It’s been a busy month in the postal world as the USPS works to address a variety of unique challenges. With so much going on, we decided to break our recap into two parts, so make sure to look for Part 2 tomorrow morning. Here are just some of the issues we are tracking:
Continuing Postal Service Losses Stress Need for Legislative Reform
The Postal Service ended the first half of its fiscal year (Oct. – Mar.) with a net loss of $6.5 billion. Although most of this amount, $6.1 billion, was driven by accruals for scheduled prepayments into its Retiree Health Benefit Fund, declining mail volumes for both First-Class and Standard Mail were also factors in the loss. The Postal Service continues to pursue the comprehensive business plan proposed earlier this year, but many of the changes needed to bring cost and revenue into alignment require legislative changes from Congress. The Senate recently passed its version of reform, while the House is considering whether to take up the Senate bill or pursue a separate measure proposed by Reps. Darrell Issa (R-CA) and Dennis Ross (R-FL).
While both the House and Senate bills would provide the Postal Service with short-term relief, neither provides for long-term financial viability. We urge Congress to act swiftly to provide the Postal Service with the flexibility to adapt to the changing realities of its marketplace.
Network Changes Become Clearer
The Postal Service has said it will publish the final rules defining new service standards by the end of May, with the changes taking effect in early July. Specific facility changes will be announced, and implementation will begin at the same time. The Postal Service says no widespread facility closures are planned for 2012. But facility changes likely to be accomplished in 2012 include operational adjustments and centralization within existing facilities to reflect new service standards. The bulk of these changes will occur during July and August. No network rationalization changes will be made from September through December to minimize disruption during the “fall mailing season” and around the election.
We are hearing that the Postal Service will announce more details on these changes later this week. We will post an update once that announcement is made.
That’s all for today, so make sure to stop by tomorrow and read the rest of our postal update. We’ll cover the latest rule change surrounding automation discounts and the requirement of Intelligent Mail barcodes (IMb). We’ll also preview potential industry promotions being considered for 2013.
Marketing Services Manager