News & Events

PMG BEFORE COMMISSION — Potter says status quo won’t do, urges changes at a reasonable pace

Despite signs of progress and positive change, USPS faces daunting challenges in the years to come and action must be taken now to create a new business model that will strengthen America’s mail system, PMG Jack Potter told the President’s Commission on the U.S. Postal Service.

Potter’s testimony today in Washington came two months before the panel will deliver its recommendations on the future of USPS to the president. “The status quo won’t do,” Potter said. “To serve America, to maintain universal service, the Postal Service has to change. It has to modernize with a vision of what America needs not just today but 10 to 15 years from now.”

Potter said USPS is doing all it can within current law, guided by its Transformation Plan. “Postal employees throughout the country have stepped up to better serve America,” he told the commission. Service performance is at record high levels. Productivity continues to rise. USPS has long-term contracts in place with its major unions. USPS is focused on its core mission of providing high levels of service at affordable rates.

But, for the first time in its history, he noted, USPS has experienced two straight years of significant decline in First-Class Mail volume, a primary source of revenue. The weak economy has had an impact, he said, but the diversion of First-Class Mail to the Internet and to lower cost, lower yield mail products is real. “This shift calls into question the main building block of our business model,” Potter said.

Changes are necessary, he said, but they must evolve over time and occur at a reasonable pace. “Creating chaos will not work,” he said. “The changeover from the Post Office Department to the U.S. Postal Service in the early 1970s created a period of chaos.”

Potter told the commission these are USPS priorities when it comes to short-term changes in the law: pricing flexibility; the ability to retain earnings, setting aside the break-even mandate; a labor negotiation process that would include the issue of benefits and rely on mediation-arbitration; and flexibility to implement infrastructure changes, including numbers and locations of Post Offices and processing plants and changes in transportation networks.

Beyond these recommendations, options could include changes to delivery standards. “Personally, I believe there will come a time when demand will allow for relaxation of the six-day requirement, but not on my watch,” he said.

Potter urged commission members to consider those recommendations and changes that are in the best interest of the nation and the American people.

“Today, the United States Postal Service is in a race for its future,” he said. “It’s a race to bring about change, not for the sake of change, but to enable Americans to always have a fundamental, universal, hard-copy means of communicating.”

Read the full text of PMG’s comments at www.usps.com/communications/news/press/welcome.htm.

STAMP OF APPROVAL — Postal Governors Approve Precedent-Setting Agreement

It’s official. The first negotiated service agreement (NSA) is a go!

In a precedent-setting move, the Postal Service Governors approved the three-year experimental NSA between USPS and Capital One. NSAs give business mailers a mechanism for customized rates and services that address unique mailing needs and encourage cost-efficient behavior.

The Capital One NSA extends discounts when First-Class Mail volume exceeds 1.225 billion pieces annually. As part of the agreement, USPS will return undeliverable mail data electronically to Capital One.

“Pricing innovations like NSAs will help the Postal Service preserve universal mail service,” said USPS Pricing and Classification VP Stephen Kearney.

“The U.S. Mail has been — and will continue to be — an integral part of our business,” said Capital One Vice Chairman Nigel Morris. “We feel this negotiated service agreement is an important step in the right direction.”

Prior to the Governors’ decision, the Capital One NSA was examined during eight months of open litigation before the Postal Rate Commission.

FIVE-YEAR STRATEGIC PLAN — UPDATE UNDER WAY, PUBLIC COMMENT SOUGHT

The Postal Service is updating its five-year strategic plan as mandated by the Government Performance and Results Act of 1993 (GPRA). The law requires USPS to update and revise its plan at least every three years. GPRA says the five-year plan should include a comprehensive mission statement, goals and objectives, strategies for achieving goals, an overview of the competitive environment and other information.

USPS is seeking comments from all stakeholders, including employees, as it prepares its 2004-2008 Five-Year Strategic Plan. Comments can be sent to:

Julie Moore
Acting Vice President
USPS, 475 L’Enfant Plaza, SW, Room 5016, Washington, DC, 20260-5142.

They also can be e-mailed to 5YearStrategicPlan@usps.gov. Comments must be received by July 18.

USPS PROPOSES NEW CONSUMER-TO-BUSINESS PARCEL RETURN SERVICE

The Postal Service may soon be able to offer a new service that will make it easier for consumers to return merchandise to merchants. In a filing with the Postal Rate Commission, the Postal Service proposed a new experimental service that would offer reduced rates for shippers participating in a new consumer-to-business parcel return service.

The merchant, or an agent on the merchant’s behalf, would pick up the returned parcels at a designated postal facility, and pay the applicable postage. The prices for the new service would recognize the savings that are generated by the worksharing efforts of the merchant, such as picking up the returns at a Bulk Mail Center, or the local Post Office serving the consumer.

The service is proposed as a two-year experiment that would enable the Postal Service to gather information to propose a permanent service.

Details of the filing are available on the Postal Rate Commission’s website, www.prc.gov, select Contents, Docketed Cases and Matters, Mail Classification, and look for Docket No. MC2003-2.