u.s. postal service in crisis beginning of the end? newspaper target marketing coalition new orleans...
TRANSCRIPT
U.S. Postal Service in CrisisBeginning of the End?
Newspaper Target Marketing Coalition New Orleans
March 7, 2012
USPS Challenges
• Volume – Declining Steadily
• Price – Rising but Capped
• Universal Service Obligation
• Labor Costs
• Pre-Fund Retiree Health Benefits
• Debt Ceiling – Maxed Out / $15 Billion
Volume by Mail Type
50%44%
4% 2%
2011 – 168 b PiecesStandard First ClassPeriodicals Shipping
57%37%
4% 2%
2016 – 144 b Pieces
Standard First ClassPeriodicals Shipping
Revenue by Mail Type
27%
49%
3%16%
5%
2011 Actual - $66 b
Standard First ClassPeriodicals ShippingOther
31%
41%
3%
20%
6%
2016 Projected – $62b
Standard First ClassPeriodicals ShippingOther
USPS Incurring Unsustainable Losses
USPS Strategic Plan $20 Billion Savings by 2015
• Legislative InitiativesEliminate Pre-Funding of Retiree Health Benefits
Eliminate Saturday Delivery Refund Overpayments to Federal Retirement System
• Operational InitiativesRetail: Closing Down Post Offices Network: Close and Realign Sortation and Transportation FacilitiesService Standards: Change Overnight Delivery of FCM/PeriodicalsReducing Workforce by 155,000 Employees Manage Own Healthcare Outside the Federal Government
What Does Congress Think?
Legislative ProposalsU.S. House of Representatives (H.R. 2309)
Turn USPS over to a Control Board Commission for Post Office Closings Eliminate Saturday Delivery Increase Rates (CPI & 5%) for “Underwater” Products (e.g. Periodicals)
U.S. Senate (S. 1789)
Provide USPS with RHB / Pension Relief Eliminate Saturday Delivery (after 2 years and a GAO study) Non-Postal Products (E-Commerce?) NSAs can Lose Money to Retain or Grow Volume
What Does Future Look Like for Newspapers ?
1. Periodicals Higher Rates/Poor Service
2. Standard Mail Continued Pressure on Rates New Promotions (Sat/H.D. Incentives/Mobile Barcodes) USPS Strays into Private Sector Competition (EDDM)
Opportunities for Newspapers
1. Distribution Revenue Delivery of Magazines 5-day Delivery (Newspapers Own the Weekends) Convince Congress to Open Up the Mailbox?
2. Convince USPS of a TMC Retention Strategy Data on TMCs in Alternative Delivery Creative Proposals or Price Adjustments Over Time