Postal Service Profits, Volume Continue to Drop

Here we go again: The U.S. Postal Service lost $1.9 billion in the six months that ended March 31st [USPS Press Release]. Mail volume also dropped 6.3 percent vs. the same period in 2009.

Not even a one-time boost of $180 million in first-class mail from the U.S. Census Bureau helped stopped the declines, as revenue dropped 1.4 percent compared with the previous year, officials said.

Operating losses totaled $1.8 billion in 2010, compared with $2.3 billion the year before. Work hours for the first half of fiscal 2010 were 49 million hours below 2009. The Postal Service now employs about 594,000 career workers, down 47,000 positions from 2009. Still, the mail agency is the nation's second-largest employer, behind Wal-Mart.

Congress is considering Postmaster General John E. Potter's proposals to cut Saturday mail delivery, close post offices and raise postage rates beyond the rate of inflation, but it remains unclear how lawmakers plan to proceed. Potter also wants Congress to change a 2006 law that requires the Postal Service to pre-fund its retiree health benefits, a unique expense that costs about $5 billion annually. Source: Washington Post

FSS Machines Shuffled Again -- But Do They Work?

The U.S. Postal Service announced they are putting Flats Sequencing System (FSS) into five new locations but has still not revealed whether the machines work as intended.

Eight months ago, USPS's Office of Inspector General said that "deploying FSS machines to additional sites is premature" until the system "demonstrates operational stability and achieves the minimum performance requirements under field test conditions". But postal officials decided that the results were good enough and providing enough cost savings to press on with more installations.

A third round of acceptance testing was scheduled for last fall, but USPS has not revealed the results. Various sources, however, report that the machines have still not met the standards specified in the contract with the manufacturer, Northrop Grumman.

Additional information can be found in The Unofficial Guide to Flats Sequencing. The guide was originally published in January 2009 but has been significantly updated since then. Source: Dead Tree Edition

Expect Exigency Case in July

During the “open to the public” portion of its monthly meeting, the Postal Regulatory Commission (PRC) announced that it had hired a CPA firm to independently assess the USPS Inspector General’s assertion that the Postal Service has been overcharged to the tune of some $75 billion by the Office of Personnel Management for the funding of its employee retirement fund.

The question of retiree fund overpayment is of critical importance in Congress’ considerations as to whether the Postal Service should be given relief from its current financial woes.

On another matter of concern to the business mailing community, PRC Chairman Ruth Goldway mentioned that she expected a “major case” to be filed by the Postal Service in late July. The Direct Marketing Association (DMA) believes that she was referring to an “exigency case” proposing rate increases that exceed the CPI cap regime set in the 2006 reform act. A July filing could result in rate increases effective in January of 2011. Source: DMA

Social Media Important, Most Not Profiting

Many marketing professionals and company decision makers view social media as essential to their business. But according to a recent survey by R2integrated, an Internet marketing and technology company, the new technology hasn’t been worth the investment for all businesses.

The survey reported that 54 percent of marketers thought social media is “innovative and invaluable to their business,” but 65 percent said their companies haven’t profited from the popular technology. Sources: R2integrated & USPS News Link