Associated Mail & Parcel Centers Blog

The Senate Bill

The likelihood that the Congress will address the financial difficulties facing the U.S. Postal Service increased significantly as four key Senators who are leaders on postal issues joined behind a single piece of legislation. And, this group includes both Democrats (Lieberman and Carper) and Republicans (Collins and Brown).

Titled “The 21st Century Postal Service Act,”  it would provide substantial financial relief by rebating  more than $6 BILLION in pension over-payments – part of which is to be used as incentive money to cut the workforce by 100,000. Even better, it would restructure the statutory retiree health insurance pre-funding schedule saving the Postal Service almost $5 BILLION annually, authorize it to leave the Federal Employee Health program and negotiate its own health insurance program.  The Postmaster General believes this would lead to substantial savings. Finally, the bill would reform the Federal workers’ compensation program which experts also say would reduce USPS costs.

The bill also would prevent the Postal Service from eliminating Saturday delivery for at least two years, after which a Postal Regulatory Committee review would assess whether enough efficiency improvements have been made to justify the further need to cut costs by moving to five day per week delivery.

It includes language to encourage contract rates (NSAs), and would encourage the Postal Service to phase out door delivery in favor of centralized delivery (cluster boxes).

The bill includes a number of measures related to the USPS effort to reduce the size of its infrastructure through plant and post office closures and consolidations, but the red tape it appears to apply in the manner of required studies, hearings, and appeals could actually slow the ongoing network optimization effort.

Key Provisions for Mail & Parcel Centers

Limitations on Five-Day Delivery

The bill would prohibit the Postal Service from implementing its plan to eliminate Saturday delivery for at least two years. The implementation could only move forward if the following conditions are met: 1) the Postal Service identifies customers who may be affected disproportionately by five-day delivery and develops remedies; 2) the Postal Service makes full use of its authorities under current law and the new authorities and mandates included in this bill to increase revenue and reduce costs; and 3) after implementing all other savings options, the Postal Service determines that a five-day schedule is still necessary to achieve sustainability. Once that decision is made, and demonstrated through careful financial analysis, the Government Accountability Office (GAO) would review the Postal Service’s financial situation, projections, and the adequacy of the savings initiatives already implemented in order to determine whether the implementation of five-day delivery is financially necessary. The Postal Service would not be able to implement a five-day schedule unless the Postal Regulatory Commission (PRC) has found that the Comptroller General has made a determination that doing so is financially necessary.

Streamlining Delivery

Under current practices, postal customers who don’t rent post office boxes receive delivery in a number of ways: some receive mail at their door while others receive it in mail boxes at their curb or at centrally-located stations at the end of their block or in a residential building. The bill would authorize the Postal Service, where feasible, to deliver to curbside, sidewalk, or centralized mailboxes rather than to door delivery points no later than 2015. This change could save the Postal Service billions every year.

Retail service standards

The bill would require the Postal Service to develop service standards to guarantee customers a certain level of access to retail services, whether at a post office or an alternative to a post office. The Postal Service must develop the standard, in consultation with the PRC, based on factors such as geography, population, and the availability of transportation. Communities concerned that a proposed closure violates a standard could challenge the proposal before the PRC.

The State of Play

Congress is moving toward dealing with the postal situation. This bipartisan Senate bill, coupled with the Issa/Ross bill (H.R. 2309) which was recently approved by a House Committee, mean all of the key postal legislators have now weighed in and are pushing for action. But, there is a long way to go, and the leading House and Senate bills differ in significant and politically important ways. The Postal Service issued a release thanking the Senators for their work, and many in the mailing industry have applauded this latest action.

The Postal Service will stay solvent and in business, although the road will be a bit rocky for a while.

Associated Mail & Parcel Centers (AMPC) members pay dues to support the organization’s efforts to support their businesses. The money pays for a staff to develop benefits, programs, discounts, research, education, and advocacy for the members. Joining AMPC is easy. To help us support your industry and business, go to www.ampc.org and sign up.

For a two-page chart showing the holiday schedules and guaranteed delivery policies of the carriers, click on the image below:

Who is EquaShip?

EquaShip is a new shipping company that is offering Mail & Parcel Centers an alternative hybrid shipping system that combines the software of EquaShip, the logistics of Blue Package Delivery with the last mile delivery to every address in the US by the United State Postal Service.

The advantage to Mail & Parcel Centers is a lower domestic ground shipping rate alternative that is trackable and insurable.  Using EquaShip will lower your domestic ground shipping costs and make it easy to delight customers who are looking to reduce their shipping costs.

Some  Advantages:

No pickup fees
No residential surcharges
No fuel surcharges
No extended area surcharges
No delivery intercept charges
No return package shipping charges
No tiers
No EquaShip carrier stores
The public is not invited to ship with EquaShip
Rates from 25% to 50% lower than other carrier published rates

EquaShip calls itself “The Fourth Carrier,” a game-changing alternative to UPS, FedEx and the US Postal Service.  The three giants are certainly among America’s strongest brands, collectively hauling some three billion parcels a year, and doing a great job of it.  Those parcels represent 10% of the GDP – and growing – given the ever-increasing popularity of internet shopping.

EquaShip is building a national delivery network by linking together Blue Package Delivery and the USPS.  Targeting the smaller shipper, EquaShip requires no contracts or volume minimums.

Blue Package is a large package consolidator that serves Amazon merchants.  Blue Package enters over one million packages a day into the Postal Service.  They need additional drop point across the country for the merchants to drop their packages for Blue Package pickup.  EquaShip wants to ship its packages through those drop points.

Here’s how it works:

You must first sign up as a drop point for Blue Package Delivery.  If Blue Package qualifies your store as a needed drop point, you will be sent an application to ship through EquaShip.

How do I Sign Up?

To learn more and apply for an account go  here

The EquaShip program for retail shipping is being offered exclusively through Associated Mail & Parcel Centers (AMPC), a trade organization that has been helping stores succeed for 30 years.  Stores do not have to be members of AMPC to participate in the program.  For more information on how AMPC supports the industry by meeting with USPS officials, carriers and vendors to put profitable programs together for its members see www.ampc.org.

Tucked away in the President’s jobs message is the Administration’s plan to address the financial situation of Postal Service. In the following detailed talking points:

Provide Postal Service financial relief and undertake reform.

The Administration recognizes the enormous value of the Postal Service (USPS) to the Nation’s commerce and communications, as well as the urgent need for reform to ensure its future viability. USPS faces a long-term, structural operating deficit that has been exacerbated by the precipitous drop in mail volume in the last few years due to the economic crisis and the continuing shift toward electronic communication.

Absent legislative intervention, USPS will be insolvent by the end of September 2011. Bold action is needed to ensure that USPS can continue to operate in the shorterm and achieve viability in the long-run.

To that end, the President is proposing a comprehensive reform package that would:

• Restructure Retiree Health Benefit pre-funding in order to reduce near-year Postal payments;
• Provide USPS with a two-year Federal Employees Retirement System employer contribution holiday to take into consideration the current $6.9 billion surplus in Postal contributions;
• Reduce USPS operating costs by giving USPS authority to reduce mail delivery from six days to five days;
• Allow USPS to offer non-postal products and increase collaboration with state and local governments; and
• Give USPS the ability to better align the costs of postage with the costs of mail delivery.

These reforms would provide USPS with over $20 billion in cash relief over the next several years and in total would reduce the federal deficit by more than $10 billion.

Absent from the reform package was the USPS proposal to reduce labor costs.

The Postal Service says the next price adjustment for all products will be January 22, 2012.

Although the infamous “exigency case” is still pending at the PRC after being returned by a Federal court for more consideration, the word from the Postal Service is that no matter how the PRC decides it, we understand the January 2012 price increase for market dominant products will be a normal “price cap” adjustment . The new prices for market dominant products will be announced around October 22 with an average increase in the 2.1-2.3 percent range (the expected change in the CPI).

Competitive product (Shipping Services) prices should be announced November 22. Remember, the Postal Service will introduce a new Shipping Service product, Commercial First-Class™ Package Service, that will replace the current First-Class Mail® commercial base and commercial plus parcel offerings in January. Except for Parcel Select Lightweight/Standard Mail Parcels, we expect price increases for Shipping Services products, including Parcel Select, to increase in the mid-single-digits (4-6 percent range) on average.

The Postal Service went public yesterday with more detail on its plans to close and consolidate plants and streamline its transportation network (Network Optimization). The proposal is intended to reduce network costs by as much as $3 billion annually. The proposal would affect First-Class Mail and Periodical service standards, eliminating overnight service standards and establishing more two-day service standards for these products.

The primary new information released yesterday is a list of nearly 250 plants that are under consideration for closing. This is early in a process that will extend at least through next March.

The recent press attention to the USPS financial situation and a more active push for solutions by the Postal Service, has spurred more interest both on Capitol Hill and within the Obama Administration which says it is working on a proposal to deal with the problems facing the Postal Service. At a recent Senate hearing, Postmaster General Donahoe described the financial situation and explained how he hoped to deal with it and put the Postal Service back in the black. He asked Congress to address the following core issues this year:

• Resolve the pre-funding of Retiree Health Benefits (RHB)

• Return the $6.9 billion overfunding of the USPS FERS pension obligation

• Grant the Postal Service the authority to determine delivery frequency (5-Day)

• Allow the Postal Service the flexibility to restructure its healthcare and pension systems

• Permit the streamlining of pricing and product development.

Without these requested changes the Postal Service projects that it will lose $16 billion in 2015. With the changes, the Postal Service says it would be able to reduce costs by $20 billion, allowing it to earn a profit in 2015. Any profit would be used to pay down debt and make necessary investments like new delivery vehicles.

Here’s a breakdown of the hoped for savings that would result from the changes:

• Sortation and Transportation – $3 billion

• Retail – $1.5 billion

• Delivery – $2 billion

• RHB Resolved – $5.5 billion

• Five-Day Delivery – $3 billion

• Benefits and Wages – $5 billion

These savings assume Congressional action, Network Optimization, and a huge reduction in head count.

There is a possibility that the House postal subcommittee could begin considering postal legislation next week, and the House and Senate leaders of the relevant postal committees are expected to meet next week to discuss possibilities. But, actual action on legislation is far from imminent.

Meanwhile, the House Oversight and Government Reform Committee has set up a postal reform section, replete with a countdown clock until default at the end of the month, on its website.

Now is the time to act to protect your business and create awareness of the industry’s abilities to partner with the USPS.

The Postal Regulatory Commission (PRC) has issued its non-binding advisory opinion, the Government Accounting Office (GAO) has issued its cost reduction estimate and now it goes to Congress to decide whether Saturday delivery of the mail is good for America and the USPS. AMPC has given its opinion in a number of venues, including a testimony before the PRC, letters to Congressional leaders and to the Postmaster General. We have presented our position to the USPS Leadership Team.  Click here to listen to Postmaster Patrick Donahoe’s response to AMPC’s presentation.

Our opinion is that five-day delivery can be a great opportunity for the mail and parcel industry – if it is done right. Our solution for the USPS is to partner with USPS Approved Shippers to allow for restricted delivery on Saturday to CMRA’s and PO Boxes.

The key here is that we cannot allow the Post Office to deliver to PO Boxes and not to Private Mail Boxes (PMBs). It is our position that that would constitute unfair competition.

Now is the time to address the issue, protect our industry and explain how we can help the USPS survive. We do this by writing to the House and Senate Sub-Committees that will be making the decision on five-day delivery. As an industry we need take the following steps to let them know we are out here:

• Edit the Form Letter as you see fit and add it to your letterhead. If you don’t have a letterhead, create one. It makes a significant difference.

• At the minimum write letters to the Chairman of each committee. The Ranking Minority Leaders and Susan Collins are important, as well. Write other committee members if they represent your district or state. Five Day Campaign Contact Information Page.
• Use the proper form of address as presented on the Five Day Campaign Contact InformationPage.

• Emails are easy, but they do not create the impact of a tall pile of letters on a Congressman’s desk.

• Fax or use the USPS to mail your letters.  (Local addresses have been added due to the delay in mail to Congress.)

• Send the same letter to your local Representatives and Senators

The vast majority of letters to Congress from businesses over this issue will be to state arguments against the idea of eliminating Saturday. From what the PRC has told us, the vast majority of letters to Congress from private citizens will be to support eliminating Saturday delivery. Ours will be the only letters that offer a solution to the dilemma. Your letters are important and they will be noticed. Now is the time to act as an industry.

Associated Mail & Parcel Centers (AMPC) members pay dues to support the organization’s efforts to support their businesses. The money pays for a staff to develop benefits, programs, discounts, research, education, and advocacy for the members. Joining AMPC is easy. To help us support your industry and business, go to www.ampc.org and sign up.

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At the National Postal Forum, AMPC made a short presentation to the USPS Executive Leadership Team (Postmaster General, Deputy Postmaster General and the six Executive VPs) stating that we support five-day delivery and we believe the USPS will need this and other cost savings to survive, but the Commercial Mail Receiving Agents (CMRA) will have to get their mail on Saturday just like Post Office Boxes. Mail delivered to PO Boxes only will not be acceptable.

Associated Mail & Parcel Centers (AMPC) members pay dues to support the organization’s efforts to support their businesses. The money pays for a staff to develop benefits, programs, discounts, research, education, and advocacy for the members. Joining AMPC is easy. To help us support your industry and business, go to www.ampc.org and sign up.

The Postmaster General told us that he agrees that delivery to CMRAs on Saturday makes sense.  What he wants in return, of course, is more mail from the Approved Shippers.  In another meeting he told me that he has no intention in giving up the fight to be more flexible on the number of delivery days per week.

The wording in the law has to do with the appropriation bills that get passed every year.  The statement in these bills require Postal delivery, six days a week.  The goal of the USPS is to get this paragraph deleted, giving them the flexibility to make changes based upon mail volume.

Patrick Donahoe appears to be a man of his word. In his short time as PMG he has earned the respect of many large mailers.  But just in case, I have about 1500 witnesses to his approval of Saturday mail delivery to CMRAs and the session will be available on DVD soon.

Fighting the five-day option is self-defeating in that Congress will eventually realize that the demand curve for mail is not going to bend up any time soon.  Without changes, including reducing the delivery days, the USPS will not be able to meet its Constitutional mandate.  And we have an opportunity here – to increase our mailbox business.

If we are successful, the PO and the CMRAs will be the only available options to get mail on Saturday.   Should this all come about, mail box rentals will increase significantly.

Entering into this process to guide it in our direction will be much more effective that letting it happen and then protesting the outcome.  The PMG told me that by providing delivery points and sales outlet at almost no cost to them, the Approved Shipper Program is very important to the future the USPS.

Our letter writing campaign is almost ready to go to the two Congressional Committees that will make the decision regarding five-day delivery.  I have asked for some guidance on how to approach Congress with these letters, and when I get that, the campaign will be launched.   The letters will be editable.

Please be prepared to help.

You have spent the money to attend the AMPC 2011 Convention – Expo and you’re here.  The sessions are much more than you expected.   The amount of useful information is overwhelming.  You are quickly absorbing information that will make your business prosper.  You have an open mind about the new ideas being presented.  You are attentive and taking notes, listening to the veterans, talking to vendors, getting their brochures.

You can turn this experience into greater profits and you know it will work.  You can’t wait to get back home and start making more money by implementing these ideas.

But what happens?  What happens to those golden notes, sales insights, new profit centers, tips from the pros?  When you get back all those burning ideas start to smolder, smoke, get warm and then cool in a pile on your desk as you slip back into the same old routine of a struggling small business.

You drop the ball, lose your enthusiasm, ideas fade as life takes over.  Your commitments you made during the seminar to changing your business  were not kept.  Why not?  What happened between the reigniting of your enthusiasm at the convention and the return to real life?

What you decide to do immediately after a class will determine how well you implement the ideas you just learned.  You have 15 minutes between classes – make good use of that.  What you do immediately upon returning home will determine how successful you are with the new ideas.  Take the time to study your notes, the handouts, the brochures.

The minute the seminar is over find a quiet space for 15 minutes. Open your laptop and take out your notes.  Make notes about your notes.  You are not going to remember what your shorthand means 30 minutes after the session.  Make sure you understand everything you wrote down – every note must be made clear enough for a stranger to understand.

Between classes is not the time to network and visit with fellow store owners.  There is plenty of time scheduled for that.  Now is time to clarify your thoughts about the class you just finished.

Study the ideas and how they will apply to your business.  Discover how you will make it work.  Take notes on that.  Carry a method for storing ideas about what you learned with you – a laptop or netbook, a digital recorder, or just a paper notebook.  You have to capture those bursts of genius that evaporate the minute somebody says Hi.

The vast volume of profit-making ideas coming out of an AMPC Convention is overwhelming.  You have spent money to participate and AMPC has spent money to impart new and profitable information to you, the information needs to be implemented – that’s why you came.

AMPC Conventions always paid off for me when I limited myself to three new ideas on either side of the ledger – three new profit makers and three new cost savers.  I picked up as much material as I could get my hands on, eliminated some that night in the hotel room, reviewed what was left on the trip home for the six ideas I needed and threw the rest away.

You have to throw the rest away.  File it for later and either there will be no later or later will mean out of date and useless.  Throw it away.

As soon as you get home rewrite your notes, organize your actions, set priorities, and let your plan season for one week.  Just set it aside and let it ferment.

After a week, pick it up again and revise it, add new thoughts to it, and finalize the plan to implement each priority.  Then read it every day – every day.  Eventually you will start to act on the plan, you will change a procedure, call a vendor, change your pricing, add a profit center.

By the time you have finished your plan, it will be time for AMPC 2012 which will compound the growth you realized from AMPC 2011.

Registration Form – 3-Page pdf

The USPS says it has 229 Post Offices and 137 Stations and branches whose operations are suspended, although it isn’t 100% positive- the USPS response says: “Despite significant effort, this list may still contain errors.”

Read the List Here