Postal Reform Approved by Senate

US Senate passes reform bill to rescue US Postal Service

Wednesday, April 25th, 2012

The US Senate has passed a major postal reform bill designed to rescue the US Postal Service from its current financial crisis, by 62 votes to 37.

The 21st Century Postal Service Act (S.1789) includes measures to reform USPS pension and healthcare financing arrangements, with $11bn in surplus pension funds to be used by the Postal Service to buy employees out of their contracts, or encourage eligible workers to retire.
Senators said this key provision would allow the Postal Service to reduce its workforce by around 18%, eliminating 100,000 roles.
Other important measures in the bill will see a two-year moratorium on changing weekly delivery frequency from six-day to five-day to save operating costs as USPS looks to reduce its multi-billion dollar annual losses in the face of ongoing declines in mail volumes.
US Senators voted on around 38 amendments over the past two days, and today saw provisions added that will preserve doorstep delivery of mail for those households that currently have it, while among measures that were defeated were attempts to limit the political influence of unions.
But, an amendment that would have required USPS to stick to its current mail service standards – protecting First Class Mail overnight delivery – was defeated.

House

The bill S.1789 now waits for a deal with the House of Representatives, which is awaiting a floor debate on its own rival bill, to hammer out some kind of compromise between the Senate and House proposals.
A proposed amendment to dump the Senate bill in favour of a measure similar to the House bill was rejected in a vote in the Senate yesterday.
Republican Senator Susan Collins, one of the leaders of the Senate bill passed today, said this afternoon: “I talked earlier today to Congressman Issa to encourage him to move the House version of postal reform, which is very different to our approach, to the Senate floor as quickly as possible so we can get to conference.”
Amendments added in yesterday’s debate on bill S.1789 add extra review requirements and further regulatory scrutiny on the process of closing post offices and mail processing facilities, and could prevent rural post offices from being closed for 12 months.
Today’s voting rejected an attempt by West Virginia Senator Joe Manchin to prevent the Postal Service closing any of the 3,700 post offices it proposes to shut.
But, the voting today also declared a “sense of the Senate” measure – not mandatory for USPS to follow, though laying out the feeling of lawmakers – not to close any mail plants or post offices until S.1789 is finally added to the statute books.
Senators are concerned that USPS could start closing facilities as early as next month, as the Postal Service’s self-imposed moratorium on closuresends on 15 May.

“Vital Step”

This evening the US mailing industry welcomed the passage of S.1789, calling it a “vital step” in saving the US Postal Service.
Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, a group of major USPS customers, said: “The bill will help restore some financial stability to the Postal Service by returning overpayments that the agency has made into federal pension funds, and reform its retiree health prefunding to a more realistic level.
“The mailing industry is grateful to the Senators who supported it and especially to Senators Joe Lieberman, Susan Collins, Tom Carper and Scott Brown, and their staffs who worked tirelessly to keep this bill on track,” Sackler added: “It’s now critical that the House follow suit quickly, or we risk a shutdown of the Postal Service and an ensuing economic calamity.”

Source: James Cartledge, Post&Parcel

Senate votes on Postal Reform today at 2pm

The final bill (S. 1789) is expected to pass the Senate but faces an uncertain future. The House has yet to begin consideration of a different version of a postal bill, which seeks to create a national commission that would make major decisions on postal cuts and make it easier to eliminate Saturday delivery. The commission, which would have authority to do away with no-layoff clauses in postal employee contracts, is fiercely opposed by postal unions. “This of course kicks the can down the road,” complained Sen. John McCain, R-Ariz., who unsuccessfully pushed for a commission in the Senate bill. He argued that the current bill failed to address longer-term fixes, instead hiding behind studies and reviews that unnecessarily delayed major decisions. “We’ll be on the floor in two years addressing this issue again, because it is not a solution.” Postmaster General Patrick Donahoe also has criticized the Senate bill as a short-term answer. Noting that more people every year are switching to the Internet to send letters and pay bills, he has called the Postal Service’s business model “broken.” The agency has estimated that the Senate bill would only provide it enough liquidity to continue operating for two or three years.

Postal Reform is Coming

US postal reform bill heading for vote by full Senate

Tuesday, April 24th, 2012

The US Senate could vote as soon as this afternoon on measures to rescue the ailing US Postal Service, with around 38 amendments to the main bill on offer.

The likely shape of the Senate’s 21st Century Postal Service Act (s.1789) is anything but certain, with many of the proposals to reshape the US mail processing network and cutback on under-used post offices splitting US lawmakers.
Divides over many issues, like the elimination of Saturday deliveries, are not falling along Party lines, while in other matters like network cut-backs, job protections and attempts to reduce union powers, the Democrat-Republican influences are more clear among the Senators and their proposed amendments.
Local influences are also strongly apparent for Senators, particularly those living in rural areas facing a loss of post offices, or in areas where major USPS mail processing plants are being targeted for consolidation.
Among the amendments being voted on are proposals to further review, delay or stop outright the closing of rural post offices, adding requirements on USPS to provide alternative postal retail outlets, and even to bring in state governments to decide on the survival of local post offices.
There are also lawmakers proposing limits to the downsizing of the USPS workforce and mail processing facility, and measures to protect mail service standards.
Other amendments seek tougher measures that the core bill proposals, such as requirements for eligible USPS workers to retire, powers for USPS to close unprofitable post offices, a pilot of alternative delivery arrangements, stronger requirements for postal products to cover their costs, a new Commission on Postal Reorganisation and even a proposal proposing to end the current monopoly that the Postal Service has in accessing household mailboxes.
Proposed amendments also include efforts to limit union power within USPS contract negotiations, and efforts to force top executives to reduce their salaries.

Reform

Amendments supported by the full Senate will join the S.1789 bill that seeks to help the Postal Service turn around its current multi-billion dollar annual losses, a situation caused by the dramatic fall in mail volumes since 2006, and worsened by serious pension over-funding and a punitive system of pre-funding future healthcare liabilities.
It would appear that all US stakeholders support change at the US Postal Service in some way to cope with an increasingly digital age. Unions, professional associations and industry groups have been pushing their members to contact their local Senators to support their favoured amendments.
However, Senators as with mail industry stakeholders all have a different idea of the best approach for change – whether it be restructuring pension and benefit systems, reducing the size of the processing and retail networks, cutting back the workforce, raising postal rates, altering First Class Mail standards – or innovating to find new ways to bring in revenue into the Postal Service.
With some Senators still threatening to block the entire bill if it does not satisfy their key demands, passage of the bill is not guaranteed. Even if it does pass, it would then require a challenging vote in the House of Representatives, which has a different political make up to the Senate with a Republican majority. The House has its own postal reform bill to counter S.1789, a bill which has also passed through committee and is awaiting a floor hearing.

Source: Post&Parcel

First Class Mail Continues Decline

Americans sent 2bn fewer letters in run-up to holiday season

Tuesday, April 3rd, 2012

Americans sent nearly two billion fewer letters in the three months up to the end of December 2011, compared to the same period the previous year.

That is according to the latest quarterly financial data filed by the US Postal Service with regulators this week.
For all classes of letters, including those in competitive products, the figures stated that volumes fell 5.4% for the first quarter of the USPS 2012 financial year, compared to the same period in FY 2011.
The 1.87bn reduction in letter volumes saw revenues from letter services fall 4.1% quarter-on-quarter, to $9.77bn for the three months.
For flats, volumes in all classes fell by 944bn pieces, or by 8.8% quarter-on-quarter, with revenues falling 8.1% or by $283m to $3.2bn.
During the busy festive season, however, there was good news from parcel figures, with all classes of parcel in market-dominant and competitive products showing an 8.9% growth, as 69m more parcels were shipped compared to the same quarter in the 2011 financial year. Parcel revenues of all classes grew 9.6% to just over $2.7bn for the quarter.

Market-dominant products

Among the monopoly products within the US Postal Service, its biggest money-making class of mail, First Class Mail, saw volumes fall by 5% in the first quarter of the USPS 2012 financial year
First Class Mail represented just under half (46%) of all US Postal Service revenue during the quarter, but American householders and businesses sent just over a billion fewer First Class Mail letters and parcels in the quarter, compared to the same period in the 2011 financial year.
The decline was led by a sharp drop in single-piece letters, with the quarter showing more than 677m fewer individual letters sent compared to the same period in the previous year, a 9.4% drop.
Within the First Class Mail category, presort letters showed some resilience financially, with revenues increasing 0.9% year-on-year, but volumes fell by 0.8% or by 88m pieces.
Overall First Class Mail revenues declined 5.7% in the quarter, or nearly $500m, compared to the same period last year, to $8.2bn. Volumes overall fell to 19bn pieces.
Among other market-dominant products, the quarter saw Standard Mail revenues falling by $305m or 6.1% compared to the same period the previous year, to $4.7bn, with volumes overall falling by 1.8bn pieces (7.5%) to just over 22bn pieces.
Some of the steepest volume declines were high-density and saturation letters (a 11.2% volume decline) and flats (a 13.6% volume decline). The biggest Standard Mail category, letters, saw a 7.8% volume decline, to 12.7bn pieces.
USPS periodical figures similarly revealed little by way of joy, with periodicals volumes down more than 110m in the quarter, a 6.4% drop. Periodicals revenues for the Postal Service were down 7.5%, about $35.8m below the previous year’s first quarter.

Competitive products

Among those products in which USPS competes with the private sector, the Postal Service saw an overall 14.9% increase in its revenues compared to the previous year, to $2.97bn.
With express mail showing a 2.1% decline in its revenues, and a 3.6% decline in its volumes, much of the growth in USPS competitive shipping services came from parcels.
There was some transfer of volumes from the market dominant to competitive products with First Class Package services becoming a competitive product, having been a market-dominant product the same period in financial year 2011.
But, the parcel select service saw a 32.5% growth in revenues, pulling in an extra $62m in during the quarter, with 30.7m more parcels delivered compared to the same quarter the previous year.
Priority Mail saw revenues up 3.9%, to 1.7bn in the quarter, and its volumes grew 2.7% to just over 231m.
International Mail revenues increased by 7.3% during the quarter, to just under $500m, with volumes overall increasing 4.7% to 78m pieces.

Source: Post&Parcel/PRC