We are disappointed to learn that the Postal Regulatory Commission (PRC) has denied our price filing. But we are encouraged by their acknowledgment and understanding of the larger financial risk we face through the mandated prefunding of Retiree Health Benefits.
Clearly, the Postal Service is a viable business. Maintaining that status requires elimination of several legislatively-imposed constraints that hamper our ability to operate efficiently and profitably.
Specifically: 1) enable us to alter frequency of delivery consistent with use of the mail; 2) allow us to close unprofitable post offices; 3) restructure our obligation under a 2006 law to prefund retiree health benefits, an obligation not applicable to any other private or government entity; 4) permit us to create and offer products and services beyond mail; 5) assure that arbitrators consider the financial health of the Postal Service when agreement cannot be reached with our labor unions; and 6) resolve overfunding of our pension systems. Legislation has been introduced in Congress to address these issues.
We will need to take a much closer look at the ruling from the PRC in order to make an informed decision about what options we have and what may be the best course of action for our customers, our employees, our stakeholders and the American public.
The Postal Service ends the current fiscal year with approximately $2 billion cash and available credit, meeting all our end-of-year financial obligations, including a $5.5 billion payment to the Retiree Health Benefit Fund as required by law.
As we have stated repeatedly throughout the year, the Postal Service sought a deferral of this $5.5 billion payment to minimize the risk of defaulting on our financial obligations in Fiscal Year 2011. Unfortunately, no legislative action has been taken at this time.
The financial risk remains. We will carefully manage every dollar we spend in the upcoming fiscal year. Our current forecast shows that we will not have sufficient cash to make the $5.5 billion payment due on Sept. 30, 2011, and any major disruption, whether in volume loss or unforeseen circumstances, could cause us to default on financial obligations earlier in FY11.
In the midst of financial and regulatory challenges, the Postal Service achieved record productivity gains in 2010 and a reduction of over 100,000 career employees and cost savings of over $10 billion during the last three years.
As always, service to our customers remains our number one priority. No financial challenge or uncertainty will change that. We will continue to work with Congress and our stakeholders to implement necessary changes to ensure a viable Postal Service for decades to come.
John E. Potter
Postmaster General of the United States
CEO of the U.S. Postal Service
Thursday, September 30, 2010
PRG Denies Postal Service Exigent Rate Request
Washington, DC - The Postal Regulatory Commission today issued Order No. 547 in Docket
R2010-4 denying a Postal Service request for an average 5.6 percent rate increase. The Commission found that the Postal Service failed to justiff rate increases in excess of its statutory CPI price cap.
"The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantifo the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mailvolume; therefore, we unanimously deny its exigent rate request," said Chairman Ruth Y. Goldway.
The law requires the Postal Service to demonstrate that any exigent rate adjustments are due to the identified exceptional circumstances. This prevents a bona fide extraordinary or exceptional circumstance from being used as a general rate increase mechanism that would circumvent the price cap system.
The Postal Service's recent volume losses and multi-billion dollar shortfalls are recognized. However, Commission analysis confirms that the Postal Service's cash flow problem is not a result of the recession and would have occurred whether or not the recession took place. lt is the result of other,unrelated structural problems and the proposed exigent rate adjustments would neither solve nor delay those problems.
The Postal Service may be unable to continue to meet a statutory 1O-year payment schedule -
averaging roughly $5.5 billion per year - to create a fund to pay future retiree health benefit premiums. lt has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15 billion borrowing authority. Even with therequested increase, the Postal Service would be unable to meet this annual obligation either in 2011,or in succeeding years.
The Postal Service achieved over $6 billion in cost reductions in 2009. While volume declinesoutstripped cost reductions during the actual recession, Postal Service cost containment programsare producing results and work hours have declined faster than volumes in 2010.
The Postal Regulatory Comm¡ssion is an independent federal agency that provides regulatory oversight over the U.S. Postal Servtbe to ensure the transparcncy and accountability of the Postal Sevice and foster a vital and efficient universal mail system. The Commission is comprised of five Presidentially-appointed and Senate-confrrmed Commissioners, each serving terms of six years. The Chairman is designated by the Prcsident. ln addition to Chairman Goldway, the other Commissioners are Vice Chairman Tony Hammond, Dan Blair, Nanci Langley, and Maù Acton
R2010-4 denying a Postal Service request for an average 5.6 percent rate increase. The Commission found that the Postal Service failed to justiff rate increases in excess of its statutory CPI price cap.
"The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantifo the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mailvolume; therefore, we unanimously deny its exigent rate request," said Chairman Ruth Y. Goldway.
The law requires the Postal Service to demonstrate that any exigent rate adjustments are due to the identified exceptional circumstances. This prevents a bona fide extraordinary or exceptional circumstance from being used as a general rate increase mechanism that would circumvent the price cap system.
The Postal Service's recent volume losses and multi-billion dollar shortfalls are recognized. However, Commission analysis confirms that the Postal Service's cash flow problem is not a result of the recession and would have occurred whether or not the recession took place. lt is the result of other,unrelated structural problems and the proposed exigent rate adjustments would neither solve nor delay those problems.
The Postal Service may be unable to continue to meet a statutory 1O-year payment schedule -
averaging roughly $5.5 billion per year - to create a fund to pay future retiree health benefit premiums. lt has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15 billion borrowing authority. Even with therequested increase, the Postal Service would be unable to meet this annual obligation either in 2011,or in succeeding years.
The Postal Service achieved over $6 billion in cost reductions in 2009. While volume declinesoutstripped cost reductions during the actual recession, Postal Service cost containment programsare producing results and work hours have declined faster than volumes in 2010.
The Postal Regulatory Comm¡ssion is an independent federal agency that provides regulatory oversight over the U.S. Postal Servtbe to ensure the transparcncy and accountability of the Postal Sevice and foster a vital and efficient universal mail system. The Commission is comprised of five Presidentially-appointed and Senate-confrrmed Commissioners, each serving terms of six years. The Chairman is designated by the Prcsident. ln addition to Chairman Goldway, the other Commissioners are Vice Chairman Tony Hammond, Dan Blair, Nanci Langley, and Maù Acton
Wednesday, September 15, 2010
Mailpiece Design Consultant (MDC) Certification Oct. 8th
San Diego Postal & Shipping Equipment to host a
Mail Systems Management Association - San Diego Chapter Event
Gordon Glazer, CMDSM, CMDSS, MDC will be leading a one day MDC Certification Training workshop on behalf of Mail Systems Management Association.
Every company and mailer should employ an expert to make sure that mailpieces qualify for Automation and Workshare discounts. Learn the information you need to pass the MDC test and become certified.
Who Should Attend:
Mail Industry front-line to mid-level Managers
Designers
Mailers
Marketing Professionals
Printers
Suppliers to the mailing industry
Learn how to:
Avoid the costs of bad address quality.
Comply with USPS regulations to minimize postage costs.
Identify mailpiece design problems and save money.
The MDC exam consists of 100 multiple choice questions and requires a passing grade of 90%.
Pass the exam and receive your certification immediately! Proudly proclaim your achievement by adding your MDC certification to your title.
If you require a retest, you may take the exam one additional time at no extra charge. (at the end of the exam, you will be notified of the questions you missed, along with the actual response you gave).
Friday, October 8, 2010
9:00 am to 2:00pm
at San Diego Postal & Shipping Equipment classroom
12255 Crosthwaite Circle
Poway CA 92064
$65 for MSMA members
$75 for non-members
- Includes Registration, Course Study Program, Lunch and meeting refreshments
- Study only (Actual Test will not be taken onsite).
- Limited to 40 maximum participants
Make sure you're included. REGISTER TODAY
Mail Systems Management Association - San Diego Chapter Event
Gordon Glazer, CMDSM, CMDSS, MDC will be leading a one day MDC Certification Training workshop on behalf of Mail Systems Management Association.
Every company and mailer should employ an expert to make sure that mailpieces qualify for Automation and Workshare discounts. Learn the information you need to pass the MDC test and become certified.
Who Should Attend:
Mail Industry front-line to mid-level Managers
Designers
Mailers
Marketing Professionals
Printers
Suppliers to the mailing industry
Learn how to:
Avoid the costs of bad address quality.
Comply with USPS regulations to minimize postage costs.
Identify mailpiece design problems and save money.
The MDC exam consists of 100 multiple choice questions and requires a passing grade of 90%.
Pass the exam and receive your certification immediately! Proudly proclaim your achievement by adding your MDC certification to your title.
If you require a retest, you may take the exam one additional time at no extra charge. (at the end of the exam, you will be notified of the questions you missed, along with the actual response you gave).
Friday, October 8, 2010
9:00 am to 2:00pm
at San Diego Postal & Shipping Equipment classroom
12255 Crosthwaite Circle
Poway CA 92064
$65 for MSMA members
$75 for non-members
- Includes Registration, Course Study Program, Lunch and meeting refreshments
- Study only (Actual Test will not be taken onsite).
- Limited to 40 maximum participants
Make sure you're included. REGISTER TODAY
Subscribe to:
Posts (Atom)