The concept of balance is present in many philosophies, operations, and financial considerations, and requires that competing factors and forces be in equilibrium for balance to be achieved.

The analogy can be applied to the Postal Service which, financially, has been off balance for many years. The agency was debt-free at the end of fiscal 2005, i.e. until the Postal Accountability and Enhancement Act took effect in 2006.

One segment of the November 3 Mailers Technical Advisory Committee meeting’s focus group session on Customer Experience, Product Solutions, and Innovative Business Technology featured Sharon Owens, USPS VP for Pricing and Costing.

In her presentation, Owens sought to explain trends in the Consumer Price Index, on which the price cap on market-dominant rates is based, and the factors that determine the additional pricing authorities derived from the Postal Regulatory Commission’s November 2020 decision.

 By late June, the Postal Regulatory Commission likely had received more comments than it had expected about the Postal Service’s proposal to change the service standards for First-Class Mail and some Periodicals.

Aside from the briefs and statements of position from the eleven intervenors in the case, plus the commission’s “public representative,” the PRC also got comments from other groups and interested parties, including from 478 individuals from all over the country.  (Whether there was a coordinated campaign behind those isn’t clear; many of the comments didn’t follow a pattern.)

Part of the Postal Regulatory Commission’s process for considering a Postal Service request for an advisory opinion – like the one now before it regarding changes to USPS service standards – is the opportunity for intervening parties to ask questions of Postal Service witnesses, based on their written testimony.

Last month, as an intervenor in the case, Mailers Hub submitted questions to three USPS witnesses: Logistics VP Robert Cintron; Stephen Hagenstein, Director, Logistics Modeling and Analytics; and Acting Budget Director Curtis Whiteman.  Some were about vehicle utilization and dispatch times, while others focused on the reasons for the changes that were proposed.  After some debate over what constitutes a “question” (the number that can be submitted is limited at 25), the USPS witnesses filed their responses on June 1.

Clearly Louis DeJoy did his reading – reports by the Office of Inspector General, GAO studies, and such – and probably Envisioning America’s Future Postal Service, the 10-year plan developed by the Boston Consulting Group and released by then-PMG Jack Potter in March 2010.  All of that, plus what he’d been told by his circle of selected advisors and his own strong opinions, likely influenced what eventually emerged in his own 10-year Plan, also released in March (2021).

However, unlike Jack Potter or, for that matter, any of the PMGs who’ve led the USPS over the past two decades, Louis DeJoy has no real, first-hand knowledge of the Postal Service or the businesses of its customers.  Holed-up in his office at L’Enfant Plaza, he’s spent scarcely any time learning about the mailing business or the connected industries that take messages from concept to recipients’ mailboxes.

For anyone reading a novel, or watching a play, television show, or movie, a requirement applies that the individual participate in the story by setting aside any logical analysis, in favor of accepting the premise of what’s being presented. This voluntary engagement is referred to as “suspension of disbelief,” a term coined by Samuel Coleridge in 1817, based on one used by the Roman poet Cicero centuries earlier.

Of course, the story need not be purely fictional; in The Crown, for example, the characters and general plot are factual, but “suspension of disbelief” is necessary to accept that events and dialogue occurred as re-enacted. For the viewer, how the writers and actors present the story can shape perceptions of the factual background and, in turn, the conclusions the viewer reaches about the history being portrayed.

There was a commercial for Toyota that aired several years ago that had the tagline “You asked for it, you got it.”  What “it” was hasn’t been remembered as well as the tag line, but the utility of the line persists.

In this case, given that the Postal Service finally issued its 10-year plan last week, the agency can say “you asked for a plan, you got a plan.”  Congress and the mailing community have been waiting for years for The Plan that the agency’s been promising, and now we can all see whether the result has been worth the wait.

Over the past few months, and especially over the recent holiday season, there were many occasions on which a postal customer – a representative of a commercial mailer, a mailer’s client, or just a retail customer – delivered a message of dissatisfaction about service (to put it nicely) to a frontline postal employee.

Whether a retail window clerk, a city or rural carrier, an employee at the local BMEU or DMU, a customer service rep, or a call-taker at the Business Service Network, that person neither had anything to do with the reasons for the customer’s dissatisfaction and likely had little to go on to offer an explanation or information about the reported service problem.

On January 26, speaking to the virtual meeting of the Mailers Technical Advisory Committee, Postmaster General Louis DeJoy gave a broad overview of his developing plans to get the Postal Service back on track after months of worsening service that culminated in a historically bad holiday season.  As transcribed from his recorded remarks:

“... Calendar Year 2020 has been a tough year for the nation and a tough year for the United States Postal Service.  The causal circumstances continue to plague us in early 2021.  As a result, the consequences to many Postal Service customers have been significant, and we acknowledge the impacts our service decline has had on your businesses and our responsibility to restore.

In the wake of the Postal Regulatory Commission’s issuance of a final rule amending the rate-setting process, rumors began to circulate that the Postal Service would seek higher rates by mid-2021 and that the increases would be over 7%.

These stories may have some relationship to facts but are not entirely factual or accurate. Just the same, given that rumors travel faster than facts, it’s important that commercial mail producers have the necessary information to convey to their clients – who may already have heard the rumors.

Commercial mail producers and others whose businesses have regular contact with postal services may be aware of a price increase but not really understand why it happens or what it means.  As we did last year, in an attempt to offer answers, below are some of the questions that commercial mail producers and their clients may have.

Price changes generally

In comments filed February 3 with the Postal Regulatory Commission in response to the PRC’s proposed rule (System for Regulating Market Dominant Rates and Classifications, published in the December 11, 2019, Federal Register), Mailers Hub offered a view about “non-compensatory products,” (market-dominant products whose rates do not cover costs). The passage discussing such “underwater” rates was also excerpted in the February 3, 2020, issue of Mailers Hub News:

“Most non-compensatory classes and products did not become ‘underwater’ in a year or two or even ten; Periodicals, as a class, for example, hasn’t covered its costs since the PAEA was passed.

“… Aside from the resistance of ratepayers in those classes or for those products to accelerated rate increases to bring them to full cost coverage, the PAEA itself thwarted such efforts; the CPI cap is a two-edged sword that keeps rate increases to no more than CPI but also prevents larger rate increases to correct ‘underwater’ classes and products. …

“That cost coverage for non-compensatory classes and products needs to be brought to 100% is not debatable, but neither is the need for caution in how that’s to be done. … Though the price sensitivity of most non-compensatory mail will be challenged by an additional 2% per year rate increase above the CPI cap, requiring that seems the least than can be done.

A report released early last month by the Postal Service’s Office of Inspector General (A Closer Look at Postal Labor Costs) illustrated the persistence of labor as representing the lion’s share of the agency’s total costs. In turn, it offered ratepayers a glimpse of both the magnitude of the expense and how the elements of the sum have changed over the previous decade.

The following is the second in a two-part commentary, excerpted from the Dec. 9 edition of Mailers Hub News

Changes step 3

The following article is an excerpt from the Dec. 9 edition of Mailers Hub News

In an order issued on December 6, the Postal Regulatory Commission approved the First-Class Mail rates proposed on October 9 by the Postal Service, as those were later corrected on October 10 and amended on November 20.

People often ask about price changes – why they’re when and what they are, and why the USPS can’t simply reduce its costs. It’s really not that simple.

The Postal Service has filed new prices for market-dominant mail that, if approved by the Postal Regulatory Commission, will take effect on January 26, 2020.  The average increase for the market-dominant classes of mail is 1.9%, in line with the CPI-based cap; First-Class Mail will increase, on average, by 1.919%, and Marketing Mail prices will rise by an average of 1.891%.  Barring problems during the PRC’s review of the filing, a decision should be expected by mid-November.

New prices for competitive products, set by the Governor of the Postal Service, also were announced.  They will be reviewed for statutory compliance by the PRC and, barring problems, also will be effective January 26.

There is still time to make the 2019 Mailers Conference.

Commentary, by Leo Raymond

Any publication on any topic occasionally finds itself in the situation of knowing newsworthy events lie ahead but about which an article cannot be yet written; they just have to wait. Such is the situation in which we – and colleagues with their own newsletters – find ourselves.

Excerpted from the February 4, 2019 edition of Mailers Hub News 

The price of a stamp went from $0.50 to $0.55 last month but a challenge to that increase continues.