In the latest installment in what’s become a years-long rulemaking by the Postal Regulatory Commission, a trio of industry associations has asked the PRC to delete a provision of its most recent proposal.

A brief recap

In its May financial data (see the article on page 8), the Postal Service reported mail processing costs that were 8% over plan and workhours that exceeded plan by 8.5%.  The agency commonly attributes this situation to the workload associated with higher parcel volume.  However, while it’s reasonable that more work hours are needed to handle surging parcel volume, there’s been no indication whether the USPS is concurrently capturing workhour savings because of greatly decreased letter and flat mail volume.

Last Tuesday, June 16, Louis DeJoy was sworn in as the 75^th Postmaster General. Since his May 6 appointment by the Postal Service’s Board of Governors he’d spend weeks working with retiring PMG Megan Brennan, getting briefed on the agency he would be leading. Now the job was his.

Thanks and greetings

Just last month – on May 1 – the Postal Service filed a request with the Postal Regulatory Commission seeking to delete Customized Postage as a service.  Among the reasons it offered was that “the eligibility criteria have become the source of customer complaints and the subject of legal disputes.”  (Authorized Customized Postage vendors are required to apply criteria “to ensure that the types of content included in customized postage are appropriate in light of the purposes of the program and the potential audiences, in order to safeguard the Postal Service’s legal, financial, and brand interests.”)

In that filing, it didn’t mention that, as if to support its statement, it was in court at that time with a customer whose design had been rejected.

Last April, the Postal Service, and its commercial customers feared the decline in mail volume driven by pandemic-related business shutdowns would turn into a freefall.  Early in that month, the agency shared initial volume and revenue projections with members of the House and Senate committees having postal oversight responsibilities.

Billions in losses

According to Google Maps, someone driving from Inglewood (CA) to Ft Myers (FL) at a steady 70 miles per hour would need 38 hours to complete the 2,659-mile trip.

Of course, in the world of commercial shipping, an item being sent from Inglewood to Ft Myers wouldn’t travel like that, instead taking a slower, likely longer route, perhaps through intermediate transfer points along the way.

The article below was produced by Merry Law, Mailers Hub’s expert, and consultant on international mail. Merry may be reached at [email protected].

COVID-19 closures, lack of transport capacity, self-declared inbound rates, expiring USPS consolidator contracts, no bilateral agreements with other countries: Taking this a piece at a time can make sense of what is happening, who it affects and how. Let’s start with the more temporary effects of the current pandemic crisis and move on to the longer-term matters.

As the economic impact of the COVID pandemic came into full force, the consequences for mail volume, and Postal Service revenue, were reflected in the agency’s April financial results. Overlaid on this was the burden of various prefunding obligations and the usual fluctuating valuation of the Postal Service’s workers’ compensation liability.

Volume and revenue

Note: This article was initially published with an error in attribution; this article was written by Leo Raymond, Managing Director of Mailers Hub.

In the midst of the Great Depression, newly re-elected President Franklin D. Roosevelt proposed the Judicial Procedures Reform Bill of 1937. The measure would increase the size of the Supreme Court to as many as fifteen justices by allowing the president to appoint up to six additional justices, one for every member of the court over the age of 70 years and 6 months. Roosevelt had chafed at the court’s rejection of several of his New Deal initiatives, so the plan would have let him add enough new members to the panel to ensure a majority would favor his proposals. Opponents, however, called the proposal “court-packing,” for obvious reasons.

Note that, after this article was published, the Deputy PMG, Ron Stroman, announced he’s resigning effective June 1.  That will be covered in the next (May 25) issue of Mailers Hub News.

In a press release late on May 6 (below), the Governors of the Postal Service announced the selection of Louis DeJoy as the 75th Postmaster General, at last providing a successor to Megan Brennan whose retirement was scheduled to take effect January 31.

In the simplified versions of history we often use in conversation, a past disaster is reduced to its ultimate scenario and immediately preceding event: the Titanic hit an iceberg and sank. In fact, as with most disasters, there’s more to the story: the Titanic was speeding in the dark in an area that its captain had been warned had icebergs, contributing to both not seeing and not being able to timely avoid the berg.

Many disasters have been analyzed forensically, providing a 20-20 view of all the contributing factors and unfortunate decisions that led up to the final scene of the drama. Seldom are we, as observers, able to watch as factors and decisions unfold in our view, moving toward a disastrous result that, despite the warning signs, seems inevitable.

A few legal definitions:

• Reckless endangerment is “behaving indifferently to the consequences [of an action or inaction] in such a way as to create a substantial risk of serious physical injury or death to another person.”

(Continued from April 10, 2020. Full article found in the March 29, 2020 edition of Mailers Hub News.)

House supporters

By voice votes in the Senate on March 26 and the House on March 27, Congress last week passed HR 748, the Middle Class Health Benefits Tax Repeal Act of 2019, a $2.2 trillion program to help the nation’s economy and citizens deal with, and recover from the consequences of the ongoing virus-related crisis. Conspicuously missing was any aid for the Postal Service. Instead, the bill only allowed it to borrow another $10 billion from the Treasury, going even deeper in debt.

The scale, scope, and ubiquity of the current health crisis is a situation none of us has encountered before. While we all have to adapt in our personal lives, we also need to do what we can to keep our businesses alive. From the information that’s available, it would seem that the days of uncertainty, challenge, and sacrifice are far from over, and no commercial mail producer has the ability – or bank account – to allay all the fears or overcome all the challenges by itself.

Now, more than ever, members of the commercial mailing community need to work together. 

Our job at Mailers Hub is what our tagline says: to bring commercial mailing, solutions, and resources together – and we’ll do that by providing information and a place to get it.  On our site, as information becomes available, we will do our best to communicate it in a timely and useful manner.  As problems arise for the industry and individual providers, we will do our best to act as a resource and network to help facilitate solutions.  We all need to do what we can; we hope our part will serve our colleagues well.
 
As always, contact us as needed.

FOR UPDATED INFORMATION: https://mailershub.com/covid-19 

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.

It’s that time again: politicians hoping to get into (or stay in) office are trying to reach voters to garner their support, and are still turning to the mail as the medium for their message.

Of course, those candidates and their staffs – as during every election cycle – will want the mailing service company to get their mailings out first and the Postal Service to give them expedited handling, all the while asking for credit until after the election to pay the mailing company’s bill.

Persons bored by legal matters may dismiss the PRC’s inquiry into the regulations implementing the Private Express Statutes as just more pointless inside-the-Beltway bureaucratic paper shuffling. Such an opinion, however, would seriously misunderstand the nature of the discussion being started.

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.

Despite telling Congress early last year that it was finalizing a ten-year plan, and later explaining the delay in its issuance by the need for its review by oncoming members of the Board of Governors, the document released last week by the USPS, Ready-Now ➔ Future-Ready, The US Postal Service Five-Year Strategic Plan 2020-2024, was somewhat less than what was anticipated.