According to reports circulating on the web, the postal service has told the postmaster organizations that there will be no retirement incentive offered to postmasters. The USPS says that an incentive wouldn’t make sense, because postmasters who retire would, in most cases, need to be replaced. The organizations had suggested that postmaster vacancies would provide “landing spots” for other employees displaced by changes in the agency.

Another unconfirmed report says that USPS COO Pat Donahoe told a national telecon last week that there would also be no incentive offered to management (EAS) employees, or to letter carriers.

House Passes USPS Stopgap Relief
Resounding Vote of Support for HR 22

By a 388-32 vote this afternoon, the House of Representatives approved a substitute version of HR 22, the “United States Postal Service Financial Relief Act of 2009.” To find out how your Member of Congress voted, click here.

The measure now goes to the Senate for approval. NAPS and its members, along with other postal groups, will work to achieve Senate passage of the measure before September 30, the end of the 2009 fiscal year for the Postal Service. Without immediate relief, the Postal Service risks defaulting on its obligation to pay $5.4 billion this year to pre-fund retiree health benefits for future retirees.

NAPS President Ted Keating said after the vote, “Thanks to everyone who contacted their House Member to urge their “YES” vote on HR 22 today. Now let’s make sure the Senate does the right thing, and soon.”

Bruce Moyer
NAPS Legislative Counsel

Dukky, a revolutionary direct response platform which launched earlier this year, combines traditional direct mail with new media technology. Based on a study conducted by the DMA, 42% of interested direct mail recipients prefer to respond to offers online. Shawn Burst, founder and direct mail pioneer, developed a suite of products to capitalize on this finding by providing a stimulating online user experience combining gift cards and coupons.

A psychologically validated phenomenon, “coupon stigma,” partially explains the generally low usage rates of less than 2% of the traditional direct mail coupon offers. A Journal of Consumer Research study demonstrated that coupon users are stigmatized by others as “cheap.” The study confirms longstanding common knowledge that coupons are, in many cases, not socially acceptable. The Dukky Platform sees higher-than-normal redemption rates because both its offline and online distribution methods avoid this “coupon stigma” by completely changing the frame of reference: both physical and online coupons are reinvented as personalized gift cards.

This innovative patented technology will now be offering a web-service API for direct mail companies and agencies to build scalable, reliable direct mail solutions on the proprietary framework which was built using Amazon’s Elastic Cloud, Content Distribution Network and Simple Storage Service (S3). The API is also integrated with a custom Interactive Voice Response (IVR) component which allows consumers to activate offers over the phone.

Some of the other API features include: personalized URLs, custom landing page development, social media integration with over 45 social networks including Twitter and Facebook, customer profiling, segmenting and automated responders, e-commerce and live analytics reporting.

“Fortune 500 retailers worldwide have shown much interest in our current platform and we feel the API web service is the next appropriate step in the growth of our company,” says Shawn Burst. Burst states that “you have to see it to believe it” and encourages companies to try out the live demo, which can be viewed at:http://www.dukky.com.

Unaudited financial statements files with the Postal regulatory Commission report that the Postal Service lost an additional $865 million in July. That’s better than the $1.3 billion loss reported in June, but brings the total fiscal year to date net loss to $5.6 billion, with two months left left to report in the fiscal year, which ends September 30.

First class mail volume was down 10.9% from July 2008, Standard mail was down by %16.8%, and package services by 18.8%.

On the expense side, total expenses were up by 0.9%, or about $55 million. Personnel expenses, mainly salaries and benefits, were up by 3.8% from the prior year, or $167 million. City and rural carrier compensation expenses were up less than a percentage point from July 2008, while customer service and mail processing compensation (i.e. employees who work inside post offices and processing plants) was down by about 7%, or $104 million. The biggest contributors to the increase in compensation were “other” employees, i.e. administrative, maintenance, postmasters, etc., where compensation was up by 33% or $245 million, and workers compensation payments, up by 17.3% or $18 million.

Westlake Village, CA – August 24, 2009 – Zumbox, the world’s first and only paperless postal system, today announced the closing of its Series A funding with a total of $8 million raised. Investors include Art Bilger (Managing Member of Shelter Capital Partners, LLC) Rick Braddock (Chairman and CEO of Fresh Direct and former Chairman and CEO of Priceline.com), Michael Eisner (Founder of The Tornante Company and former CEO of The Walt Disney Company), Bill Guthy (founding principal of Guthy-Renker) and Donn Rappaport (CEO of Zumbox and Founder and Chairman of ALC).

Zumbox has created a web-based platform that powers the world’s first paperless postal system. The company has created a digital mailbox – a Zumbox – for every street address in the country. Postal mail can now be sent as digital files and received online, with no paper, printing or postage, and no scanning.

Zumbox represents the first practical alternative to traditional postal systems. By using Zumbox, businesses and other organizations not only enjoy significant reductions in their mailing costs, but also substantially reduce their environmental impact. Consumers enjoy greater convenience as well as a richer mail experience by accessing their mail online, going paperless, and receiving multimedia content in an entirely new and innovative way. Zumbox also represents an important alternative to commercial e-mail. Zumbox is secure (it is a closed system with bank-level security); it is based on an individual’s permanent street address as opposed to his or her e-mail address (providing greater accountability and reliability); it offers rich media capabilities; and Zumbox is spam-free.

“Despite a severely challenging economic climate, we were able to successfully complete this round of funding,” said Zumbox CEO, Donn Rappaport. “New investors include some of the most well-known and widely-respected names in the technology, marketing and entertainment industries.” Adding, “Zumbox is an idea whose time has come. We see their support as a testament to the fact that the world is ready for this new communications medium.”

Following a successful pilot in New Lenox, IL, Zumbox has exited beta and will launch the first stage of its national rollout starting in Q4 of this year. The company will facilitate delivery of paperless mail to approximately one million households in select markets through partnerships with municipal governments and media companies as well as both national and local mail senders.

“Zumbox has truly created a new communications medium, one that’s certain to be as valuable as it is disruptive,” said Rick Braddock, Chairman and CEO of Fresh Direct. “By combining the unique address system of the USPS with the power of Web 2.0, the company is revolutionizing how content of all types can be distributed, accessed and consumed.”

In a request filed with the Postal Regulatory Commission, Gamefly, a company that rents game DVDs via the mail, seeks to compel the US Postal Service to provide information the USPS says is off-limits.

In its motion, Gamefly says:

In its objections, the Postal Service seeks to place three kinds of information offlimits to discovery: (1) information about any aspect of preferential treatment received by Netflix other than the degree of manual processing of return DVD mailers; (2) information about the treatment received by DVD rental companies—other than GameFly—that have smaller mail volume than Netflix and Blockbuster; and (3) certain information about the Netflix-only drop slots at local post offices. These restrictions are unfounded.

Gamefly points out that the USPS has already admitted that Netflix receives special treatment:

The first issue has been resolved by the Postal Service’s own statements in this case. The Postal Service initially asserted that it had abandoned its practice of giving manual culling and manual processing to “the largest movie DVD providers” in the wake of the November 2007 report of the Office of Inspector General, and specifically “denie[d] that any ‘large percentage’ of inbound movie DVDs are processed manually.” Since GameFly began discovery, however, the Postal Service has admitted that the preferential treatment given to Netflix has continued or even increased since the OIG report. The Postal Service’s August 14 response to GFL/USPS-18, for example, admits that “the amount of manual processing of Netflix mail is likely at least as large as was set forth in the [Office of Inspector General Audit] Report, though no specific percentages are available.”

The Gamefly motion concludes:

A variety of information indicates that the Postal Service’s preferential treatment of Netflix is driven primarily by a desire to cater to a large customer, and that the operational needs that supposedly justify this discrimination are pretexts.

(1) Perhaps the most telling sign is the inability of the Postal Service to keep its story straight about whether it is discriminating at all. As noted above, at the outset of this case the Postal Service represented to the Commission that the practice of giving manual culling and manual processing to “the largest movie DVD providers” had been abandoned in the wake of the November 2007 report of the Office of Inspector General.
Since then, however, the Postal Service has admitted that Netflix DVD return mailers get at least as much manual processing as in late 2007.

(2) In response to GFL/USPS-28, the Postal Service asserts that dedicated mail slots for Netflix DVD mailers in “lobby drops available for the public to deposit mail” are “against current Headquarters policy, as detailed in the attached Retail Digest.” USPS response to GFL/USPS-28 (filed August 14, 2009). The attached headquarters directive states that: In an effort to accommodate Netflix mail, some offices have created special mail drops and signage for Netflix returns. This is not an
authorized use of mail drop slots and it has legal ramification [sic] for the Postal Service.

The headquarters directive is an admission that this form of preferential treatment for Netflix has no operational justification; and the “legal ramification” alluded to is presumably liability for discrimination under 39 U.S.C. § 403(c).

The USPS sent the following notification to the APWU Western Regional Coordinator outling possible consolidations of Computerized Forwarding System units in the Western Area:

August 4, 2009

Omar M. Gonzalez
Western Region Coordinator
American Postal Workers Union, AFL-CIO
500 Airport Blvd. Suite 450
Burlingame, CA 94010-1940

Dear Mr. Gonzalez:

Please be advised that we are considering consolidating Central Forwarding System (CFS) offices within the Western Area as follows:

• Spokane to Seattle
• Portland to Seattle
• Fargo to Minneapolis
• Sioux Falls to Minneapolis
• Billings to Denver
• Wichita to Kansas City
• Des Moines to Omaha
• Boise to Salt Lake City
• Las Vegas to Salt Lake City and Phoenix

This will impact the employees in the losing CFS units. Reassignments will be made pursuant to the provisions of Article 12 by each affected district office. We will provide you updates as information becomes available.

Sincerely,

Chris A Jordan
Manager Labor Relations
Western Area

More Western Region Impact Statements are located here. Statements for the rest of the country can be found at the APWU Regional Coordinator’s pages at APWU.org.

Reports filed with the Postal regulatory Commission show that as of July 17, the US Postal Service has reduced its field staff by 5.7%, or 37,454 employees from the same period last year. (All numbers cited refer to actual employees on the rolls, not authorized positions).

The largest reductions among bargaining unit employees, as in the past, have come in the clerk craft, which lost 16,023 employees, or 8.1%. City carriers were down by 5.2%, or 11,135 employees. The smaller mail handler craft lost 2,829, or 5% of its members. Career rural carriers, who are compensated on an evaluation basis, and generally earn significantly less than their city counterparts, lost just 974 employees, or 1.4%.

Supervisors, managers and administrative staffing in the field was reduced by 3,468 employees, or 8.4%. Headquarters lost 88 staff, or 3.1%.

The bad news for the USPS is that the complement reductions so far have not translated to any significant cost reductions. Thanks to salary and benefit increases, the USPS has paid out almost exactly the same amount in base salaries and benefits this year as it did in 2008. The $1 billion the agency has managed to save in compensation costs this year has come entirely from reductions in overtime. Sustaining that level of savings solely from overtime in the future will be difficult if not impossible.

The Direct Marketing Association (DMA) today applauds the initiative and creativity of the United States Postal Service (USPS) and commends the diligent and expeditious endorsement of the USPS Summer Sale by the Postal Regulatory Commission (PRC).

“The Summer Sale provides an opportunity for marketers and the USPS to create an independent and much needed stimulus to their businesses and the nation’s economy,” said John Greco, DMA President and CEO.

The potential benefits from the program will accrue to the entire supply chain from creative entities to paper suppliers, printers and private sector common carriers.

The Postal Service estimates that they will realize between $38 million and $95 million in additional net revenue from the expected increase in mail volume.

Direct mail and catalog remain significant contributors to the US economy, accounting for over $56 billion of advertising spending last year and sales of more than $702 billion – including nearly $155 billion in catalog sales. The Summer Sale program will buttress this important segment of the economy.

By endorsing the Summer Sale, the PRC is allowing the USPS to take advantage of the pricing flexibility that DMA worked so hard for in the passage of the Postal Accountability and Enhancement Act. DMA has long advocated seasonal pricing. At the Postal Regulatory Commission/Postal Service Summit in 2007, then DMA Chairman Markus Wilhelm urged the Postal Service to offer seasonal rates and even daily rates to grow mail volume during slower times. DMA endorsed cooperation between the USPS and mailers then, and will continue to do so in the future.

The basic outline of the sale is that any mailer with over 1 million pieces of annual volume is entitled to a 30 percent rebate on the incremental increase in volume mailed between July 1 and September 30, 2009, over previous years. These numbers are subject to a series of calculations that adjust for current mailing trends and any shift in October 2009 volume. You can learn more about the details of the sale here http://www.the-dma.org/postal/.

To inquire about your company’s eligibility email summersale@usps.gov. Please click here to view the PRC Summer Sale approval.

DMA looks forward to a successful execution of this initiative and encourages the USPS to continue the use of flex pricing in 2010 with the ability of a broader base of mailers to qualify.

Postmaster General Briefing
July 14, 2009
USPS Headquarters

On Tuesday, July 14, 2009, Louis Atkins, NAPS Executive Vice President, represented NAPS at a briefing with Postmaster General Jack Potter. Also in attendance were the leaders of all of the craft unions and the other two management associations.

Postmaster General Potter briefed the attendees on the current situation facing the Postal Service:

Continued losses in volume are crippling the finances of the Postal Service. Between 2008 through 2010, the Postal Service expects that it could lose as much as 25 – 30 billion pieces of mail volume. Every time the Postal Service loses a billion pieces of mail, the Postal Service looses $ 360 million dollars in revenue at current rates.

Employees need to know that the Postal Service has already taken steps to bring our Health Benefits in line with the rest of the federal government by the agreements that were reached with the unions and management association in the last round of pay agreements by increasing the employee contribution by 1% each year.

There are no plans to have any new equipment deployments in the near future. Right now the Postal Service has enough equipment power to process all of the world’s originating mail in just six hours time.

The “Summer Sale” was explained to the attendees. Mailers who use this opportunity will be required to maintain their expected volume of mailings through October, 2009 to earn a rebate on summer mailings. Customers who simply advance their mailing cycle will not get the discount rebate.

PMG Potter then provided information on the Postal Service’s strategies for FY 2010 and beyond:

• The Postal Service needs to continue to cut costs

• Grow the Business

• Protect Liquidity

Key Strategies are expected to include:

• Continued freeze on hiring

• Additional Tour compressions

• Restructuring Delivery Routes

• Continued integration of Network Distribution Centers

• Flat Sequencing

• Station and Branch consolidations

• Further reductions in administrative positions

The Postal Service continues to stress that relief from the passage of HR 22 alone will not bring the Postal Service the financial relief that it needs and the implementation of five-day delivery is vital to the future solvency of the Postal Service.

Although there has been much discussion of the change to five day delivery, and that the change must have congressional approval and a change to the current law, it now appears that Saturday would be the day that delivery would be eliminated. In a five-day proposal, retail units would remain open on Saturday to provide service to customers.

Post Office boxes and Caller Service would also be maintained under the Postal Service’s plan. Remittance mailers could use Post Office boxes and/or Caller Service to maintain their cash flow.

Under the Postal Service’s proposal, there would be no delivery or collection of mail for city routes, rural routes or contract routes. Express Mail would continue to be delivered as it is currently.

• Mail processing would process originating mail Monday – Friday.

• Mail processing for destinating street addresses processed Monday – Friday.

• Mail processing for destinating PO Boxes and Callers Monday – Saturday.

• Mail processing for destinating remittance mail Monday – Sunday

The Postal Service is also considering options to increase the sale of non-postal items in retail units. As these plans are finalized there will be information provided to employees and the public.

PMG Potter stated that the new Priority Mail initiative with flat rate boxes is performing well and helping us improve our revenue. Employees should tell everyone they know about the benefits of the flat rate boxes.