Bipartisan Postal Reform Points the Way Toward a Sustainable USPS  

Picture1And now for some good news.

In a rare moment of bipartisan cooperation in the US Congress, the House Committee on Oversight and Government Reform recently passed two bills aimed at overhauling the operations and finances of the United States Postal Service (USPS).

H.R. 5714, the Postal Service Reform Act of 2016, will reform retiree health care benefit funding, reform pension funding , include a Medicare part B premium transition for newly enrolling Postal Service annuitants and family members, transition to more efficient and secure mail delivery, and establish competitive, market-dominant mail rates.

H.R. 5707, the Postal Service Financial Improvement Act of 2016, would amend Title 5, United States Code, and direct the Secretary of the Treasury to invest 25% of the currently available portions of the Postal Service Retiree Health Benefits Fund (RHBF) into index funds.

The bills seem to reverse provisions of the infamous 2006 Postal Accountability and Enhancement Act (PAEA) which legally mandated tens of billions of dollars in annual pre-payments to the RHBF against projected future obligations, which resulted in huge annual losses to the USPS, significantly reduced cash flow, and impaired the management of day-to-day operations. For more depth on the PAEA, see this MailBlogx post from 2013.

If successful in achieving the desired outcomes, H.R. 5714 and 5707 will address three big issues that have severely threatened the sustainability of the USPS in recent years: 1) lack of revenue, 2) inefficiency, and 3) the overwhelming burden of financial obligations to future retirees.

Fingers crossed.

 

Mandated USPS Pricing Rollback Effective April 10

Caution: Falling Price Zone! It’s hard to imagine but it looks like we are about to see a once in a lifetime event this month, as the USPS will be forced to lower its prices. Falling Rock Zone SignAccording to a DDM Advisory released today:

Absent Congressional or Court action to make the existing exigent surcharge for Market Dominant products and services part of the rate base, the Postal Service™ will be required to reduce prices for Forever stamps and other mailing products, effective Sunday, April 10.

See the chart below for details:

Product New Price Old Price
1-ounce First-Class Mail letter $0.47 $0.49
Letters with additional ounces $0.21 $0.22
Letters to international destinations $1.15 $1.20
Postcards $0.34 $0.35

We can also expect to see a decrease in commercial prices. The advisory goes on say to that “price reductions are required because the Postal Regulatory Commission has ordered USPS to reverse a 4.3 percent exigent surcharge that has been in place since January 2014.”

 

Global Mail Delivery Delays Update: February 29, 2016

Happy Leap Year!World Map_standing image

Here are the current areas of the world that may be experiencing mail delays.

Source: International Delivery Solutions

Figi – Feb 21st Fiji reported widespread flooding, damaging winds and rain from Tropical Cyclone Winston, prompting the government to declare a 30-day state of natural disaster. the capital city and international airport are resuming services, remote islands sustained the most damage.

Spain, Portugal and France – Severe Weather impacted parts of Europe: Feb 13-14th causing flooding.

Canada – Canada Post Holiday – Family Day Holiday – British Columbia on was on Feb 8th/.  Rest of Canada on Feb 15th.  Also for planning purposes, Good Friday & Easter Monday: Canada Post will be closed on Friday March 25th. There will be NO delivery of mail on Easter Monday, March 28th.

February 2016 USPS Updates on Pricing Negotiations

 

Update 1

A recent DMM Advisory indicated how it plans to notify the Postal Regulatory Commission of adjusted pricing based on the current exigent surcharge revenue target. For more explanation on the surcharge and its relationship to the Consumer Price Index, see here.

Absent Congressional or Court action to make the existing exigent surcharge for Market Dominant products and services part of the rate base or to otherwise extend it, the Postal Service™ will be providing notice to the Postal Regulatory Commission of the adjusted prices that are posted on Postal Explorer® at pe.usps.com. The Postal Service intends to provide such notice of the adjusted prices to the Commission 45 days before it is anticipated that the exigent surcharge revenue target will be reached.

 

Pushback

Pushing back

Update 2

On February 12, the Association for Postal Commerce (PostCom) submitted reply comments to the Postal Regulatory Commission (PRC) on the Annual Compliance Report for Fiscal Year 2015 filed by the USPS on December 29. See below for comment highlights:

  1. USPS responses highlight its struggles to manage costs associated with Standard Mail Flats
  2. USPS responses reinforce concerns regarding its ability to accurately measure and comply with applicable service standards
  3. The PRC should reject price increases for Standard Mail Flats
  4. USPS responses confirm the need to better identify root causes of cost changes before taking drastic remedial action
    • USPS has not explained cost drivers
    • USPS answers highlight the need for greater use of IMb data in costing
  5. PostCom reiterates its contention in its Initial Comments that many of the cost increases shown in the FY 2015 ACR are a result of the inefficient use of Postal infrastructure

The full text of the reply comments is available here.

Midwest Winter Storm Update

XPO Logistics reports that they areWinterDude beginning to resume normal operations after a large winter storm left significant snow in areas of the Midwest.  Freight scheduled for pickup or delivery today or that is traveling through these areas may experience a 1-2 day delay.

The following location is closed today:

  • Nebraska – Grand Island

The following locations are operating on a limited basis depending on road conditions and accessibility:

  • Iowa – Omaha/Council Bluffs, Sioux City, Fort Dodge, Clear Lake, Ottumwa

Winter Storm Hits Midwest

WinterDudeIn the latest round of nasty weather, a large winter storm is impacting some shipping and mailing operations in the Midwest.

XPO Logistics reports that freight scheduled for pickup or delivery today or that is traveling through these areas may experience a 1-2 day delay.

The following locations are closed today:

  • Colorado – Denver
  • Iowa – Omaha/Council Bluffs, Des Moines, Mason City, Sioux City, Fort Dodge
  • Nebraska – Grand Island
  • South Dakota – Sioux Falls
  • Wyoming – Cheyenne

Normal operations will resume as soon as conditions clear and roads are safe for travel.

The Unites States Postal Service (USPS) has not posted any new Service Alerts to their site as of 10:15 EST so there is no official information on delays in the Midwest at this time.

Winter Storm Jonas Causing Mailing And Shipping Delays

blizzardWinter Storm Jonas is wreaking havoc on the east coast of the United States today, causing delays and suspension in shipping and mailing services.

United States Postal Service

USPS service in Maryland, North Carolina, and Washington, DC will feel the effects of the wintry onslaught and customers can expect suspended retail and delivery operations.

The USPS has issued the following alerts:

  • Maryland
    All operations will be suspended at 2 p.m. in the Baltimore area. Impacted three-digit ZIP Code areas include 210-219 and 254.
  • North Carolina
    With the exception of the Rocky Mount plant, all operations have been suspended in the Greensboro area, including Greensboro P&DC, Greensboro NDC and Raleigh P&DC. Impacted three-digit ZIP Code areas include 270-277 and 286.
  • Capital District
    Collection from collection boxes will be completed today by 3 p.m. All Post Offices, stations and branches in the Washington, DC, metro area will be closing between 2 p.m. and 3 p.m. This includes all plants and bulk mail acceptance units.

Service Alerts

XPO Logistics

Logistics operations and shipping carriers are also feeling the pain. The storm is predicted to deliver large amounts of ice and snow which will impact travel from Tennessee east into Washington DC, Philadelphia, New York City and Boston throughout today and into the weekend.  Major interstates may become impassable for a period of time resulting in significant delays.

XPO Logistics is notifying customers that freight scheduled for pickup or delivery today or that is traveling through these areas will experience a 1-2 day delay.

The following locations are closed today:

  • Arkansas – Little Rock, Jonesboro
  • Kentucky – Paducah, Hopkinsville, Lexington, Louisville, Campbellsville
  • North Carolina – Asheville, Charlotte, Greenville, Hickory, Winston-Salem, Charlotte, Raleigh-Durham
  • Tennessee – Humboldt, Nashville, Memphis
  • Virginia – Roanoke, Wytheville
  • West Virginia – Charleston, Huntington, Parkersburg

The following locations are running partial operations today:

  • Mississippi – Tupelo
  • North Carolina – Wilson
  • Tennessee – Knoxville
  • Virginia – Norfolk

Service Level Map