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Did You Hear That the U.S. Postal Service is Going Out of Business? No One Told Their Senior Management.

Posted by Mark Fallon on Jan 19, 2016 5:30:00 AM

mail_box-1.jpgThe U.S. Postal Service (USPS) recently released their latest financial results. As if on cue, we heard the usual outcry from the usual suspects that no one mails letters anymore, the government can’t be trusted to run anything and that privatization is the cure to the problem. Of course, the majority of businesses still use mail to communicate with their customers, the USPS is the most trusted government organization, and the largest competitive delivery companies rely on the USPS to complete many home deliveries.

But facts in the face of biased opinions aren’t the primary drivers for this blog post.

Last week, I attended the Mailers’ Technical Advisory Committee (MTAC) open session in Washington DC. MTAC is comprised of representatives from professional associations that rely on the USPS and its services. The USPS shares technical and service information at MTAC meetings, responding to feedback and suggested changes. It’s also an opportunity for the senior leadership of the USPS to brief some of their largest users – and most vocal critics – on the state of the USPS.

Postmaster General (PMG) Megan Brennan set the tone for the briefings from the start. For the first time in a long while, mailers heard from a leader with a positive message. PMG Brennan doesn’t hide from the problems facing the USPS, but she also doesn’t see them as irresolvable challenges either. Only one member of the Board of Governors? They’ll still move forward. Rollback of the exigent rate increase? They’ll work to keep cutting costs. An unhelpful and recalcitrant Congress? There may even be hope there.

PMG Brennan had the members of her executive leadership team address the attendees and take questions. Deputy PMG Ron Stroman laid out the reasons to be somewhat hopeful about the chances to pass legislative reform. Working with stakeholders – including the postal unions and major mailers – they’ve been able to align interests in key areas. Most importantly, is a realistic plan to address the financial albatross of prefunding future retiree health benefits. There are no guarantees in politics, but the prospect is real.

Chief Marketing Officer Jim Cochrane and Vice President of Sales Cliff Rucker discussed opportunities with small businesses and the upcoming elections. In multi-communication channel marketing campaigns, mail plays an integral role in driving business to the Internet. Experts predict that candidates, political parties and PACs will spend $12 billion on the 2016 elections. The USPS has a task force to help direct $1 billion of that spend towards direct mail.

The person sharing the most good news, and not good news, was the Chief Operating Officer, David Williams. The USPS set several records during the 2015 peak holiday season, handling over 18% more volume than 2014. However, on-time delivery of flats and periodicals remain below the standard. Mr. Williams didn’t shy away from these statistics, but discussed his plans to improve service.

Speaking of statistics, mailers heard refreshing honesty from acting Chief Information Officer Randy Miskanic. The USPS reported a 99% up time for the PostalOne! Interface for finance and payments. But Mr. Miskanic admitted that this included off-hours when most mailers weren’t online, and that the amount of downtime was unacceptable. He’s engaged a team from Carnegie Mellon University to review and recommend immediate and long-term changes to the system.

Chief Financial Officer Joseph Corbett announced that preliminary reports for the first quarter indicates that considering controllable expenses (i.e., excluding the congressionally mandated prepayment), the USPS showed an operating profit. Most mainstream media outlets seem to misreport these results.

In some ways, there was no real “new news” being shared. People who follow the USPS closely were already aware of the issues and plans that the leaders discussed. We’ve heard promises of change before. But the tone last week was noticeably different. These people were confident about the proposed changes and the direction of the organization. Instead of listening to canned and forced presentations, the audience heard earnest ideas about improving the USPS.

There’s an old saying that “perception is reality”. PMG Brennan and her team have established the perception that they have what it takes to ensure that the USPS will remain an important and economically viable institution. Now, they have to deliver on that promise.

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