At last week’s first-ever National Catalog Advocacy & Strategy Forum, sponsored by the American Catalog Mailers Association, one of ACMA’s key issues centered on U.S. Postal Service network realignment.
ACMA executive director Hamilton Davison says it’s a contentious issue for catalogers, teetering on the political whims of Congress.
“Most would say that McDonald’s is ubiquitous in America,” he says. The USPS has 37,000 retail outlets in the USA. The McDonald’s restaurant chain has 21,000 worldwide.”
Wal-Mart has just over 4,100 stores, Davison adds, and “Wal-Mart made a name for itself serving rural America! These simple comparisons suggest the USPS has too many retail outlets by a lot.”
A rule of thumb in retail is that a chain needs to close or relocate 5% of their stores each year to make sure they are keeping up with population shifts, Davison says. “The USPS opens new retail outlets to meet emerging needs, but anytime they try to close a location, they feel a backlash from members of Congress who hear from a small number of constituents opposed to this closure.”
During a forum breakfast meeting at the National Democratic Club on June 27, Frank Davis, senior policy adviser to U.S. Rep. William Lacy Clay, D-MO, addressed postal network realignment with attendees. “What you’re talking about is political,” he said.
“It’s a slow process with no one member of Congress wanting to take the lead. Constituents are seeing it as a service,” Davis said. “Your group is looking at it from a business approach.”
Jennifer Keaton, senior legislative aide for U.S. Rep. Carolyn Maloney, D-NY, said: “You have a lot of parochial interests. People get upset when a mailbox is taken off their corner.”
But Miles Kimball president/CEO Stan Krangel said the reason the ACMA is “fired up” about the issue is because “if we don’t do something, you might be in front of an empty room next year. There is a sense of urgency.”
Davis and Keaton advised ACMA members to keep writing their congressmen because those letters are taken very seriously. “When we get a letter from an individual or a business, a file is started,” Davis said.
Davison argues that Wal-Mart has made a name for itself in logistics, serving the entire U.S. from 112 distribution centers. “The USPS has 270 processing and distribution centers,” he says. “While retailers and others who manage large logistics supply chains close and reorganize distribution centers periodically to improve their cost structure, historically, closing a plant has been a big deal for the USPS.”
What’s more, Davison says the USPS has wanted to complete network realignment for quite some time, “but political forces in Washington have prevented any changes that involve a reduction in jobs. The result is a massive fixed cost structure — variously quoted as 70% to 80% of the $75 billion USPS — that is in no small part driven by their retail and plant location footprint.”
As ratepayers, Davison says catalogers support this massive infrastructure. “USPS must raise its postage to support these costs,” he says. “Mailers of all types, and the average American who also pays this cost through their purchase of stamps, need to tell their members of Congress to let the USPS management do the right thing and operate the most efficient network possible free from political considerations.”