PMG Henderson’s promises

Oct 01, 1998 9:30 PM  By

When he was named postmaster general in May, William Henderson vowed that catalog delivery would drastically improve this fall/holiday season.

Now, nearly a year since many catalogers suffered through the worst postal delivery service in recent memory, Henderson, in an exclusive interview with Catalog Age, is standing by his promise. He claims that this year the U.S. Postal Service is monitoring catalog mail volume more closely than ever to make sure few catalogs sit around bulk mail centers for very long.

Beyond his big challenge to improve service, Henderson steps into a situation that, at least for now, is mostly rosy. For one thing, the USPS has reaped annual profits of more than $1 billion for the past four years, the strongest run financially since the USPS was reorganized as an independent government agency in 1970. Furthermore, Henderson, who was the USPS’s chief operating officer when he was tapped to replace PMG Marvin Runyon, will be at the helm in January when the USPS implements its first rate increase since 1995 and the smallest increase in its history.

At the time of this interview in August, Henderson had just begun negotiating with the USPS’s two largest unions, the American Postal Workers Union (the clerks), and the National Association of Letter Carriers (the letter carriers). The outcome of these negotiations, he says, will be the “most crucial element” to containing postal rates in the future. The current contracts expire Nov. 20; Henderson says he hopes to reach an agreement that not only keeps wages in check but also improves relations between postal workers and management, which have traditionally been tenuous at best.

In the following interview, Henderson discusses catalog service, rates, and the future of the USPS.

Can you elaborate on your promise for better catalog delivery service this fall/holiday season? We’ve been monitoring catalog mail volume every day, comparing it to last year and prior years. Right now, we’re moving the mail [out of bulk mail centers and other postal processing centers] faster and to homes quickly. [A catalog delivery slowdown] simply is not going to happen, because there’s a high level of recognition among our field managers now.

Are you putting together any kind of plan to serve catalogers better than the USPS has in the past? We’re rolling out Priority Mail delivery confirmation [for parcels] right now. Beyond that, we’re introducing tracking-and-tracing for all classes of mail-a system that will take five years to develop. It will do three things: provide real-time automated information to postal plant managers to let them know the workload they should anticipate; create an accounting system to give us better insight to costs of a particular class of mail that would be tracked individually; and enable catalogers to see where their mailings are-each cataloger would have its own code and could go into our Internet site to find out when particular mailings would actually reach customers.

How will you continue to win catalogers’ parcel business from private-sector competitors such as United Parcel Service? Our services are cheaper and better. As UPS and Federal Express tend to reduce the number of delivery days and add surcharges, we’re becoming more reliable while developing a better infrastructure. Over time, we’re naturally going to become the parcel delivery service of choice.

In the postal rate case, we also introduced some pretty deep discounts with regard to residential parcel delivery, which was intended to spur on [the use of] freight consolidators. [For parcel post, for example, although the USPS will implement a 12.3% base-rate increase, it will also offer a 45-cent discount for parcels drop-shipped to destination sectional center facilities.] The whole key to our success with catalog parcels is reliability, and we’re working diligently on that.

What’s your long-term outlook for the future of postal rates? The most crucial element is labor negotiations. Assuming we can get a reasonable settlement, the future of rate cases will be a repeat of the [recent] past-smaller increases barring any unforeseen expense growth from labor. We’re trying to hold off the next rate increase until 2001. At that time, it would be for another penny in first class and less for Standard A mail than the [upcoming Jan. 10 increase].

Is postal reform-namely, the Postal Reform Act (H.R. 22), introduced in 1997 by Rep. John McHugh (R-NY)-necessary? Postal reform is very much needed. We’re standing still while postal services are changing rapidly worldwide. Through reform, the Postal Service needs to become a more commercial entity-more like business than government. It ought to be [freer] in the marketplace.