I Get a Kick Out of You

Old Blue Eyes will be commemorated on a postage stamp next spring, the Postal Service says in conjunction with its announcement heralding the lineup of its 2008 stamps.

Will USPS schedule the stamp's release event to coincide with the calendar of Rep. Jose Serrano (D-NY), of the south Bronx, Sinatra's most ardent fan in Congress?

As the New York Times once noted, "Anyone who knows Jose E. Serrano even slightly knows he is an ardent fan of Frank Sinatra. In fact, Mr. Serrano learned English from the Sinatra 78's his father brought home when he was growing up in Puerto Rico in the late 1940's, and he entertained childhood dreams of being a nightclub singer. "

Serrano also has something to do with stamps: he chairs the House appropriations subcommittee that oversees the budget of the Postal Service: the House Appropriations Subcommittee on Financial Services and General Government.

In fact, as reported here, Serrano used his power to plug a provision in the omnibus appropriations bill for FY08 that blocks the Postal Service from moving forward on its plan in his district to consolidate the Bronx Postal distribution center operations into the Manhattan-based Morgan Postal Distribution Facility until Congress and the Government Accountability Office are satisfied that the consolidation is merited.

Serrano didn't quietly carry out the AMP blockade; he belted it out like a Sinatra standard in a press release his office released even before the ink on the omnibus funding bill was dry.

“I felt strongly that the consolidation and shuttering of the Bronx postal distribution facilities was the wrong idea,” Serrano said. “From my post on the Appropriations subcommittee that oversees the Postal Service’s budget, I was able to block the Postal Service from moving forward on this misguided plan. I felt that the plan’s savings were minimal and the cost to postal workers in my district was too high. I feel strongly that we should put people ahead of profits.”

FedEx to Its Drivers: Stop by the IRS on Your Way Home

According to news reports, FedEx Corp. has disclosed that it has received an IRS challenge to its business model for contracting with independent drivers for the company's FedEx Ground division.

FedEx said in a Securities and Exchange Commission filing that the IRS "has tentatively concluded" through a 2002 audit that contract drivers with FedEx Ground should have been classified as company employees.

The IRS decision is the latest in a series of attacks on FedEx Ground's system for contracting with independent pickup and delivery drivers who own and maintain their own trucks while lacking access to work benefits provided for company employees.

Roadmap to the Future

The Postal Service’s self-described “roadmap to the future” is spelled out in its update to its Strategic Transformation Plan (2006-2010), which the USPS has just released.

The sixty-two page document reaffirms many of the same goals that were embraced in the original Transformation Plan published by the Postal Service five years ago.

While the fundamental goal of universal service has remained, some of the major routes the Postal Service will use to get to that goal have changed. Here's a run-down of the major themes of the updated Transformation Plan:

Pricing and Product Flexibility. Under the new law, the Postal Service will be able to generate a profit and plow those earnings back into the business. To generate sufficient revenue, the Service also will have greater flexibility to create new products and more easily set prices. This will demand a whole new understanding of mail and shipping market segments and their costs and profitability. The dynamics and adaptability of pricing will require creative thinking and agility in ways to which the Postal Service has not entirely been accustomed in the past.

Intelligent Mail. The introduction of intelligent mail barcodes for mailpieces and containers will take the Postal Service into a new era. “Total Mail Visibility” is the USPS vision for the IM-based world. The new IM barcode contains triple the information of previous barcodes, permitting tracking of individual mailpieces at all steps in the process, from creation by the mailer, to its deposit with the Postal Service, through transportation and processing, right up to delivery. This provides tremendous value to USPS and its customers.

Service Standards and Measurement. As required by the PAEA, the Postal Service has embarked on a path to measure service performance for all classes of mail according to defined standards. The journey began last year with USPS revisions to standards for all mailing service, and its pending proposal to the PRC to create a new, hybrid measurement system, expanding EXFC to all 3-digit areas and blending EXFC data and Product Tracking System data with IM-based data.

Cost Containment through Process and Network Improvements. The USPS anticipates that two-thirds of the $1 billion in savings it seeks in 2008 will come from process improvements, especially through the new Flats Sequencing System. Additional savings will be captured through other initiatives, including changes to the postal network and more effective use of part-time and temporary employees, supported by the new labor contracts. Noticeably, the Transformation Plan does not refer to the contracting-out of delivery routes, but this remains a potential route that USPS officials believe will drive down labor costs.

Enhanced Sustainability. Aiming to create a “conservation culture”, the Postal Service – as well as its high-volume customers – are increasingly recognizing that enhancement of the value of mail means include greater attention to recycling, reducing waste and trimming energy use. “Going green” means integrating conservation into every phase of day-to-day operations and engaging all employees to take ownership and responsibility.

Congress to USPS: OK, We'll Pay Up (Again)

Congress this week provided $29 million in funding to the Treasury Department to satisfy the annual revenue forgone payment to the Postal Service. The funding is contained in the $555 billion omnibus government funding measure and referenced in the Congressional joint explanatory statement on the measure. Were Congress to step away from continuing to provide these funds, it would pose substantial budget implications for the Postal Service.

The Revenue Forgone Reform Act of 1993 provides for a $29 million annual payment over 42 years to the Postal Service to pay off a $1.2 billion debt Congress created by mandating preferred postage rates to nonprofits and others in the early 1990s.

Postal employee groups urged Congress to make the annual revenue forgone payment, especially after the House earlier this year had refrained from including payment funding in its original appropriation measure.

Congress Blocks Seven AMP Consolidations

In one of its final acts before adjourning for the year, Congress directed a halt to Area Mail Processing consolidations in seven locations and criticized the Postal Service for its handling of its network realignment effort.

The setback to the USPS infrastructure initiative is included in the FY 2008 omnibus government funding legislation, adopted by the House and Senate. The funding measure is expected to be signed by the President.

The roadblock to AMP consolidation effort is contained in the joint explanatory statement of the omnibus funding measure. Congress questioned the wisdom of further AMP consolidations, basing its judgment on Government Accountability Office testimony to Congress delivered in July, faulting AMP consolidations as based on inadequate criteria, inconsistent data and insufficient stakeholder input.

The Postal Service already has canceled scores of AMP study efforts in locations around the country over the past year.

Congress this week directed the Postal Service to suspend consolidation efforts in the following locations: Sioux City, Iowa; Aberdeen, South Dakota, Bronx, New York; Pasadena, California, Canton, Ohio; Detroit/Flint, Michigan; and Alexandria, Louisiana.

Sen. Tom Harkin (D-IA) took credit for blocking the Sioux City AMP and Rep. Jose Serrano (D-NY) for stalling the Bronx consolidation.

Congress instructed USPS to hold up efforts in the seven areas until the Government Accountability Office completed in evaluations in 2008 on USPS guidance on communications with the public on AMP consolidation (due to be issued by USPS in March), and the USPS Facilities Plan, detailing overall network realignment strategy (due to be issued by USPS in June).

Congress also called upon USPS to devote greater resources to facilities improvements in Puerto Rico, as well as in Indio, California, and noted continued concerns over mail service delays in Chicago. It directed USPS to work with Chicago officials and implement management reforms to improve service and delivery.

Just Like Old Times

"Break out the holly, as well as the last-minute holiday cards," the Washington Post tartly observes.

Due to the prodigious attention to constituent service by District of Columbia Del. Eleanor Holmes Norton, the nation's capital has received an early Christmas present: the restoration of the Washington, D.C., postmark.

It means that WASHINGTON, DC will replace the SUBURBAN MD and SOUTHERN MD postmarks for at least 90 percent of the stamped mail originating in the District.

USPS Governors Approve Bank of America NSA, Based on Advances to Intelligent Mail Barcode

The USPS Board of Governors on December 17 issued its decision approving a controversial Negotiated Service Agreement with Bank of America Corporation. The NSA will provide discounts to BAC on First-Class Mail and Standard Mail letters, in return for BAC’s expanded use of Intelligent Mail Barcode technology.

The Postal Regulatory Commission, in its decision reviewing the proposed BAC Negotiated Service Agreement, recommended adoption of the NSA by a 4-1 vote, despite noting that the Postal Service could lose as much as $45 million under the proposed agreement.

The Board of Governors, in its decision to move ahead with the NSA, criticized the PRC’s estimation of reduced revenues, and emphasized the importance of broadened use of the Intelligent Mail Barcode. The Governors noted: “BAC’s adoption of the IMB will not only create momentum for the use of this technology among other members of the mailing industry, but given BAC’s substantial size, its use by BAC will create incentives for the suppliers of the mailing industry to make adjustments to their products to support the new technology. Thus, we believe BAC’s early adoption of this groundbreaking technology will enable the Postal Service to meet its objectives of widespread use of the IMB technology rapidly and consistently with recent pronouncements to achieve implementation by 2009.”

Opting Out of Catalogs

Since the launch of Catalogchoice.org in October, the website claims to have signed up nearly a quarter-million consumers who have declined to receive about 2.6 million catalogs.

Catalog Choice is a sponsored project of the Ecology Center, a Berkley, California-based nonprofit.

According to the Kansas City Star, "Analysts say that many merchants are monitoring the web site, weighing whether it might benefit them. Fifty already have opened accounts in active support of the movement, including catalog giants L.L. Bean, Lands' End, Brookstone and Tiffany & Co.

Al Bessin, a consulting partner with Lenser, which advises the catalog industry, said that higher paper and postal costs — and a drop in response rates — make the old approach of mailing thousands of phone-book thick catalogs to everyone a waste of time and money.

The question now for catalog companies, Bessin said, is how to "put your best foot forward" and reach consumers whose behavior will be triggered to go online or to the mall to buy an item they see in a catalog."

Mail Moves America Launches Website

Mail Moves America, the coalition of postal and printing industry organizations fighting efforts to establish Do Not Mail registries, has created a new website. It’s got lots of good information on the Do Not Mail issue. Check it out here.

The Postal Minimum Wage and the German Monkey Wrench

How do you outsmart the competition in a privatized postal world?

Hijack your competitors' labor costs.

German Chancellor Angela Merkel's Christian Democrats and their Social Democrat coalition partners threw a monkey wrench into the free market of Germany's increasingly-privatized postal landscape when they recently steered a bill through the lower house of the German parliament that mandate minimum wages for all 200,000 postal workers of between 8 euros ($11.75) and 9.80 euros an hour, effective Jan. 1.

The government bill has been criticized by opposition lawmakers and mail carriers as a measure to protect Deutsche Post AG once it loses its exclusive license to deliver mail on Jan. 1. Deutsche Post has said it expects the loss of its letter-carrying monopoly to trim earnings at its mail division by as much as 20 percent by 2009. The government owns more than 30 percent of Deutsche Post through its KfW banking group.

The legislation is based on a contract brokered earlier this year by some mail carrier groups. Minimum wages currently only apply in Germany to the building industry and to some cleaners.

``You aren't protecting employees with this bill, you're protecting the monopoly of Deutsche Post,'' Free Democrat leader Guido Westerwelle said in a speech to the Bundestag. A sum of 9.80 euros would be ``the highest minimum wage in the world,'' he said.

According to Bloomberg.com, mail-service companies that say they'll need to fire staff if the measure becomes law. Berlin-based Axel Springer AG, Europe's biggest newspaper publisher, says it will stop funding its Pin Group mail services unit because the minimum wage makes it no longer viable. TNT NV, Europe's second-biggest express-delivery company, says it may leave Germany if the rules come into place that hurt competition, particularly over minimum wages and tax exemptions.

The decision by the Bundestag, Germany's lower house of parliament in Berlin, still has to be approved by the veto- wielding upper house to become law. The upper chamber, or Bundesrat, comprising lawmakers from Germany's 16 states, is scheduled to vote on the matter on Dec. 20.