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The Berkshire Company Blog

7 Simple Truths About the U.S. Postal Service Finances

Posted by Mark Fallon on Nov 19, 2017 3:26:09 PM

Last week, the U.S. Postal Service (USPS) released their financial results for FY2017. Revenues and expenses both declined, and their reported losses were $2.7 billion. On cue – critics of the USPS, along with reporters who didn’t read beyond the first paragraph of the financial report, declared that the USPS is on an inevitable path to bankruptcy and irrelevance.

Here’s what they missed: + Read More

United States Postal Service

2017 Presidential Nominees to the USPS Board of Governors: Progress or Politics?

Posted by Mark Fallon on Oct 30, 2017 8:51:01 AM

Last week, President Trump nominated 3 people for the 9 open seats on the United States Postal Service (USPS) Board of Governors (Board). Because the Senate hasn’t confirmed any nominees since 2009, there are no presidentially-appointed members of the Board. The terms were designed to be staggered,  so there are several open seats with terms expiring in the near future.

The new nominees represent a mix of political and management qualifications. 

+ Read More

United States Postal Service / USPS

2018 Postage Rate Increase: The 50-Cent Stamp is Here!

Posted by Mark Fallon on Oct 8, 2017 1:39:13 PM

On Friday, October 6, 2017, the U.S. Postal Service (USPS) filed the rate case for Market Dominant products with the Postal Regulatory Commission (PRC). Set to go into effect on January 21, 2018, the new rates represent about a 1.9% increase over the current prices for mailing, or “Market Dominant” products and 3.9% increases for shipping, or “competitive” products.

Interestingly, this price increase comes in the absence of both a Board of Governors (Board) and the anticipated PRC review of the ratemaking process.

+ Read More

United States Postal Service / Operations Management / USPS

Support Your Local Postal Customer Council 2017

Posted by Mark Fallon on Sep 12, 2017 5:00:00 AM

For mailers across the United States, the next best educational opportunity is National Postal Customer Council (“PCC”) Week, which takes place September 25 – 29, 2017 at multiple locations throughout the country.

PCCs have a variety of events scheduled – from luncheons, to half-day seminars to full-day conferences. At almost every event, a senior representative from the United States Postal Service (“USPS”) will be present to discuss upcoming postal initiatives and field questions from the audience. Their presentation will be supplemented with training on subjects like networking, quality control and professional management.

+ Read More

United States Postal Service / Postal Customer Council

Postage Budgets Await No Agency

Posted by Mark Fallon on Aug 22, 2017 4:36:00 AM

Sometime in the next month, the Postal Regulatory Commission (PRC) will complete their review of how the United States Postal Service (USPS) sets postage rates. There have been strong protests from several mailer associations against allowing the USPS to increase rates for Market Dominant products beyond the rate of inflation. On the other hand, the USPS has argued that the existing rules prevent them from establishing the rates necessary to cover their expenses.

As the prospects for legislative postal reform remain dim, the USPS needs more flexibility in setting rates. The CPI is a poor standard to use for postage rates, as most of the USPS expenses are for transportation and personnel. The price index for gas has consistently risen higher than CPI, as have health insurance rates. Ending the CPI cap will put the USPS on a stronger financial footing.

The PRC hasn’t indicated what their decision might be. They could leave the cap in place, they could modify the cap, or they could remove the cap altogether. Whatever they do, the USPS will then develop the proposed rates for 2018, probably releasing the pricing in October.

For most companies, October is too late in the planning cycle. Many of our clients are already submitting their preliminary 2018 budgets. For the past decade, managers could look up the CPI, add a few points as a buffer, and calculate their future postage costs. With no PRC decision, there are no guideposts to follow.

Predicting the future is a fool’s errand. Especially when it comes to political bodies like the PRC. However, not planning for the future is the hallmark of a fool. What’s a manager to do?

It’s probable that the PRC will lift the price cap on Market Dominant prices, with some type of controls. Postmaster General Brennan has repeatedly stated that the USPS want to grow the business of mail. A drastic rate increase won’t help them reach that goal.

A reasonable rate increase would be 5%. This would bring rates close to where they would be if the Exigent Rate Increase wasn’t rolled back in 2016. Also, it’s consistent with the annual rate increases of both FedEx and UPS – not including the holiday surcharge both companies recently announced.

Most managers are asked to reduce spending, and a significant rate increase will be unwelcome news. Savvy leaders will need to look for other methods of limiting the impact. That starts with taking advantage of the heavier weights allowed for machinable letter mail. Mailings should be combined and householded to a single envelope. Wherever possible, flats that weigh less than 3.5 ounces should be redesigned for 6 x 9 letter envelopes.

Mailers need to take a second look at the Promotions & Incentive Programs for First-Class & USPS Marketing Mail. Savings that seemed small before will be key to offset additional expenses. Mail service providers can add value to relationships by finding ways to easily enroll customers in these programs.

While no one knows the amount, postage rates will increase in 2018. Managers should budget and plan accordingly.

+ Read More

United States Postal Service / Operations Management

USPS Financial Woes Won’t Deliver Postal Reform

Posted by Mark Fallon on Aug 15, 2017 5:00:00 AM

The United States Postal Service (USPS) released their 3rd Quarter 2017 Financials last week, and as expected, the news wasn’t good. While the USPS continues to reduce expenses – down 2.4% – they weren’t able to generate enough income due to slumping mail volumes, resulting in a “controllable loss” of $587 million.

+ Read More

United States Postal Service

US Postal Service to Increase Costs of Non-Compliance

Posted by Mark Fallon on Jul 18, 2017 5:01:00 AM

While many people were celebrating Independence Day with an extra-long weekend, the U.S. Postal Service (USPS) filed a price adjustment request with the Postal Regulatory Commission (PRC) on July 3, 2017. Under Docket No. R2017-7, the USPS seeks approval for changing how it verifies compliance with Move Update and to increase the assessment charges for pieces that don’t meet the standard.

Move Update, the process for updating names and addresses, is required by USPS if mailers want to receive discounted postage rates. Mailers who use the exceptional address format (e.g., Jane Doe or Current Resident) do not have to meet this requirement.

The Postal Service offers mailers four approved and two alternative Move Update methods:

+ Read More

United States Postal Service / Operations Management

USPS and Big Data: Are You Informed?

Posted by Mark Fallon on Jun 6, 2017 12:58:42 PM

Since the arrival of the ZIP Code in 1963, mailers have worked hard to meet the addressing and sorting requirements established by the U.S. Postal Service (USPS). Then came the ZIP+4, the Postnet Barcode, the Delivery Point Barcode and the Intelligent Mail Barcode (IMb). Each upgrade promised streamlined processing, consistent delivery and low postage rates. For most mailers, the USPS delivered on those promises.

Many mailers have held out on moving from the Basic IMb to the Full Service IMb, with accompanying mail.dat file and eDocs. Tracking MIDs, CRIDS and mail piece IDs often require a significant investment in software, databases and customer buy-in. For smaller mailers and mail service providers, the extra work required wasn’t worth the $0.003 per piece discount.

That’s about to change. For 2 reasons – Informed Delivery and Informed Visibility.

+ Read More

United States Postal Service

Meeting Minimum US Postal Service Requirements Isn’t Enough

Posted by Mark Fallon on May 2, 2017 6:09:00 AM


One of my favorite television personalities is Mike Holmes. A contractor from Canada, Mike has been the star of several renovation series, including Holmes on Holmes, Holmes Inspections and Holmes Makes It Right. He’s most famous for uncovering shoddy work by other contractors, tearing it out, and then completing the construction correctly.

For Mike, the building code is the bare minimum standard for contractors. And the bare minimum isn’t the right way to build. “Even if they are minimum standards, codes matter,” Holmes said. “I’ve said before that I’m not a fan of people who build to code because the building codes are minimum standards. I want to see people build past minimum standards, so that every homeowner has the safest possible living environment.”

I feel the same way about most US Postal Service (USPS) regulations – they’re the minimum standards for mailers to meet. If you want to have your mail accepted by the USPS, then you must follow the regulations. But to be successful, you need to do more than just meet the standard. This is especially true when it comes to addresses.

+ Read More

United States Postal Service / Operations Management

Time to End the CPI Cap for Postage Rate Increases

Posted by Mark Fallon on Mar 28, 2017 5:00:00 AM

Under the requirements of the Postage Accountability and Enhancement Act (PAEA) of 2006, the Postal Regulatory Commission (PRC) is reviewing the way the United States Postal Service (USPS) sets postage rates. Under the PAEA, the USPS can’t raise postage rates for market dominant products above the rate of inflation as determined by the Consumer Price Index (CPI). The price cap was a bad idea in 2006, remains a bad idea in 2017, and should be ended by the PRC.

+ Read More

United States Postal Service

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