House to consider the ending of Door to Door Delivery - "It's a Cluster ___"

7/25/2013

Yesterday it was announced that the House of Representatives panel working on Postal reform passed a proposal to eliminate curbside delivery by 2022. This includes deliveries to mailboxes at the end of driveways, and cluster box delivery would replace letter carriers slipping mail into front-door boxes. Estimated savings from this is 4.5 Billion annually.   This panel is headed by Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee and the measure is now heading for a full vote on House floor.

While giving the Post latitude to make more independent business decisions would be welcome, a new mandate to upset the public from Congress is not what is needed.  Its incredible that Congressman Issa continues to dodge the major challenges facing the USPS, created by Congress, that is making them leak red ink.  It is very confusing but like most government conspiracies it is important to follow the money. 

In 2002, the USPS Inspector General found that the Post had overpaid 80 Billion to the US Treasury for federal government  pensions.  A lot of former military found second careers at the USPS, these prior years of service count toward their federal pension and the Post was shouldering 100% of those costs. 

No one argues that the Post over paid, but Congress did not want to take an 80 Billion dollar budget deficit hit for making it right so they made a deal as part of the Postal Accountability and Enhancement Act (PAEA) of 2006.  The Post would be relieved from making future pension payments for the credits earned while in the Military and to make up for the cash shortfall they would be required to prefund 75 years’ worth of future health care costs in just 10 years of payments. No other agency or company in the world has such a mandated burden.

Before the economic downturn in late 2007, the Post was doing well and in exchange for some new autonomy for their completive product line (Shipping Services), a streamlined method to adjust rates for their Market Dominant products (Mailing Services) and future pension relief they reluctantly agreed.   Many industry veterans believed the bill that Congress jammed down their throats was short sighted and unfair to the Post and recognized that this was a disguised tax on the American public!

Any wonder why we don’t trust politicians?  They created this problem and they have the obligation to fix it fairly without any more accounting tricks and hidden taxes.  The Post has been backed into a corner, and I for one applaud them in their successful efforts.  They have dramatically reduced their workforce thru automation and logistical efficiency gains while their on-time delivery performance improves every quarter. 

Why does Congress and the press continually dump on the Post? If they were a private company, they would rank among the 50 largest in the world.  They are the largest deliverer of mail and parcels in the world, with more retail locations than Starbucks, McDonalds and Walmart combined.  The Post is one of the world’s most environmentally conscious entities, they are the #1 “most trusted Government agency” and the #3 “most trusted American organization”.  It is estimated that the overall Industry that supports them employs well over 6 Million people. 

The good news is that the Parcel delivery side of their business is thriving and driving records profits. With 151 million daily deliveries, they handle 40% of the world’s volume at the lowest per unit cost and deliver to the largest geographical area than any other Post.  So they are incredibly efficient, trusted, environmentally conscious and secure. Why do they continually get stymied by our Government and trashed by the major news media?

They got the public to overwhelmingly approve their plan to eliminate Saturday delivery for Letter mail, you would think Congress would stay out of their way, but no, they put an end to that 2 billion annual savings plan.  It boggles my mind.

So what does Issa want to do now to fix the post, force cluster boxes?  I wonder who else is going to profit from this?  Get real ISSA and make meaningful Postal Reform a reality.

Gordon S. Glazer, CMDSM, CMDSS, MDP, MDC

Gordon is the President of Mail Consulting Services for Shipware, LLC. He specializes in reducing shipping and mailing costs through modal optimization and other strategies. He welcomes your comments and can be reached at Gordon@shipware.com or 858.879.2020 x 108

Free Parcel Insurance for Priority Mail

$50 of Free Insurance for Commercial Base and $100 of Free insurance for Commercial Plus was announced a couple weeks ago by Parcel Magazine's Webinar: "How to Take Advantage of Major New USPS Infrastructure Improvements" Effective date is July 28, 2013

Ina Steiner in her blog recently posted some clarifications to questions about the program:

USPS Clears up Questions about Priority Mail Insurance

Online merchants who rely on Priority Mail to send packages got some good news - beginning July 28th, domestic Priority Mail will include, without additional charge, either $50 or $100 insurance for loss, damage, and missing merchandise.

But shippers had trouble determining under which situation they would receive $50 in free insurance, and in which situation they would receive $100 in free insurance. Spokesperson Darleen Reid-DeMeo addressed the question for EcommerceBytes on Monday.

"Customers walking into a PO (Retail) or using USPS.com to ship generally will get $50 Priority Mail Insurance included with their purchase. Commercial customers who ship large volumes in most instances will receive $100 Priority Mail Insurance included on each package. These customers are volume driven and provide electronic manifests."

But, as many merchants know, there are two commercial rates - Commercial Base (small and medium sized sellers generally get this rate when using online postage services), and Commercial Plus, for high-volume shippers.

According to Eric Nash of Stamps.com, the $100 Priority Mail insurance is only for Commercial Plus customers. "Overall, Stamps.com prints Commercial Base pricing for all packages and the USPS will be offering $50 of free coverage in Priority Mail for customers." Those customers who have been approved for Commercial Plus pricing from the USPS will automatically receive $100 of coverage for all of their Priority Mail packages when they print their shipping labels using Stamps.com.

"It's important to note that this free insurance coverage is being added from the USPS for shipping labels that include the Intelligent Mail package barcode," Nash said, and since the insurance is provided from the USPS, all claims would need to be processed with the USPS at usps.com/domestic-claims.

Endicia Product Marketing Manager Jessica Foth said Endicia would also support the new free USPS insurance coverage for all of its customers automatically, both for Commercial Base and Commercial Plus shippers.

Another question raised by a merchant was whether they'd be able to purchase additional insurance coverage beyond what the USPS was providing with Priority Mail shipments. Reid-DeMeo said additional insurance coverage may be available for an additional fee.

The new, free insurance for Priority Mail comes as the USPS rebrands its Express Mail product under the Priority Mail umbrella - as of July 28th, it will be called Priority Mail Express. As part of the changes, all Priority Mail packages will have an estimated service of 1 day, 2 days, or 3 days that will be displayed on the payment receipt, online shipping label and in the USPS Tracking information.

Reid-DeMeo said nothing has changed with regard to insurance for Priority Mail Express shipments - up to $100 of insurance is still included at no extra charge with Domestic Priority Mail Express shipments, and for international shipments, document reconstruction insurance up to $100 and merchandise insurance up to $200 is included, at no extra charge, against loss, damage, or missing contents, she said.

Current prices for Priority Mail will remain in place. See more information in Five Things to Know about USPS Changes to Priority Mail