Industry hails US postal reform



The OP industry is celebrating a landmark postal reform bill which was approved by lawmakers in Congress last month marking the first important piece of legislation significantly to reform the rules governing the US postal service in more than 30 years.
Big-volume mailers said the successful passage of the Postal Accountability and Enhancement Act was the first significant overhaul of the US Postal Service’s business practices since 1970.
The legislation, which is expected to receive the presidential rubber stamp, will bring order to the rate-hike process and help the postal service to survive burgeoning competition from such technological advances as email, faxes and electronic bill-paying.
For more than a decade, lawmakers have laboured over the details of the legislation to bring the postal service up-to-date. A lot of interests have engaged in the process, including unions, catalogue companies, magazine publishers, newspapers as well as alternate-mail companies such as Federal Express and United Parcel Service (UPS).
Among other issues, FedEx and UPS were concerned that they were competing against a government monopoly and they didn’t want to see reforms that would unfairly disadvantage them.
But with the news of the radical shake-up, experts believe the Postal Service will now work better, more efficiently and responsively than before. "The legislation will go a long way toward making sure the postal service has the flexibility it needs to compete in the new economy," said one Washington lawmaker.
"With more than nine million jobs and $90 billion in commerce dependent on a viable postal service, this bill is a win for consumers, business, nonprofits and the economy alike," commented John Greco, president and CEO of the Direct Marketing Association.
Among other features, the legislation would empower the postal service to throw out what’s described as a cumbersome, drawn-out rate-making process in favour of setting its own rates to meet costs and allow for a quicker reaction to shifting market developments.
To keep rates stable, the legislation would dictate that price increases be held below an inflation-based ceiling.
The legislation also would repeal a law that requires the Postal Service to deposit excess pension money into an escrow account. According to analysts, that provision will free up tens of billions of dollars for debt payment and reduce the need for rate increases. The agency also would be freed from the obligation of using its money to pay military pension benefits for employees, with the liability being returned to the US Treasury.
Research has shown that first-class mailings across the US have steadily decreased, even as one million new addresses were added to delivery routes each year. That means delivery costs have increased at the same time that revenues have been threatened, which translates to an 18 percent increase in mailing costs – from 33 cents to 39 cents for a single first-class stamp – over the last six years.
"We are delighted that our efforts over many years, in cooperation with many of our leading customers and others, contributed to the passage of this legislation that is so vital to the continuing growth of the mailing industry," said RR Donnelley CEO Mark Angelson. "This is a great step forward for the USPS and for the mailing industry that supports it."
"RR Donnelley’s unmatched logistics capabilities create opportunities for our customers to minimise their postal costs, as we efficiently deliver mail deep into the postal stream," continued Angelson. "In concert with this model public- and private-sector cooperation, successful Postal Reform positions print to continue its growth as the leading medium for publishers, cataloguers as well as direct response mailers."
But it wasn’t all good news for the US delivery sector last month. Just days after the new law was announced, UPS for the second time in six months announced a substantial number of redundancies in its Supply Chain Services business.
In a brief statement released last month, the company stated that it had created a "special voluntary separation opportunity to approximately 650 employees as part of the organisation’s ongoing effort to eliminate redundant positions".
This is apparently aimed at workers over 50 with longer work records at the company. These redundancies are in addition to the 1,200 job losses announced at SCS in October."
The US Postal Service has been in existence since 1775 and currently visits more than 144 million homes and businesses every day. The federal agency delivers more than 46 percent of the world’s mail volume – some 212 billion letters, advertisements, periodicals and packages a year – and serves seven million customers each day at its 37,000 retail locations nationwide.