological age, and the need for a business model which transformed an institution of national infrastructure into simply another player in the mailing and delivery business.  He spoke of a future that consigned the purpose and the past of a national treasure to the dustbin of failed business models, right next to the graveyard of buggy whip makers.

The plans advanced by senior postal management involve shedding much of the current retail network and well over half of the plant facility network.  In addition, the service standards that have made the Postal Service useful and reliable were to be revised downward in what appeared to be a relentless quest for mediocrity.

The plans also involved eliminating tens of thousands of good, middle-class jobs and replacing many more with low-wage casual workers, while also dismantling retirement and health benefit systems that have served generations of workers well.

What Mr. Donahoe offered was a vision that has become popular among a small segment of the American political class.   It is a vision of an impotent public sector, a downsized, out-sourced, minimum-wage work force, and it shows a complete disregard for infrastructure.   It is a view of globalization come full circle, America as a third-world country.

Not long after Mr. Donahoe’s speech, several members of Congress awoke from their slumber and began seeing the future Mr. Donahoe proposed.  As calls from their communities became more alarming, telling of closed post offices and shuttered plant facilities, and as it became apparent that the proposed changes were not merely a matter of rightsizing postal operations but dismantling them and denigrating service, Congress began showing heightened interest, eventually demanding a moratorium on some of the proposed changes.

Yet even after agreeing to a moratorium on plant and post office closings, the Postal Service continued with the procedures and steps needed to close facilities.  Even after the Postal Regulatory Commission (PRC) found in its Advisory Opinion on the Retail Access Optimization Initiative (RAOI) that the Postal Service’s plans to rationalize the network had very little foundation, the Postal Service continued with requests for vendors to take over the hub-and-spoke operations that would be eliminated by plant closings.

The fact is the PRC found, as many of us have been saying all along, that the Postal Service’s plans were less about finding a successful business model than they were about simply carving up the postal network into bite-size chunks.  The RAOI decision returned to many of the same points raised in previous decisions, like the exigent rate case and the five-day delivery case — primarily that the Postal Service’s plans lacked substance. 

The plans espoused by the management of the Postal Service appear less the articulation of a successful outcome, the re-envisioning of a successful business model, than they are the actions a vulture capital firm might undertake when dissolving a business by extracting whatever value might exist and leaving the rest to “creative destruction.”  No one from the Postal Service has yet offered a picture of what a successful outcome might be.  Actually that isn’t terribly astonishing since it would be awfully hard to describe success when your every action is built towards taking the enterprise apart.

AT THIS POINT, the story is clear in terms of what got the Postal Service in these straits.  We know the excessive extraction of funds from the Postal Service by the poorly conceived 2006 Postal Accountability and Enhancement Act (PAEA) has resulted in non-operational deficits.  We know too that various retirement accounts have been over subscribed and that other accounting devices, like accounting for workman’s compensation obligations, have been rigged to transfer funds from the Postal Service to the Treasury.

We know too that volumes have dropped, and while some of that may be due to changing technology, a good bit is due to the ongoing recession and some may even be due to the continual atmosphere of crisis that the postal management has ginned up.

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USPS self-destructs! Treats customers like employees!!

The USPS has a long history of treating their employees...

Badly!

But lately, out of desperation perhaps, they have started treating their customers... the SAME as they treat their employees!!

SUICIDE!!

They now:

Force their employees to track how much postage due is at EACH ADDRESS!
SCAN via the ever-present SCANNER their every move!!
CUT actual real customer service WHENEVER POSSIBLE!

This is corporate suicide.

The USPS is a corrupt federal agency, bent on rewarding the people that cannot DO the actual craft work...

This is the ultimate result: they have promoted the LEAST able employees, rather than firing them, and now-

The LEAST able employees are now IN CONTROL of the entire USPS!!

They are now in the process of parcelling out the entire organization, for their own benefit.

 Left wing socialized control leads inevitably to this result:

1. Let's run things for the benefit of ALL!

2. For the benefit of ALL, we need more at CENTRAL!

3. You are all not doing ENOUGH!  We need more CONTROL!!

4.  You are REALLY not doing enough!  We need to have MORE REPORTS!
MORE ACCOUNTABILITY!

5. We need more SUPERVISORS!  Things are not working out- you guys are NOT WORKING HARD ENOUGH!!


6. You are definitely NOT producing enough for us at the top!
Their will be a doubling of supervision, and much more accountability!
In addition, their will be a tripling of management!!!


7. Things are NOT working out!
We need MUCH more management- individual autonomy is obviously an outdated concept...
We need a monarchy!

This is the endless progression to the left...

USPS warns of defaults on retiree benefits!

The U.S. Postal Service will begin to default on its financial obligations just over four months from now unless Congress takes action to relieve it of its obligation to pre-fund retiree health care accounts, its leader told lawmakers Tuesday.
USPS expects to post a net loss of $8.3 billion for this fiscal year, nearly as much as it lost last year. And with its $15 billion debt limit due to be reached this year, more borrowing is not an option, Postmaster General Pat Donahoe said in testimony before a subcommittee of the Senate Homeland Security and Government Affairs committee.
"Despite our aggressive cost cutting and revenue generating efforts, we are in serious financial predicaments today," he said. "As things stand, we do not have the cash to make the $5.5 billion prepayment for future retiree health benefits due on September 30. And we may be forced to default on other payments. This could extend to operational expenses."
USPS contends the prepayment for future retirees is a financial obligation that none of its competitors, nor any government agency, has to live with. The requirement came along with a 2006 postal reform bill that was passed when mail volume was at its peak.
Officials say the payments were also based on what was then a much larger employee base. USPS has cut its workforce by 113,000 since then. Donahoe said in written testimony to the subcommittee on federal financial management that not only can USPS not afford the future retiree health bill this year, but that without Congressional action, it's inevitable that the organization will eventually default on payments to employees and suppliers as well.
After the hearing, he told reporters that was a last resort, and skipping the retiree health payment this year would provide at least some breathing room.
"The last thing we would do would be to negatively disrupt the delivery of mail, because it's tremendously disruptive to American commerce," he said. "There's trillions of dollars that go through the mail. 52 percent of Americans still pay their bills through the mail versus online."
The postal service also wants Congress to refund up to $75 billion it says it has overpaid into the Civil Service Retirement System (CSRS), and another $7 billion in overpayments into the Federal Employee Retirement System (FERS). It would use that money to finish off its retiree health benefit prepayments and pay down its accumulated debt.
But Donahoe said those were short term fixes. Longer term health for the postal service, he said, means more management flexibility, including the option to go from six-day to five-day delivery.
He said USPS is also working to cut more costs by removing excess capacity from the postal system, including the politically-sensitive subject of closing post offices themselves.
"In some small offices, we're looking at consolidation because what we're finding is that many of these offices don't even have an hour's worth of work in a day," he said. "If it's close to another office, a mile or so, we can consolidate. In other cases, many towns have three businesses: a general store, a gas station and a post office. What we're looking for is to talk to the general store or the gas station to take a contract to provide postal services. There are many options, and we want to hear from people, but we have to move on these things."
Sen. Tom Carper (D-Del.), the chairman of the subcommittee, has introduced legislation that would give the postal service what says it needs. It would allow USPS access to the excess FERS and CSRS funds it has paid so it can pay off its retiree health benefits once and for all.
Carper said it would also let USPS management run the organization with less Congressional interference.
"No business, facing the kind of challenges the postal service faces today, would survive very long if they were told how many retail outlets they should have or where they should be located, or if they were prevented from making operational changes or taking advantage of the resources they have at their disposal," Carper said. "Yet that's what Congress does to the postal service."
Carper believes USPS needs to think of new ways to generate revenue, and his legislation would let it sell or provide non-postal products and services, as long as they're in the public interest.
His legislation also would let USPS ship alcoholic beverages for the first time.
"We think it's an excellent idea," Donahoe said."What the Postal Service brings is convenience in that whole industry. We've seen other posts—Australia Post for an example has done that—and that's one of their biggest growth products."
He said carriers would not deliver alcohol directly to a home, but would require an adult to pick the package up at a post office.
Several lawmakers expressed concerns about the five-day delivery idea, particularly members representing Hawaii and Alaska, where delivery times are longer, and residents, particularly in remote areas, are heavily reliant on mail.
And Sen. Claire McCaskill (D-Mo.) said USPS might be surrendering its biggest competitive advantage.
"If you were looking at this through the very cold lens of just a pure business model, you're giving away the major advantage you have when you give away that sixth day," she said. "What keeps us from going to four? If we go to five, aren't we really talking about the beginning of a death spiral here?"
Donahoe doesn't believe so.
He said Saturdays are easily the postal service's lowest volume day, because commercial advertising customers don't want their mailings to arrive on Saturday, when people are busy doing other things. Nonetheless, he said he was not particularly excited about eliminating Saturday delivery.
"We do not want to go to five day delivery," he said. "Financially, we're in a situation where we've got to take that as an option. It is tied directly to the loss of first class mail volume. America's changing. People are paying bills online. Every time a bill's paid online, that's 18 cents (of profit) we can't use to cover six-day delivery and a number of these small post offices."
On the subject of small post office closures, lawmakers heard some pushback from labor organizations. Mark Strong, president of the National League of Postmasters, said USPS spends less than one percent of its overall budget on the smallest one-third of its post offices. He said the organization should find new ways to use its physical locations, rather than shutting them down and contracting out their services.
"Post offices are where the American flag flies in every community in this country," Strong said. "To take those flags down and replace them with grocery stores or gas stations should be the last alternative. We should be putting more government services into those postal facilities."
In addition to Carper's bill, Sen. Susan Collins (R-Maine) has introduced a separate postal reform proposal that would order the Office of Personnel Management to recalculate USPS's contributions to federal pension accounts to prevent future overpayments.
Donahoe said USPS supported that bill, but without the extra management flexibility the Postal Service is asking for, he said leaders will be back before Congress next year, facing another looming payment default.

Postal Service is failing... what to do?

Here is an interesting article about postal services worldwide:

The bottom line as I see it is this- postal management is primarily focused on preserving their own jobs. They will push for bigger trucks, bigger mailbags, bigger hampers and tubs to carry mail in (giving the illusion of more productivity with too- large equipment that only gets in the way of the carrier trying to do the work efficiently).

See the picture to the left- the light, efficient, easily pushed canvas hamper is being replaced by the ugly, heavy, over 200 pound monster of orange and black!
The only reason is that is it bigger, and all management can see is that then fewer trips will be needed to load the trucks... but, they are so big that they don't fit down the aisles in the garage, they are so heavy they can't be stacked and so are always in the way of later carriers as they try to load, and they are so poor at turning that it takes quite a bit longer to push them out and around the garage!

The only real solution to the problems of the USPS is that the managers of that organization, of whom there are way too many, need to look in the mirror, and realize that excessive management is the main problem in the United States Postal Service!

That is the bottom line! But, they are not going to recognize that, since they don't want to...

This "bigger will save us" mindset, which to my mind is just "rearranging the deck chairs on the Titanic" is described in the following article about postal services worldwide:

Increasing the value of mail in an era of digital transformation

Wednesday, August 4th, 2010 Post & Parcel

As the digital age continues to grow at a profound rate, Bernie Gracy, vice president, Strategy & Business Development, Pitney Bowes Inc, discusses the position of the Posts.

Asking the right questions

There is an old joke I heard when I was in college. It goes like this: Two guys decide to start a wholesale potato business. They get a truck, and from a farmer they buy a load of potatoes at fifty cents a pound. When they get to town, they sell the potatoes to the grocer for fifty cents a pound. They operate the business like this for a few weeks and then tally their profits. Realising they have none; one guy turns to the other and says: “Do you think we should get a bigger truck?”

It is a silly story, but it raises a valid strategic point for postal services around the world that are fighting for their financial survival. When facing fundamental challenges to a business model, it is crucial to ask the right question.

Financial challenges

For today’s posts that imperative to ask the right question is more important than ever. Around the world, posts are struggling with declining mail volumes due to digital alternatives plus competition after liberalisation in European postal markets. Earlier this year, the Dutch post and express delivery group TNT reported lower earnings, stating cost cuts and cash generation would remain a focus. TNT is not the only European postal company to do so.

The financial woes faced by the USPS mirror those of its European counterparts. Yet, unlike other posts around the world, the USPS’s business model is restricted by statute and is dependent on its monopoly of letter delivery and competition in parcels for survival.

The financial challenges of posts around the world promise to have a profound impact on mailers, employees, consumers and potentially national budgets. Postal leaders are exploring cost cutting and revenue generating alternatives that will help alleviate these financial pressures. Similar to the two guys and the potato truck, something fundamental has to change in postal operating models.

Rethinking postal operating models

Some of the questions being asked these days are: How can I cut my costs to adjust for lower mail volumes? How can I stimulate volume? How can I reduce labour hours without disrupting my labour force and quality of service? How can I close offices without enraging consumers and local elected officials? What are the legal adjacent spaces where I can gain market entry and compete?

Traditional answers to these questions are steeped in the historical role of postal services. Mail binds a nation together. Mail connects citizens to their government, to each other, and to the companies that want to do business with them. Mail provides a trusted, secure, and universal method of communicating confidential information around the corner or across the country. And yet with ubiquitous wired and wireless broadband, less expensive laptops, netbooks, and smartphones; email, texting, IMs, Facebook, Twitter, ooVoo, and most recently the iPad, there are now numerous digital alternatives available to businesses, governments and consumers to exchange information and build relationships.

Trends in history

With this trend in mind, I am reminded of Henry Adams’ essay The Virgin and the Dynamo. When Adams visited the Great Exposition in Paris in 1900 he was awestruck by the dawning electric civilisation of the twentieth century and the inherent cultural disruption it portended– in contrast to the motive force symbolised by the great medieval cathedrals and centuries of cultural stability in a largely agrarian society.

If Adams were alive today and he was a postal executive, would his essay now be entitled The Mailbox and the iPad? In many regards, postal executives are awestruck by the dawning globally interconnected society of the twenty-first century and the inherent cultural and business disruptions it portends– in contrast to the centuries of stability of the legacy postal business model.

As important as these questions and ponderings of postal executives is, I think, the critical assessment framework which comes from Harvard Business School strategist Clayton Christensen. Christensen, who advises companies facing disruptive competitive pressures, focuses on understanding why customers “hire” their product. For postal operators, that means asking what job is the mail being hired to do? Or conversely, why is mail being fired? And who is responsible for the hiring and the firing?

The importance of the customer’s customers

Postal executives are focused on their customers: the mailers and primarily business entities that pay for postage and shipping. But what about the customer’s customers, the people receiving that letter or package? They are traditionally viewed as a cost of doing business, represented by distribution expenses, labour expenses, fuel, wear and tear, among others. But it is the customer’s customers who order the packages. It is the customer’s customers that ultimately determine if they want physical mail or digital alternatives. They are ultimately responsible for the hiring and firing.

It is therefore incumbent upon posts, mailers, and their technology and services suppliers to work in concert to develop offerings that create more value for the customer’s customers as well as the mailers. Fortunately, mailing technology is also advancing to the point that mailers and consumers can increasingly get exactly what they want and need from the mail channel, and therefore will become more likely to “re-hire” mail for future communications.

For the mailer it is obvious - reducing barriers to attract, retain, and serve customers while reducing costs. For the consumer, in the face of a jobs crisis, credit crisis, health care crisis, and retirement crisis - mail helps them manage their lives.

Transpromo

One good example of the application of mailing technology that benefits mailers and consumers is when a transactional statement is combined with key attributes of a direct mail piece, often called Transpromo technologies. What makes Transpromo unique is its ability to combine variable content, or data from different sources, into one stream of information on a customer. What makes Transpromo most valuable is the combination of a highly trusted document such as a banking statement, credit card statement, tax bill, pension plan or invoice with relevant advice, counsel, and offers in the context of that statement on how customers can best manage their wealth, health, and their lives.

To take the example of healthcare, profitability is linked to a plan member’s health and welfare. Insurers are incentivised to change the behaviour of their clients for a win-win scenario. Some examples include: for patients to use preventative services through their primary care doctors instead of emergency rooms; to use mail order vs. retail pharmacy; to manage their chronic conditions vs. risking worsened health. A Transpromo document with its high openability and read rate is the perfect context for improving profitability while aligning with the member’s need for medical guidance and counsel on how to better manage this or her life.

The same is true for financial services. In these days of financial reform banks and investment houses will earn profits from providing better advice to their customers rather than using their assets in risky derivatives and credit default swaps. Forrester Research reports that consumers who see products in the context of their financial situation are ten times more likely to take action. I know of few venues as effective for assessing the context for their financial situation as a well crafted transactional statement.

In addition, Transpromo technologies have matured to the point where they can lower the barriers between the mailer’s marketing, IT, and operations functions to allow customer insight to drive relevant communications, advice, counsel, and offers in these high open rate vehicles. When effectively applied they offer the opportunity for mail to be rehired by both the mailer and the consumer.

Conclusions

In addition to services and technology, mailers also play an important part in today’s digital age. As referenced previously, the contrast of the Mailbox and the iPad holds the key. Many posts view themselves as a pipe between mailers and consumers; however, it is not the only framework within which to find solutions.

From a consumer’s perspective, the Post is a trusted aggregator and consolidator of mail. Therein is the digital opportunity: where mailers, technology and service providers and posts can lever their assets, capabilities, and brands to repurpose the content inside and outside of the envelope. In this way they can replicate the post’s role as a trusted consolidator and aggregator of mail in a fixed or mobile digital environment. Within this framework, new opportunities exist for posts to play a very relevant role in helping consumers better manage their lives using both physical and digital channels.