U.S. Senator Olympia J. Snowe (R-Maine), Ranking Member of the Senate Committee on Small Business and Entrepreneurship, today sent a letter to John E. Potter, the Postmaster General of the United States, urging him to consider the impact on small businesses of reducing the United States Postal Service’s (USPS) delivery week from six days to five. Snowe cited the potential negative consequences such an action could have on America’s roughly 27.2 million small businesses.

“America’s small businesses depend on reliable and consistent service from the USPS, and they could suffer significant setbacks by a shortened mail delivery week, such as lost sales, order backlogs, and job cuts,” said Senator Snowe. “While I understand the Postmaster General’s desire to reduce costs, it is imperative that his actions not have a detrimental effect on consumer spending or the small businesses that make up the backbone of our economy.”

Postmaster General Potter announced the possibility of shortening the USPS’s delivery week in late January, citing his agency’s potential $6 billion deficit this fiscal year and the difficult economic climate. The United States Postal Service, which is the nation’s second-largest employer, is the only mailing service that delivers to every address in the country.

The text of the letter is below:

Mr. John E. Potter
Postmaster General and Chief Executive Officer
United States Postal Service

Dear Mr. Potter:

In light of your recent announcement that you are considering cutting postal delivery by one day per week, I am writing to request that you consider the potential harmful impact this action could have on America’s 27.2 million small businesses.

A six-day delivery week is essential to ensuring that our nation’s small businesses are able to reach their customers in an appropriate and well-timed manner. According to the United States Postal Service’s (USPS) website, on average the USPS delivers to 9 million businesses each day your trucks are operating. As Ranking Member of the U.S. Senate Committee on Small Business and Entrepreneurship, I am concerned that reducing your delivery week by one day may have devastating consequences for mail-order and internet-based businesses, newspapers, and the millions of small companies that utilize the USPS for timely mail delivery.

In my home state of Maine, thousands of businesses – large and small – depend on reliable and consistent service from the USPS. From retail clothing and outdoor specialist L.L. Bean to the dozens of Maine fishermen and lobstermen who ship fresh seafood across the world – and companies in between – Maine businesses simply must have access to a postal service that can deliver on a regular basis. These firms could all suffer significant setbacks by a shortened mail delivery week, from lost sales, to order backlogs, to job cuts.

While I understand your desire to slash costs and your overall concern given the tremendous economic crisis our country is facing, it is imperative that your actions not have a detrimental effect on consumer spending or the small businesses that make up the backbone of our economy. I hope that you will keep me informed of your findings as you weigh the consequences a shortened mail week would have on our country’s small firms.

Please note: Mr. Potter may deviate from the prepared remarks

Thank to all of you for taking time out from your busy schedules to join us today.

I’d like to congratulate St. Louis on their selection as PCC of the year and thank them for hosting this year’s national event.

Before we get down to business our thoughts and prayers go out to those whose lives have been disrupted by Hurricane Ike – all the way from the gulf right up through the Midwest. For some, the effects will be short lived-for others the road to recovery will be a much longer journey.

My congratulations to Pat Donahoe and his postal team for their constant communication as the storm moved ashore and for quickly reopening facilities and delivering mail when safe conditions allow.

You can count on us to do our small part to help bring a sense of normalcy back to the affected areas.

I also know the outreach to those affected goes well beyond the postal service. The postal industry is reaching out to those impacted mailers to lend assistance. At times like these I am especially proud to say that I am a member of the greater Postal family.

Let me be candid, the mailing industry and the postal service are in the midst of a hurricane of events that as an industry we have little control over. As a result, our industry finds itself in the most difficult time since the 1960s.

When we met last year, no one could have predicted the severity of today’s economic climate, fluctuating oil prices, inflation in paper prices, the collapse of financial institutions, tightening of the money supply, weak retail sales, and just this week a one day drop in the market of over 500 points.

When combined with diversion of hard copy messages to the internet and growing environmental concerns about mail’s impact, mail volume is down by some 9 billion pieces in 2008.

The trend is not good and, unfortunately, there is no sign that the economy will turn around in the near term.

Our marketplace — the American people and American business — is in transition. Both groups are looking for new and innovative ways to streamline and speed communication.

We must accept that fact.

We cannot sit around and wring our hands. We cannot sit around and ignore the reality of what’s happening.

We have to do what we have done time and time again: we have to refocus on the basics of the business and reinvent ourselves.

We have to take hard-copy mail to the next level. And we must do it together.

All of us have to reach out to new audiences. We have to innovate. We have to develop new ways for the American people and American business to use mail.

All of us have to talk about — and demonstrate — the value of mail with our bosses and perhaps with our boss’ boss!

The days when hard copy mail would sell itself and when marketing directors and product managers would say, “Let’s see what mail can do?” are passed. We have to approach the business in a whole new way.

I promise you that the postal service is approaching the business in a whole new way.

Let me assure you that we will keep our priorities in order. The postal service will focus on you.

You — and your clients — are the star of the show and the reason that we exist. For us, it is simple — provide timely universal mail and shipping services that meet your needs.

Yes — service is what we are all about. It is our franchise, the very reason for our existence.

The American people and American business entrust us with letters, magazines, catalogs and packages. It’s our job to get them delivered on time.

Transit time performance has steadily improved over the years and this year is no exception with new all time highs in first-class mail.

Under the new law, the transparency bar has been raised for our market dominant products. Working with the mailing community and the postal regulatory commission, we have developed a new set of modern service standards for each class of mail.

We will begin measuring performance against these standards this year.

There is more to good service than just transit time. Let me assure you that we look at service in a broader sense.

For example – a few areas we are working hard to innovate and improve are:

* Our external measure of customer satisfaction
* Package scan rates
* Business service network effectiveness
* Our web site – usps.com

For us, service has no limits —service is number on and always will be.

I want to assure you that even with the challenges we all face, we will not lose our focus on you and the service you require.

Ladies and gentlemen, the marketplace is changing rapidly, as customer demand changes. The mailing industry cannot afford to stand still one day longer. Failure to make the changes necessary to compete tomorrow, and invest in those changes today, will doom the mailing industry.

We plan to continue to invest in the future to create a robust information network that will increase mail accuracy, affordability, and speed.

Of course, I am talking about the intelligent mail barcode.

The future needs to be built on a strong value foundation. We’ve already talked about service. But, the other important element of the value equation is price.

And here — given the economy and just like all businesses — the postal service faces a significant challenge – managing costs in a slow business environment.

You know, we have taken great pride in reducing our costs by $1 billion or more in costs each of the last seven years. However, when I look at the next fiscal year, the magnitude of the need to lower costs is greater than anything we have ever accomplished.

We have worked hard to improve our productivity.

First, by matching our use of resources to changing workload resulting from volume fluctuations and the mail makeup. It all comes down to basic scheduling and staffing.

Second, through capital investment in processing and handling equipment.

And third, by changing and streamlining our processes as an industry from creation to delivery of mail, eliminating waste and redundancy

We’ll continue to do these, but we will also concentrate on a new element: building revenue through innovative growth.

We will strengthen our product offerings and use the new pricing flexibility afforded by the recent change in law, to grow volume.

Will we be successful in eliminating the gap between next years’ expected revenues and our growing costs?

Well, we’ll do our best!

We have the management team in the field and at headquarters that can do it!

We have a robust industry that is actively engaged, for example, 14,000 of you with us today.

And I am convinced we can mobilize all our employees in the effort!

And you have my assurance, that we won’t jeopardize the future for short term results.

It is a business imperative that we take the actions today necessary to assure affordable prices into the future.

Internally, we are aggressively managing costs:

* consolidating tours
* restructuring delivery routes
* reducing administrative costs

We’re counting on your support as we make these transitions

Balancing the strengths of labor and capital are powerful tools to address costs. And it has worked well for the postal service.

For example, the product of our investment in letter automation is mail walk sequenced, ready for delivery by postal carriers.

Utilizing the letter game plan, we have begun to walk sequence flats using the flat sequencing system (FSS).

My thanks to Postal Customer Councils and the mailing industry for all their advice and assistance in developing the flats sequencing concept. A special thanks goes to the Mailers Technical Advisory Committee.

What is FSS?

Simply stated it is a sophisticated piece of equipment that will replace the most labor intensive part of the letter carrier’s workday — organizing flats in delivery sequence.

What does it mean for you?

* affordable prices
* improved on time performance
* greater transparency
* and reduced mailer preparation costs.

In an FSS environment you will not be required to sort flats to the carrier route to qualify for a lower rate: the sort requirement will be to the 5 digit level or a group of 5 digits

FSS clearly benefited from your ideas. Please continue to share ideas on how we can innovate to reduce our costs — and ultimately yours.

Our industry has a long history of working together. Mailers and the postal service together have looked at our processes to find the least-combined-cost-method for getting the mail delivered.

Whichever side could process the mail more efficiently, got the work. This strategy led to presorting and pre-barcoding.

The results speak for themselves — the most efficient letter mail system in the world.

These are exciting times. Innovative times.

We have built our industry by working together, by comparing notes, and sharing ideas.

Rest assured that we will look at every idea — wherever it comes from — and evaluate its potential. The next great work sharing idea just might be yours.

So, speak up and help us keep mail affordable.

I am the first to acknowledge that cost cutting alone won’t bring long term success. I am also the first to acknowledge that the business model we relied on for success -

That is, the cost of servicing an ever growing number of deliveries will be paid for by price increases at the rate of inflation and volume growth, can no longer be taken for granted.

That may have worked when we had a true monopoly.

However, those days are gone. And we compete for every dollar of revenue we receive.

So, besides aggressive cost management strategies we are committed to efforts to expand and grow our revenue base.

The first step was the recent realignment of our marketing functions.

Our new structure will help us innovate and bring to market new products and pricing, while we continue to provide you with even more responsive customer support.

I’m excited about our new management team.

David Shoenfeld, person with 20 years of marketing experience at FedEx, has joined us as senior vice president of mailing services

Steve Kearney has stepped up to the position of senior vice president of customer relations.

We were fortunate that Bob Bernstock, a person with strong private sector consumer product and marketing experience joined us as president, mailing and shipping service.

So far — service, future investment, affordability, which yields growth.

The absolute key to success is the human element — our people. And I am talking about your people as well as ours!

Each, regardless of their role, is a vital link in the long mail value chain.

We need to keep the lines of communication open across the mailing industry — including to every member of the industry, regardless of their role.

Make them part of the team that will help all of us refocus and innovate, and move the mailing industry to the next level.

I remain convinced that once the economic storm passes, our industry will rebound and we’ll come out even stronger.

Yes, there will be tough days ahead, but, if we all remain focused on the fundamentals of our industry,

And if we reach out to new audiences, we will again reach new heights.

And I am certain that PCCs and their members can lead the way!

Thanks for coming . . . I look forward to seeing you at the National Postal Forum in Washington next May.

Citing fluctuating oil prices, inflation in paper prices and the strife in the financial markets, Potter described challenging economic conditions as the most difficult time since the 1960s. The additional move of hardcopy messages to the Internet and questions about mail’s environmental impact have led to a volume decline of 9 billion pieces this year.

Despite the tough times, Potter called on the mailing industry to seek new sources of growth.

“We have to approach the business in a whole new way,” Potter said. “We have to develop new ways for the American people and American business to use the mail.”

Despite the challenges ahead, Potter remains confident in the strength and commitment of the Postal Service and the mailing industry as a whole.

“Once the economic storm passes, our industry will rebound,” Potter told the audience of 14,000 PCC members. “If we remain focused on the fundamentals of our industry and if we reach out to new audiences, we will again reach new heights.”

The Postmaster General’s comments came during the national Postal Customer Council (PCC) Day broadcast, an annual event that brings mailers, industry partners and customers together to recognize their contributions to the Postal Service and outline future plans and goals.

One of these goals is to continue to improve record-setting levels of service. Working with the mailing industry and the Postal Regulatory Commission, the Postal Service has developed a new set of modern service standards for each class of mail and will begin measuring performance against these standards this year. In addition, improvements in customer satisfaction, scan rates, network effectiveness and the Postal Service’s website, usps.com, will be top priorities moving forward, Potter said.

“Service is what we’re all about. It is our franchise, the very reason for our existence,” he said.

Potter also called on the mailing industry to adapt to the changing marketplace and invest in the future. The Intelligent Mail Barcode is one way the Postal Service is leveraging technology to provide greater value and ease to business mailers, he said. Storing three times the amount of data of the current barcodes, the Intelligent Mail Barcode helps customers manage mail flow by uniquely identifying every piece in a mailing. The technology allows mailers to sort, track and receive address correction, all from one barcode.

Affordable prices that deliver value are a key element to retain and grow business, Potter said. The agency has reduced costs $1 billion or more for each of the past seven years and, through creative business solutions, absorbed the $700 million rise in fuel costs last year so that these costs were not passed on to customers as fuel surcharges.

“The price you see is the price you pay,” Potter said.

Reduction in costs alone will not be enough to overcome difficult economic times, he said, identifying several opportunities for growth through innovative new products, including a new, large Priority Mail Flat Rate Box and using the mail for recycling and product take-back programs.

Potter took a moment in the broadcast to recognize the recent devastation caused by Hurricane Ike and pledged the Postal Service’s continued support to victims in the areas affected by the storm, acknowledging the organization’s role to “bring a sense of normalcy” to the affected areas.

The Postal Customer Council (PCC) is a network of community-based business mailers and representatives of the U.S. Postal Service, who gather regularly to share ideas and resources to create a closer working relationship. On both the national and local levels, PCCs work to improve service and communications.

To help keep the lines of communication open, the Postal Service has launched the first official postal blog at 2blogPCC.com. Customers can discuss important topics facing the mailing industry, access the latest information and provide feedback.

National PCC Day also showcases the work of PCCs and includes a series of awards recognizing outstanding service and individual achievement. The following award winners were announced:

* PCC Industry Member of the Year: Peggy Smith, Co-Chair, Greater St. Louis.
* PCC Postal Service Member of the Year: Victor Laudisio, Customer Relations Coordinator, Buffalo/Niagara.
* PCC of the Year: A tie! Buffalo/Niagara and Greater New York (large market) and Capital Region (small market).
* PCC District Manager of the Year: Charles Howe, Greater Michigan District.
* Communication Program Excellence: Greater New York and Capital Region (gold), Buffalo/Niagara and Greater Dallas (silver) and Fort Worth and West Michigan (bronze).
* Education Program Excellence: Capital Region and Greater New York (gold), Buffalo/Niagara and Greater Atlanta (silver) and Greater Cleveland (bronze).

More information on Postal Customer Councils and National PCC Day can be found at usps.com/nationalpcc.

On July 1, Potter announced that he had created two new divisions, Shipping and Mailing Services and Customer Relations, and strengthened another, the Office of Intelligent Mail® and Address Quality. All are intended to position the Postal Service to meet the challenges ahead.

Mehra will be responsible for an end-to-end, mail flow visibility strategy as well as for a seamless process for mail acceptance, payment, and delivery using standardized Intelligent Mail barcodes, continuous tracking, and mail-quality feedback in real time. She will report to Tom Day, senior vice president of Intelligent Mail and Address Quality.

Robinson’s duties will include pricing all postal and non-postal products and services, and providing analytical support and evaluation of all contract pricing and new product initiatives. She will report to Stephen Kearney, who was recently promoted to senior vice president of Customer Relations. Kearney served previously as vice president of Pricing and Classification.

“Pritha and Maura have both demonstrated their abilities to identify and understand the needs of our customers in a changing environment,” said Potter. “Their leadership skills will be invaluable as we continue to make the strategic changes necessary to help us improve service and increase market share.”

In her previous position, Mehra served as manager of Marketing Technology and Channel Management, where she led significant technological changes in business mail acceptance processes. She began her Postal Service career in 1990 as a computer programmer.

Formerly, Robinson was manager of Pricing Systems and Analysis, where she was instrumental in management of the Postal Service’s price changes and the transition to a new regulatory environment. She began her Postal Service career in 1998 as an economist.

Postal Service executives from across the nation are traveling to Orlando, FL today to attend the Postal Service’s 2006 National Executive Conference. The top several hundred postal executives will meet all day Wednesday and half the day Thursday to hear Postmaster General Jack Potter and other postal leaders discuss the successes of 2006 and the challenges of the future. Once known as a rather lavish and festive gathering for postal executives, the executive conferences conducted by PMG Potter are more business and less play. Beyond the full day business agenda, the conference is a good opportunity for executives to network and match notes with their peers.

The editorial, published in the August 21 print edition of the paper, asserts that “What has been sorely absent here is basic leadership from Postmaster General John Potter”, that both the PMG and the Office of Inspector General “failed to take allegations against Jaffer seriously when they first surfaced, and he failed to ensure that the proper controls were in place to prevent the kind of wasteful spending exemplified in the IG report”.

The piece concludes: “Potter and the leadership of the Postal Service have a choice to make now. The IG report documents a strong case, depicting a public official who ran amok with his official credit card, sexually harassed fellow employees and abused his trusted position. If Potter doesn’t think that merits criminal or other punitive action, perhaps it is time for a new leadership team to take charge of the U.S. Postal Service.”