MTAC Report: USPS Prognosis Not Particularly Good

If you were looking for good news, the February meeting of the Mailers Technical Advisory Committee (MTAC) was not the place to be. Deputy Postmaster General John Nolan summed up the state of the U.S. Postal Service this way: With mail volume and revenue down significantly, “the prognosis is not particularly good for the rest of the year.”

MTAC, which meets quarterly, is a joint mailer/USPS group designed to find ways to keep postal rates down and service levels up. At the first meeting of 2002, held in Washington, Nolan noted that the USPS has slashed nearly $1.2 billion from the budgets of postal facilities around the country. Yet despite such cuts — and the expected implementation of rate hikes on June 30, rather than in the fall as originally anticipated — the Postal Service could end up $4 billion short this fiscal year.

“We’re only spending money now on things that will generate savings,” Nolan said. “The rate increase won’t change that.”

The USPS’s sorry financial state wasn’t the only topic of discussion. Among other issues covered:

  • The current rate case

    USPS manager of pricing Ashley Lyons — the agency’s rate case architect — remained confident that the case would proceed on its new schedule. The lone protester to the settlement agreement, the American Postal Workers Union, delivered its formal protest to the Postal Rate Commission (PRC) on Feb. 14. Nonetheless, Lyons felt sure that the PRC would present its so-called recommended decision on March 25 and that the USPS Board of Governors would present its final decision on April 2. That would allow nearly three months to prepare for the implementation of the rate hikes on June 30.

  • Performance measurement

    In his update on the USPS’s Confirm bulk mail tracking program, which launched in October, USPS program manager Paul Bakshi said that the agency is seeking “start the clock” information from mailers — in other words, the actual mail dates of customers’ materials.

    “We didn’t know when we had accepted your mail,” Bakshi said — and of course, without that information, the USPS couldn’t provide mailers with an accurate performance measurement system.

    The Postal Service has been asking mailers to print special barcodes on their mailpieces. The USPS scans these barcodes once the pieces enter the mail stream, producing a record of when and where the agency began handling them.

  • Negotiated service agreements

    The USPS expected to release a report to Congress by the end of February on the status of its development of negotiated service agreements (NSAs). The agreements would allow the Postal Service to grant discounts to large-volume mailers in exchange for additional work-sharing.

    “We hope to kick off a debate between us and the Postal Rate Commission on how we might, through current regulation, make NSAs more applicable and easier for all of us to use,” said Deborah Willhite, USPS senior vice president, government relations and public policy.

  • Mail security

    In conjunction with USPS vice president of engineering Tom Day, whose unit in the Postal Service has irradiated government mail, the Postal Inspection Service has been building a program to continue reducing the risk of anthrax or other contamination to postal employees and consumers. The Inspection Service has also been studying the safety of postal vehicles and policing access to postal facilities.

    “We’re reviewing potential mailer initiatives with [saturation mailer] Advo and will have our task force work with mailers, and we would like mailer feedback,” said Jim Rowan, the Inspection Service’s chief inspector for security and technology.

  • The USPS transformation plan

    Postmaster General Jack Potter promised that mailers would be “pleasantly surprised” at the final draft of the Postal Service’s transformation plan. Potter’s pledge followed poor reaction to the agency’s initial draft. The Senate Committee on Government Affairs last year ordered the agency to produce the plan, outlining its goals.

The Postal Service is scheduled to present the plan to Congress and the Government Accounting Office on March 31. The agency had released the original draft on Sept. 30.

Regarding the initial draft, Jerry Cerasale, senior vice president, government affairs for the Direct Marketing Association, had said that “instead of plotting a course for the future, the Postal Service only mapped out where it stands today.” And speaking for the Alliance of Nonprofit Mailers, executive director Neal Denton chided the USPS for failing to “present clear vision of what the agency ‘wants to be when it grows up.’”

Don’t worry, Potter insisted at MTAC. Once the USPS releases its comprehensive transformation plan on March 31, “you’ll see a very clear plan of where we think we want to go,” he said. “Then mailers will have plenty of opportunity to jump on it with comments — a healthy part of the process.”

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