New Service Standards for San Diego went into Effect July 1!

Went to the local PCC Meeting yesterday, to listen to Larry Belair, Senior Plant Manager describe the transition and implementation of the First Phase of the "New Service Standards" for the USPS.  One of the first questions he asked the group was "Have you noticed any change in the in our Delivery Service"? There was none, and this is good news.  They did a stellar job in moving the volume of Small bundles from the Midway processing facility to Margaret Sellars while tearing down and relocating the giant APPS machine and reassembling it at Margaret Sellars.  They did this by installing a temporary SPBS (Small Parcel Buncle Sorter) machine prior to this implementation to help with the load.  (The APPS is a machine larger than a football field that sorts bundles of flats)

So what does Phase 1 consist of?  Its a combination of facility consolidation and a reduction in service standards.  Locally this is the elimination of the Midway processing facility.  Currently the home for entry discounts for Flats and also where they process all the Express Mail.  Currently mailers have to drop the flats at Midway and their letter mail at Margaret Sellars in order to achieve Entry discounts for both.  Important to note that Midway will continue to be a BMEU (Bulk Mail Entry Unit).  August 15 is the start date for Entry Discounts for Flats to move, but you can continue to receive entry discounts at Midway until the cutoff on October 28.

The change in service standards for Overnight delivery was described like this.  80% of what was being delivered overnight will continue to be delivered overnight as part of Phase 1.  So FCM mail originating within SD County and being Delivered within SD County will continue to receive overnight service.  FCM that used to be delivered overnight from LA, Santa Ana will now be a two day service.

Some interesting facts, In 2005, the USPS had 673 Processing Facilities, by 2012 that has already shrank to 461 and the goal is to get to 321 by 2014 and 232 by 2015.  The reduction in service standards makes this possible.  Again you are wondering Why?  Here's the reason, under the old service standard (Overnight) the equipment and facilities were poorly utilized, most of the sorting equipment was not in use during the majority of the day, then the night shift kicks in and runs the mail in 6 hours or so, not quite a full day's work but they get paid a full day anyway.  With the delay in delivering, they can use less machines, less facilities and process throughout the day.

They are already getting over 1 Billion dollars in annual savings with this partial implementation, by the time they get to Phase 3 it will exceed 3 Billion dollars annually.

I believe that by the time full implementation comes, the Post Office will have in place a "Critical Mail" category.  It will be available to everyone and will include Delivery Confirmation and overnight local area service for a reasonable price to fill the void.  It just makes good business sense to do this.

There is a lot going on right now in the mailing world:  a lame duck congress unable to move any important  legislation, including the needed relief to the pre-funding requirements for Healthcare or to address the over payments into the Retirement accounts, the change / reduction in service standards as discussed above, the proposal to eliminate Saturday Delivery and the abundance of negative publicity that the public is being bombarded with everyday.

Mail is not going away.  The Post Office is adapting and doing so smartly with a minimum of disruption.  They are adjusting their footprint and head count to today's new reality.  Mail maters.  Mail works.  Now if we can only get our politicians to do the right thing.

Postal Service Statement on Retiree Health Benefits Payment

Per MSMA Announcement this morning

As everyone may have heard by now, the United States Postal Service has defaulted on its payments to the US Treasury for the mandated prefunding of the Retiree Health Benefits. These prefunding requirements enacted under the PAEA 2006 legislation accounts for the majority of the Postal Service’s fiscal deficit. 

In their PRESS RELEASE below the Postal Service states that this will not impact Postal Operations and they fully intend to continue to deliver the mail and meet their other financial obligations.

We will continue to provide you with updates and additional information concerning this matter as it becomes available in the future. Additionally many questions regarding this issue as well as the Network Optimization Plan implementation & impact and other issues concerning the United States Postal Service will be discussed and covered at MAILCOM in Las Vegas. 

I hope to see you there.

Barbara Fahy, MDC

MSMA National President

July 30, 2012 Press Release

The U.S. Postal Service will not make mandated prefunding retiree health benefit payments to the Treasury of $5.5 billion due Aug. 1, 2012 or the $5.6 billion payment due Sept. 30, absent legislation enacted by Congress. This action will have no material effect on the operations of the Postal Service. We will fully fund our operations, including our obligation to provide universal postal services to the American people. We will continue to deliver the mail, pay our employees and suppliers and meet our other financial obligations. Postal Service retirees and employees will also continue to receive their health benefits. Our customers can be confident in the continued regular operations of the Postal Service.

The Postal Service continues to implement its strategic plan. However, comprehensive postal legislation is needed to return the Postal Service to long-term financial stability. We remain hopeful that such legislation can be enacted during the current Congress.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

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A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation — 151 million residences, businesses and Post Office™ Boxes. The Postal Service™ receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com®, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, Oxford Strategic Consulting ranked the U.S. Postal Service number one in overall service performance of the posts in the top 20 wealthiest nations in the world. Black Enterprise andHispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute.