In Part 1 of this week’s Postal Update we mentioned it was anticipated the Postal Service would announce more details this week on the planned changes to its network. Thursday morning the Postal Service held a briefing to bring more clarity to the issue. As promised, here is an update.
Postal Service Begins Network Rationalization Process
The Postal Service has announced the first phase of its modified network consolidation plan, which will result in up to 140 consolidations through February 2013. If the Postal Service’s financial circumstances do not change in the interim, a second phase could result in the consolidation of an additional 89 plants by February 2014. Postmaster General Patrick Donahoe said the modified plan will provide a longer planning schedule for customers, employees and other stakeholders.
The Postal Service will begin consolidating operations this summer, which will mostly involve transferring mail processing operations from smaller to larger facilities. Megan Brennan, USPS Chief Operating Officer, said that consolidation activities would be conducted in only 48 locations this summer, which will mean nearly all consolidation activities for 2012 will occur in August. Due to the volume of high-priority mailings during the election and holiday mailing seasons, no consolidation activities will be conducted from September through December.
Donahoe noted, “We simply do not have the mail volumes to justify the size and capacity of our current mail processing network. To return to profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload.”
IWCO Direct applauds the Postal Service for having the courage to take this necessary measure to rightsize its processing network and better align its costs and revenue.
Postal Service Creates Digital Solutions Group, Announces Executive Changes
The Postal Service is creating a new Digital Solutions group to create a range of digital products and services. The new unit will be led by Paul Vogel as . Vogel had previously served as Chief Marketing and Sales Officer.
Postmaster General Patrick Donahoe promised a broad mandate for the new unit to extend the current USPS platform into the digital arena. “We are convinced there is growth potential in this dynamic digital environment,” said Donahoe. “Our growth in this area is potentially quite large, both as a way to develop new revenue streams and to enhance existing products, services and customer experiences.”
In addition, Nagisa Manabe will join the Postal Service replacing Vogel as Chief Marketing and Sales Officer. She will be responsible for all domestic and international product marketing, development and management, as well as the Sales organization. Manabe comes to the Postal Service from the Coca Cola Company, where she served as Vice President of New Growth Platforms.
Both Vogel and Manabe will be members of the USPS Executive Leadership Team.
Of course, the network rationalization process could change when the House acts on postal reform. As always, we’ll do our very best to keep you current on this evolving issue and what it means to the direct marketing industry.