Nov. 15, 2011 — For the first time since the recession began in 2007, this year’s Postal Service loss was largely driven by the continued impact of the worst recession in 80 years and the effect of Internet technology—above and beyond the crushing and unique burden of the congressional mandate to pre-fund future retiree health benefits.

This mandate accounted for 100 percent of the losses over the previous four years.

That does not change what has to be done.

Congress must alleviate the pre-funding burden and the Postal Service and its stakeholders must work relentlessly to reinvent the Post Office for the 21st century.

Today we are working with the Postal Service at the bargaining table on doing just that.

via Latest News | NALC statement on Postal Service losses.

According to Federal Times, our representatives in Washington have come to yet another hard fought compromise on the USPS- they’ve agreed to wait another month before doing anything. The paper says a deal has been struck to allow the federal government (including the USPS) to exist for another couple of weeks while they figure out how they can make the most of the crisis they have created. That’s their job now, apparently.

The agreement would:

Defer a legally required $5.5 billion “prepayment” by the U.S. Postal Service for retiree health care, this time until Dec. 16. That payment was originally due Sept. 30; USPS officials say they don’t have the money to cover it.

So, in a nutshell, Congress has decided to defer for a few days the unique obligation that Congress placed on the USPS, knowing that the USPS has no way of satisfying that obligation, solely because of restrictions Congress has placed on the USPS.

Democracy in action!

via Congress strikes 2012 budget deal for some agencies – FederalTimes.com.

The US Postal Service announced today that it ended the 2011 fiscal year with a $5.1 billion loss. The numbers reflect actual operating revenue and expenses, and do not include the accounting gimmickry Congress and the Bush Administration imposed on the USPS in the 2006 PAEA law. (That law required the USPS to pay the Treasury $5.5 billion a year for a so-called “trust fund”. Because the USPS is “off budget”, and the trust fund is “on budget”, the USPS’s contributions artificially decrease the federal budget deficit by that amount each year. Republican Congressmen have used the deficit impact to falsely claim that allowing the USPS to use its own revenue to pay its expenses would be a “taxpayer bailout”.)

Here’s the USPS Press Release announcing the fiscal year results:

WASHINGTON — The U.S. Postal Service ended its 2011 fiscal year (Oct. 1, 2010 – Sept. 30, 2011) with a net loss of $5.1 billion. The year-end loss would have been approximately $10.6 billion had it not been for passage of legislation that postponed a congressionally mandated payment of $5.5 billion to pre-fund retiree health benefits.

Total 2011 mail volume declined by 3 billion pieces, or 1.7 percent, from 2010. The Postal Service’s largest and most profitable product, First-Class Mail, continued its year-over-year decline, from $34.2 billion in 2010 to $32.2 billion in 2011 (5.8 percent), which dwarfed continued growth in its more competitive products, packages and Standard Mail.

USPS Shipping Services revenue, which includes Priority Mail and Express Mail, increased $530 million in 2011 (6.3 percent). The increase in Shipping Services revenue was driven by strong growth in the Parcel Select and Parcel Return Services, due to increased mailings of packages, as customers continued to use the Internet more often to purchase products. Revenue from Standard Mail increased by $495 million (2.9 percent) on a volume increase of 2 billion Read the rest of this entry »

The Direct Marketing Association has sent the following letter to its members:

Dear DMA Member,

Your Business is Being Threatened.

On Monday, the United States Postal Service (USPS) told the Postal Regulatory Commission (PRC) that it will pursue its request for exigent – above inflation – postage increases. These increases would be above and beyond the already scheduled 2.1 percent increase set to take effect on January 22, 2012.

DMA believes that the future of the US Mail depends upon forward thinking. Rather than digging up the past, USPS should be looking forward and right-sizing its network, transportation, and employee complement. DMA immediately urged the PRC to reject the USPS’ plan, which relies upon old data and failed logic to support driving postage higher. This is not the time to drive more mail from the system.

On your behalf, DMA has already fought – and won – this battle once in 2010. Now we’re gearing up to win it for you once again. DMA successfully opposed the previous exigent case on the grounds that the circumstances didn’t warrant an exigent rate hike and that such a hike would in fact drive more mail out of the system at a time when USPS should be removing excess capacity.

Every step of the way, DMA has kept its members up to speed on the fast-moving postal debate. Our very own Direct from Washington e-newsletter delivers comprehensive information weekly. You have also had the opportunity to speak directly with postal policymakers through our “Postal Perspectives” Webinar Series, which focuses on the tough decisions and significant changes that must be made to improve the fiscal health of the USPS. These informal conversations with the policymakers at the center of the postal debate give you the opportunity to hear exactly what the experts are thinking about the future of USPS.

In addition to fighting rate increases at the PRC, DMA has been working hard to make sure that postal legislation in Congress safeguards the interests of all DMA members. We continue to work closely with key policymakers – on both sides of Capitol Hill, and both sides of the political aisle – and our efforts are really paying off.

• Just yesterday afternoon, the Senate Homeland Security and Government Reform Committee voted to send the “21st Century Postal Service Act” to the Senate floor. When this bipartisan bill was introduced last week, it failed to properly protect catalog products from steep and immediate postage increases. DMA worked with key leaders in the Senate to create a provision that safeguards catalogs appropriately before the bill was passed out of the Committee.
• DMA was also successful in fighting two proposed amendments that would have required USPS to create a national “Do Not Mail” program. Because of our efforts, these amendments were not even considered by the Committee.
• We are also fighting to defend the lifeblood of nonprofit mailers. DMA was able to keep a harmful provision that would have slashed the nonprofit rate preference from being introduced in the Senate. We are also fighting hard to have a similar provision removed from legislation being considered in the House.

We are not resting on our laurels. Instead, we will take to Capitol Hill next week for a special DMA Postal Hill Day on November 17 in Washington, DC. A host of DMA catalogers and DMANF nonprofit mailers will join DMA’s Government Affairs team in meetings with senior Congressional staff leading the way on postal reform in Congress.

We encourage you to join the hundreds of DMA members that have already taken “DMAAction” to support our efforts in Washington. Visit our DMAAction website today to learn how you can tell Congress to safeguard the interests of the mailing community!

Sincerely,

Linda Woolley

EVP, Washington Operations

Direct Marketing Association

The US Postal Service’s Inspector General issued a report last week suggesting that the USPS could save $675 million a year by outsourcing janitorial and truck driving jobs, and by slashing the pay of existing contractors. In its response to the audit, the USPS pointed out that it is already reducing wages under the new APWU agreement, which allows some USPS employees to be paid even less than a contractor: “…the new agreement provides for the establishment and use of non-career employees on a much wider scale than previously permitted and new employees will be paid at rates much lower than current career rates and, in some cases, lower than SCA [contractor's] rate”.

Here are some of the findings from the report, which was undertaken in response to a request from Congressman Darrell Issa:

Postal Service market research indicated that opportunities exist for cost savings if it did not have to comply with the SCA. In addition, our analysis showed that Postal Service wages for cleaning/janitorial and postal vehicle service (PVS) driver positions were higher than SCA rates. We estimate the Postal Service could save approximately $675 million annually if it outsourced cleaning/janitorial and PVS driver positions.Barriers to outsourcing the positions include current labor union agreements, concerns that new unions will be formed, workforce retention issues, fluctuations in market or economic conditions, and the potential for congressional constituency concerns.

We recommended the Postal Service seek exemption from the SCA to allow flexibility to negotiate contract rates closer to market rates. We also recommended the Postal Service review the benefits of outsourcing cleaning/janitorial service positions and Postal Service vehicle driver positions and restructure those positions to achieve the most cost effective solution. Lastly, we recommended that the Postal Service ensure that appropriate financial data is collected to aid in making in-sourcing/outsourcing decisions.

USPS OIG: Contracting Opportunities and Impact of the Service Contract Act

CA-AR-12-001.pdf (application/pdf Object).

More than 300 people jammed Sen. Bernie Sanders’ town meeting at Montpelier High School on Sunday about how to save the U.S. Postal Service. Sanders said he will introduce legislation this week to address the Postal Service’s financial woes without resorting to drastic cutbacks in service and massive layoffs.

He blamed the Postal Service’s money troubles largely on accounting issues, including a law requiring it to set aside retiree health and retirement benefits far in advance.

Sanders criticized Postal Service management for not focusing on smarter ways to solve their financial problems. “Our goal must be to make the post office smarter and more competitive. We should not be engaged in a series of actions which could eventually lead to the destruction of the Postal Service,” he said.

In an era of emails and the Internet, Sanders said barriers to modernization should be lifted to let the Postal Service compete with commercial rivals and set up new lines of business. “It is time for the Postal Service to move into the future, to offer Internet service, printing service, and all the other services appropriate for the modern age which are financially viable.”

Vermonters who filled all of the seats and lined the hall outside the high school cafeteria said the post office is essential in rural communities. “Look at the people here today,” said Bill Creamer of Bradford, Vt. who has worked for the post office for 24 years. “Senator, you take this back to Washington, Vermonters want their Postal Service.”

Sanders called the town meeting in response to Postal Service proposals to end Saturday deliveries, lay off 120,000 employees, close almost 3,700 post offices, including 15 in Vermont, and close 300 mail processing centers, including two in Vermont.

“In the midst of this horrendous recession, the last thing this country needs is to lose another 100,000 workers,” the senator said.

via Save the Postal Service – Newsroom: Bernie Sanders – U.S. Senator for Vermont.

From USPS News Link:

USPS has listed 90 commercial properties and 36 land parcels with a commercial real estate broker. Sale of these properties by broker Caldwell Banker will generate much-needed capital for the Postal Service.

“The Postal Service fully recognizes and supports the need to maintain a facility network that provides maximum levels of efficiency,” said Tom Samra, vice president, Facilities.

Samra said USPS real estate holdings are a valuable yet underutilized asset, adding there are numerous costs associated with maintaining surplus buildings. These costs are necessary to maintain their value, keep them in marketable condition and protect the safety of the public.

Now that the properties have been listed for sale, the Postal Service can reduce or eliminate these costs, as well as produce cash for the organization. Last year, USPS realized (insert amount) in sales of its real estate holdings.

Click here for a listing of the properties for sale.

via USPS News Link – Nov. 7, 2011.

(Note: yes, the News Link article actually does say “Last year, USPS realized (insert amount) in sales of its real estate holdings.”)

The USPS says it’s doing everything it can to cut expenses, but apparently that doesn’t include cutting back on some cherished executive perks, including the gym at USPS Headquarters. In a statement of work for prospective contractors posted at the Federal Business Opportunities web site, the USPS prefers the term “health promotion program”, but the services required sound like what you’d find at a pricey gym: aerobic exercise, weight training, Yoga, T’ai Chi, and, of course, “lifestyle counseling”.

The statement doesn’t mention how much the gym costs, but specifies that it must be open and fully staffed from 6AM to 8PM every weekday, and that managers of the facility have at least “a bachelor’s degree in a health/fitness-related field” and “certification from recognized industry organization”.

Here’s the statement of work:

Statement of Work 2 10.20.11

Fitness Center Management – Federal Business Opportunities: Opportunities.

BACKGROUND:

Prices for most Postal Service mailing services will change on January 22, 2012. Mailing services includes First-Class Mail, Standard Mail, Periodicals, Package Services and Extra Services. Prices for shipping services will also change on January 22. We will provide customers the new shipping services prices later this fall.

While actual percentage price increases for various products and services varies, the overall average price increase across all mailing services is capped by law at 2.1 percent, the rate of inflation as measured by the Consumer Price Index.

FIRST-CLASS MAIL HIGHLIGHTS:

• Letters (1 oz.) – 1-cent increase to 45 cents. This is the first increase in the price of a First-Class Mail stamp since May 2009.

• Single-piece letters additional ounce rate – unchanged at 20 cents.
• Postcards – 3-cent increase to 32 cents
• Letters to Canada or Mexico (1 oz.) – 5-cent increase to 85 cents
• Letters to other international destinations – 7-cent increase to $1.05
• The second ounce will be free for First-Class Mail Presort pieces weighing between one and two ounces.

ADDITIONAL PRICE ADJUSTMENT HIGHLIGHTS:

• The price increase for Standard Mail Letters is slightly below the overall average at less
  than 1.9 percent

• A new 3-month pricing option will be available to rent PO Boxes for people on the move and others that need a PO Box for a shorter time period.
• Delivery Confirmation will be free for several parcel products as the Postal Service continues to make tracking an integral component of parcels mailed at commercial rates.

ROLE OF THE POSTAL REGULATORY COMMISSION:

The new prices were filed with the Postal Regulatory Commission on Oct. 18, 2011. The Commission has 45 days to review the prices to verify they comply with the overall 2.1 percent price cap for each class of mail. The new prices will go into effect on Jan. 22, 2012.

The US Postal Service Board of Governors meets in closed session beginning at 10 AM this morning, and according to Postcom, they’re expected to announce a 2.1% hike in the price of postage: