Associated Mail & Parcel Centers Blog

Problems that are costing you money and how to fix them

Your business in the mail and parcel industry is hard enough when trying to keep up with the latest technologies and changes in the marketplace. Sometimes it can be hard to find time to look at your operation to find inefficiencies so they can be fixed. If you find the time, however, your bottom line is going to move in a positive direction. Here are two common problem areas where you can try to increase your profits:

The undeliverables

You’ve done everything you can to get your parcel sent out and delivered on time, only to find yourself looking down at it because it came back undeliverable. Maybe the address was off, maybe the carrier was at fault, or maybe it just wasn’t meant to be. The end result remains the same, however. You’re going to be out money one way or another, either directly or through taking the time to fix the problem.

First, consider the tools you have in place to help make sure everything goes smoothly. Are you using the Coding Accuracy Support System to make sure the address entry is correct and deliverable? Are you checking databases to find out what addresses are proven to be deliverable? If not, you might as well be giving away money. These basic failsafes need to be in place before you can even consider fixing the problem. If you’re already doing the above, then it’s time to start tracking your entire process. Once you have enough data you can track the undeliverables and find common factors that cause the shipping to go awry. Fix the problems and you’ll have more money in your pocket.

Optimization

If you take a hard look at your operation, it’s likely you’re spending too much money somewhere. Maybe you’re paying too much for supplies, or your labor costs are out of sync with your customer flow. In some cases, your shipping costs could be inflated because of an inaccurate picture of how your customers use your service or what they ship. It’s easy to look at things and think, “This is how it’s always been so it must be right,” but that’s not going to get you anywhere.

Make the time to undertake a widespread analysis of your business. Look at the factors mentioned above (and anything else you spend money on) and see where areas could be improved. If you don’t have any opportunities for optimization then you are an amazing businessperson and it’s time to open a few more locations. In reality, many in the industry have several small areas that need to be optimized that can add up to big bucks.

Take a close, honest look at your business and you’ll be surprised at the money you can find.

Author’s bio: Ryan Franklin is a guest blogger and expert on shipping in all its forms. He knows what’s what when it comes to yacht transport and parcel shipping, and everything in between.

Layoffs, early retirement, closing plants and distribution centers, closing or reducing the hours at unprofitable Post Offices, begging the Congress to send bailout money are a few of the more known desperate attempts for the USPS to save itself.

On the revenue side they have introduced new products and services like Every Door Direct Mail, better tracking information, flat rate boxes, and new Workshare products with private mailers.  And they still lost $3.2 billion in the first three months of 2012.

Now they are attempting to take the business of Private Mailbox Rentals from small family businesses in their neighborhoods.

As the owners of the First Class Mail monopoly, they did very well.  Their contribution margin on First Class Mail is 285%, while Standard Mail gets just over 100%.  As First Class has been electronically taken away from the USPS, their most profitable product has been almost eliminated.  Trying to generate three times the quantity of Standard Mail to make up for the loss has been a failure.

AMPC and 12 other industry leaders and associations are in a battle to stop the USPS from winning the Mailbox Wars – the usurping of our business by an untaxed government behemoth with a $100 million advertising budget.   This David versus Goliath fight between a powerfully connected and deficitly financed organization and the efficient small shop down the street, locally owned, family run, with an advertising budget of 1/10 of 1% of the enemy, paying local, state, and federal taxes, supporting local charities, and contributing to the local economy, is corruption at its worse.

Where else in the world does a country’s government take over the private sector enterprises?  I could name a few places, but their political systems are a little different from ours.

I have been advised by who I would consider respected, professional, smart business people in this industry that this fight is not worth the trouble.  It’s not a big deal they say.  We all know that the USPS will do as well with this as they did with the Bugs Bunny neckties.   Besides doesn’t it call attention to the Private Mailbox Business?

I do not doubt the fact that the USPS will, as in all other attempts to compete with the private market place, fail at providing the quality of service we are so successful at delivering.  When a government, even with its vast advantages of deficit spending, no tax liabilities, and significant marketing budgets, tries to compete in the rules of engagement in the business world, they are bringing a knife to a gunfight.  The incentives and punishments of private businesses mean nothing to them; they are not able to comprehend the thoughts of a person who has risked his family savings to work without paid vacation, pension, sick leave, annual leave and carryover accrual, health insurance with vision and dental, family medical leave, expense accounts, junkets,  conventions, education reimbursement, and holiday leave, to provide for his family.

Compare a postal employee to be given the choice between making another $1000 sale or taking Friday afternoon off and the same choice offered to a shop owner and you can see why the war can be easily won.  How often do you see a postal clerk forgo her break to speed the long line through the Post Office?

So why would AMPC spend the hours and the money it takes to chase this windmill?

It’s because it’s wrong.  To see an American industry so unfairly attacked and devastated by its own government requires action.  You expect action from us and it would be irresponsible for us to ignore this.   And the rest of the industry agrees:  13 industry organizations consisting of for-profit and not-for-profit, trade groups and franchises, turnkeys and owners’ groups have coalesced into a united front to defeat the subterfuge of the USPS to take our business.

You can help.  Soon there will be an opportunity to comment to the docket on the Postal Regulatory Commission website, but in the mean time, armies need money for weapons and supplies.  Please consider a donation to the cause to protect your store from the onslaught of USPS competition by going to www.fightformympc.com and making a donation.  Donations are averaging $100, but any amount will be appreciated.

Our job is to provide opportunities for you to become successful.  Part of that job is to take down the barriers that keep us from doing that.

The Mail Box Wars

The PRC has accepted the Complaint filed yesterday. The Docket for the complaint is C2012-1. The Docket was established on 3/15/2012.

This is the first significant step in getting the Post Office to cease its predatory and unfair enhancement of the PO Box service.

We have presented a logical, reasonable, and legal argument against the USPS’ subterfuge to close down the family businesses that make up the retail shipping community. We expect the USPS to bring down the full power and resources on us to defeat this complaint, but with your help we are confident we will win.

The following organizations have joined the Complaint:

ASSOCIATED MAIL AND PARCEL CENTERS
PAKMAIL
PARCEL PLUS/KWIK COPY BUSINESS CENTERS
POSTAL CONNECTIONS
POSTNET
RETAIL SHIPPING ASSOCIATES
SAFE SHIP
THE INDEPENDENT COALITION OF FRANCHISE OWNERS
THE MAIL BOX STORES
THE NATIONAL ALLIANCE OF RETAIL SHIP CENTERS
TOTAL CHOICE SHIPPING
YESS STORES

We will be asking you send comments to the PRC in support of the Complaint. A sample letter will be posted on  www.fightformympc.com.  If you plan on establishing a Permanent Account for online submittals, you should send the application in soon.

The PRC would like everybody to set up a Permanent Account.  A Temporary Account is set up if you want to file a comment immediately.  The PRC suggests strongly that you follow the Temporary Account up with a mailed in application for a Permanent Account.  If you have trouble, they will walk you through it.

PRC Account Procedures

Temporary Account

A temporary account can be obtained online immediately. It may only be used to file a notice of intervention or a comment that has been solicited by the Commission. It expires after 10 days. A temporary account holder who intends to participate in a proceeding on an ongoing basis is urged to apply for a permanent account as soon as possible.
Apply Online

Permanent Account (Principal & Agent)

A permanent account is required to submit most documents in Commission proceedings. It is also required if the applicant desires status as a Principal Account Holder or Agent Account Holder. A permanent account holder must confirm that he or she is authorized to represent the participant indicated on the document filed and must warrant that all documents filed under the account are authentic and accurate.

A completed application for a permanent account must be mailed or hand delivered to:
Secretary of the Commission
Attn: Docket Section
901 New York Avenue, NW, Suite 200
Washington, DC 20268

After acceptance by the Secretary, the applicant will receive an email with a username and a temporary password. Upon receipt, the applicant should immediately access the Filing Online Profile Page and select a permanent password. Users who are converting from temporary to permanent accounts will receive a message confirming the change in their account status. They should continue to use the username and password they initially selected.

Download a PDF of the Permanent Application.

Have you ever had a business partner?  I had one once and partnerships can be very tricky to maintain.  Trust, but verify comes to mind.  Each party needs to trust the other, but just in case one of the partners lacks the ability to remember, an understanding in the form of a Partnership Agreement needs to be agreed upon.

We as individual stores have agreements with the three major carriers that could be seen as a partnership.  But occasionally a carrier, with its internal, competing fiefdoms, violates the spirit of the contract, creating an adversarial relationship by competing with us.  One department, by doing its job supports our businesses, while another department by doing its job, competes with us.

These departments, internal to an organization, also appear to be competing against each other.  Such is just the nature of large organizations.

Speaking with Postmaster General Patrick Donahue last year, he emphasized the value of retail partners like USPS Approved Shippers by calling them, along with Contract Postal Units, Village Post Offices, and other affiliates, essential partners to the survival to the USPS.  These replacement Postal outlets have the verbal support of the Postmaster General and his Executive Team.

So why has the USPS seen fit to imperil these very businesses by directly competing with the local neighborhood shipping stores?  The USPS has offered the following services to PO Box renters who have boxes in the designated Competitive List areas:

• Offering Post Office Box renters the use of the Post Office street address for Post Office Box addressing.
• Offering Post Office Box renters email notification of mail delivery.
• Offering Post Office Box renters the use of the “#” designation.
• Offering Post Office Box renters to receive packages from private carriers.
• Allowing Post Office renters the use of Change of Address Forms allowing the USPS to forward renters mail at no charge.
• And, eventually, the only address that will get mail on Saturday.

On the USPS’ entry into the express market, Fred Smith from FedEx said:

“The problem with the USPS’s vain attempts to compete … is that there is not a shred of evidence that its entry into the field serves any public interests. There are, to be sure, important interests worthy of consideration, primarily those of postal workers and the postal family. However, a convincing argument has yet to be made to show that the public interest requires the Postal Service to use its monopoly … to gain an advantage in a service that can be and is being provided more efficiently by private enterprise. Moreover, it is noteworthy that these private companies, with which the USPS seeks to compete, pay taxes while the USPS does not; purchase license plates for vehicles, which the USPS does not; and, unlike the USPS, must comply with zoning restrictions and pay fees and other charges; are subject to customs laws; and are constrained by a host of government-imposed burdens.”

Unfair competition – that is the essence of the argument of stopping the USPS from adding the mail receiving enhancements that have been enjoyed by the customers of Commercial Mail Receiving Agents.  No sales tax collected, no property taxes, no gas taxes, no license plates, no local codes or regulations to follow, and a $100,000,000 marketing budget allows the USPS advantages beyond comprehension.

Even if the above advantages of the USPS are tempered with the inefficiencies of unions, bureaucracy, PRC, Congressional regulation, and a monopoly mentality, the USPS still has an unfair competitive playing field with FedEx and UPS.  But let these behemoths battle it out amongst themselves.  Their armies are large are fairly balanced.

On the other hand, the USPS is now attacking the foundation of American economics.

When the USPS unleashes its firepower on the local mom and pop, independent family businesses, it’s the US Government versus the family and that’s wrong.

When the USPS uses its labor, which is paid for by postage, to move and deliver private carrier packages, to subsidize these businesses by consolidating their delivery stops, returning undeliverable packages, and communicating delivery information to the private carriers’ customers, that’s wrong.

When the USPS, who regulates Commercial Mail Receiving Agents, does not allow them to use the USPS Change of Address system for their customers, but allow the use of that system for PO Box customers, that’s wrong.

To claim financial reasons to implement five-day delivery for Private Mail Boxes, but service the PO Boxes on Saturday, that’s wrong.

Competing with the businesses you regulate is unethical, unfair, and corrupt.

Now we fight.  We fight with everything we have.  We will be commenting on the Docket we created on the PRC site.  We will be writing letters to our Congressmen during an election year.  We will be writing letters to the House and Senate leadership.  And we will travel to Washington DC to confront the responsible people.

We cannot do this alone.  We will need your help.  Although we have other organizations willing to sign complaints, wars are expensive and signatures do not buy ammo.   If you are not an AMPC Member, join us at the Classic Level; if you are not a Classic Level Member, upgrade, if you are a Classic Member, renew.  This will become a fight for our existence, our survival, and the basis for our businesses.

Join the fight at www.ampc.org.

Keep informed at http://fightformympc.wordpress.com/

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.

AMPC currently has a complaint out for review with multiple major groups in this industry. We have requested their signature to the document so we can submit it as one joint industry. We have signatures and/or commitments from:

The Mailbox Stores
ICED (Parcel Plus / Kwik Kopy Business Center Franchisor)
NARSC
RSA

We expect to hear from a couple more of the franchisors soon. Regardless, we will submit the complaint on February 2nd.

We have been in constant contact with the PRC and pushing them for a timeline on assigning a public rep and case. As soon as we have that, we will share it.

Shawn Dykes of Mail Movers sent me some information from the National Association of Presort Mailers (NAPM), who are also in opposition to the enhancements, in particular the use of a Street Address. They are bringing up their concerns with MTAC (Mailer’s Technical Advisory Council). AMPC is a member of the Parcel Shippers Association (PSA), which has a representative on this Council. We’ve reached out to both the PSA and the NAPM on this. We’ve heard back from some contacts on the MTAC and will be sending our complaint information to them as well as some contact at the Post Office.

Depending on timelines and progress with the PRC, we are looking at several options for our next steps. We will keep you up to date on the progress of these efforts.

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.

We knew that when the USPS requested that some PO Boxes be placed on their Competitive Price List it was not just to test higher prices.  It was the beginning of a government assault on the Private Mail Box business and that Commercial Mail receiving Agents (CMRAs) were their target.  AMPC, along with individual stores and other related organizations supported the effort to warn the Postal Regulatory Commission (PRC) that, although the mail and parcel industry could not object to prices going up for PO Boxes, enhancements to the the PO Box services must be put to public comment before implementation.

The PRC agreed with AMPC and other commenters.  From Order No. 473:

“if the Postal Service proposed to offer ancillary services to P.O. Box Service, those issues would be addressed in future proceedings.”

In a desperate attempt to cover mismanagement, the USPS managers have been assigned the task of getting new revenue no matter how it may affect the private sector economy.  The latest attempt is to allow ancillary services such as email notification, the use of the Post Office street addresses, acceptance of private carrier packages, the use of the  “#”  address designation.

Moreover, as a direct affront to the regulations that are imposed on CMRAs, the USPS will allow the use of the Change of Address forms and processes for former PO Box renters.

Customer Agreement for PO Box Services

USPS letter introducing new PO Box Services

This effort to use the tax and marketing advantages of the United State Postal Service to attack the livelihood of hard working families is un-American at the least and illegal  in its implementation.

We need the help of individual shipping stores to fight this battle.  Begin by joining us, now.   We will keep you informed of our progress and let you know when and how to take action against this government takeover of your business.

We cannot let the Postal Service steal our mail box customers.

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.