Company & Industry News

August 5, 2010

USPS ENDS THIRD QUARTER WITH $3.5 BILLION LOSS

CASH SHORTFALL LIKELY IN 2011, CUSTOMER SERVICE SCORES REMAIN HIGH

The Postal Service ended the third quarter of fiscal year 2010 (April 1 – June 30) with a net loss of $3.5 billion, compared with a net loss of $2.4 billion for the same quarter last year. Third-quarter mail volume totaled 40.9 billion pieces — down approximately 700 million pieces, or 1.7 percent, compared to a year ago.

Complete USPS third-quarter results include operating revenue of $16 billion, some $294 million less than the same period last year, and operating expenses of $19.5 billion, an increase of $789 million, or 4.2 percent, over the third quarter last year.

The increase in operating expenses was attributable largely to higher workers’ compensation expenses due to a non-cash fair value adjustment and higher retiree health benefits expenses. Lower interest rates adversely affected the workers’ compensation liability, resulting in a $2 billion expense for the quarter — $870 million higher than the same quarter last year.

A significant portion of USPS losses in the past few years has been due to an unprecedented decline in mail volume — down by more than 20 percent since 2007. The replacement of letter mail and business-transactions mail by electronic alternatives continues to cause downward pressure on mail volume.

The organization’s financial situation is compounded by its obligation to pay $5.4 billion to $5.8 billion annually to prefund retiree health benefits. This requirement, established in the Postal Accountability and Enhancement Act of 2006, is an obligation unique to the Postal Service.

August 2, 2010

PARCEL is excited to announce our upcoming webinar — Shipping Changes: What It Means to You, presented by Gary Reblin, Vice President Shipping Services, USPS.

When: August 19, 2010 at 2:00 PM ET

The U.S. Postal Service has recently made even more significant moves in the parcel delivery space to attract new shippers and enhance services for their existing customers. Join the new Vice President of Shipping Services, Gary Reblin, as he shares their groundbreaking initiatives including cubic-based pricing, smart packaging, tiered discounts, half-pound pricing and returns services. Gary recently took the reins of this new department and will be making his debut to our parcel shippers in this 30-minute webcast. Find out what new directions he has planned for shipping services and how they may impact your transportation plan — both outbound and inbound!

We would like to extend a thanks to Endicia who is making this event complimentary to all PARCEL readers.

 July 27, 2010

It’s official! President Obama has mandated that the US double its exports by 2015. That’s no easy goal to be sure but, PARCEL Forum is here to help. 

On October 4, PARCEL Forum is producing an All-Day Workshop entitled; Presidential Mandate: Double Exports! Learn All You Can about International Shipping, Now! This exclusive workshop has been developed by leading international shipping authorities in an effort to help you 1) gain information on how to export; 2) identify cost-effective and efficient ways to do so; and 3) gain specific skills in exporting. 

April 1, 2010

FIVE-DAY DELIVERY PLAN

POSTAL REGULATORY COMMISSION BEGINS REVIEW

The Postal Service has taken its case for five-day delivery to the Postal Regulatory Commission. 

The Postal Service is required by law to seek an advisory opinion from the PRC any time a nationwide change in service is proposed. Tuesday’s filing begins this review process. 

A report accompanying the request notes, “The Postal Service does not take this change lightly and would not propose it if six-day mail service could be supported by current volumes. There is no longer enough mail to sustain six days of delivery.” 

The five-day delivery proposal is part of comprehensive plan announced March 2, “Delivering the Future,” a roadmap intended to bring certainty to a viable Postal Service well into the future and to help it recover from dramatic losses in volume resulting from electronic diversion and exacerbated by the economic recession. 

The five-day report notes, “Ten years ago, the average household received five pieces of mail every day. Today, it receives four pieces and by 2020, that number will fall to three. Reducing street delivery to five days will help rebalance postal operations with the needs of today’s customers. It also will save about $3 billion a year, including reductions in energy use and carbon emissions.” 

Postmaster General John Potter said it was important to stress that the proposal dealt only with Saturday street delivery and that Post Offices will be open on Saturdays, access to PO Boxes would continue, Express Mail would be delivered seven days a week and incoming mail would still be processed.  

 March 2, 2010

 POSTAL SERVICE OUTLINES ACTION PLAN FOR FUTURE 

SEEKS FLEXIBILITY ON OPERATIONS, DELIVERY, POSSIBLE 2011 PRICE INCREASE 

Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General John Potter today outlined an aggressive plan of cost cutting, increased productivity, and an array of legislative and regulatory changes necessary to maintain a viable U.S. Postal Service. 

“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, stressing that there is no one single answer or quick fix to the crisis. 

The Postal Service examined revenue, volume and consumer trends. It analyzed revenue and product opportunities employed by foreign posts. And it examined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behavior. 

“The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public,” Potter said. 

Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in First-Class Mail alone. Revenue contributed by First-Class Mail will plummet from 51 percent today to about 35 percent in 2020. 

“Ensuring a Viable Postal Service for America,” the Postal Service business plan, addresses these challenges, and describes a flexible, agile Postal Service that can adapt to America’s changing mailing habits and preferences. 

If the Postal Service takes no action, it will face a cumulative shortfall of $238 billion by 2020. But Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service’s record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours. 

November 4, 2009

POSTAL SERVICE ANNOUNCES 2010 SHIPPING PRICES 

PRICE OF FIRST-CLASS POSTAGE WILL NOT CHANGE

The simpler way to ship — with convenient Priority Mail Flat Rate Boxes from the Postal Service — will be just as simple in the new year, when new prices take effect. 

Prices for Priority Mail, a product familiar across America through popular television and online advertisements featuring Al the Letter Carrier, will change on Jan. 4, 2010. Customers also can look forward to several Priority Mail innovations. 

In a first for the shipping industry, the Postal Service is introducing cubic volume-based pricing for large volume commercial Priority Mail shippers. Customers who ship small dense, space-efficient packages will receive a financial incentive through a new tiered pricing option. This encourages greener, more efficient shipping and is one more way the Postal Service is eco friendly. 

Other benefits for Priority Mail customers effective in January include a decrease in the domestic Priority Mail Flat Rate Envelope retail price from $4.95 to $4.90. The popular Priority Mail Small Flat Rate Box will continue to be one of the best consumer values in the domestic shipping market at under $5. Its 2010 price will remain at $4.95. 

Cubic volume-based pricing will not be the only first in January for customers who qualify to ship at Commercial Plus prices. A Priority Mail half-pound price, based on distance, will be added only in the Commercial Plus pricing category. And, a new Priority Mail Flat Rate padded envelope measuring 9.5 x 12.5 inches will be available exclusively for Commercial Plus shippers. This envelope is specially designed for jewelry, electronics and other delicate goods. 

“We have put together a range of creative and innovative products and services for our customers,” said Robert Bernstock, president, Mailing and Shipping Services. “With these new offerings, the Postal Service is reinforcing the value of Priority Mail as the right product at the right time,” he said. 

In addition to an overall price increase of 3.3 percent, on average, for Priority Mail, there will be new prices for Express Mail, Global Express Guaranteed, Express Mail International, Priority Mail International, Parcel Select and Parcel Return Service, also effective Jan. 4. 

Prices for First-Class Mail, Standard Mail, Parcel Post and other mailing services products will not change in 2010, with the cost of a First-Class Mail stamp remaining at 44 cents. 

“The Postal Service is the best buy in the market, whether you’re watching your budget or gearing up as the economy starts to rebound,” Bernstock said, noting that other shippers have announced price increases of nearly 6 percent for 2010, excluding fuel surcharges. Most shippers add extra fees for fuel, rural delivery, Saturday delivery and other items to a customer’s final bill. The Postal Service has no comparable surcharges. 

Customers who pay for their shipping services online will continue to save compared to retail prices. Online costs will be, on average, 5 percent less than retail for Express Mail and 5.7 percent less for Priority Mail. Online savings for international shipping will be 10 percent less than retail for Global Express Guaranteed, 8 percent less for Express Mail International and 5 percent less for Priority Mail International. 

A complete listing of 2010 prices is available at http://pe.usps.com under the “Jan. 2010 Price Change” link. The new prices and product innovations are pending Postal Regulatory Commission review.  

October 12, 2009

First off, congratulations! If you are reading this, you are probably still employed and working in the small-shipment and logistics industry. The past few years have not been easy, and if there is one thing they’ve taught us with respect to what we do, it’s that not having flexibility within our small shipment supply chain could spell disaster for both you and your company! Making yourself into a valuable asset and contributing to your company’s ability to fulfill orders in a timely, efficient and cost-effective manner has never been more important than right now. Now truly is the time to “Think Outside the Box” with your parcel shipping and warehouse operation – not when you and your company are in the middle of a crisis caused by factors outside of your control. 

For the past seven years, PARCEL Forum has stood not only the test of time, but has stood alone as the only event focused on serving the unique and ever-changing needs of the parcel shipping industry. Despite a challenging economy which impacted many trade shows in 2009, PARCEL Forum had one of its best events ever (Read the Testimonials). 

May 6, 2009

A SIMPLER WAY TO SHIP

The Postal Service is launching a nationwide advertising campaign to highlight the benefits of Priority Mail Flat Rate Boxes to business customers. Flat-rate boxes are an easy way to ship to any state for a low flat rate — if it fits, it ships! The whole country is one zone with flat-rate boxes. And there’s no need to weigh anything up to 70 pounds when you use a Priority Mail Flat Rate Box. On May 19, we’ll introduce a new website for Priority Mail information — prioritymail.com. Check it out for a simpler way to ship!  

February 28, 2009

The USPS — Saving It Before It Becomes Dire
by Harry Stephens, President and CEO of DATAMATX
It’s virtually impossible for any business to escape the worldwide economic difficulties today — and the United States Postal Service (USPS) is no exception. To offset the increasing expenses of daily business operations, the USPS is once again raising the cost of mail services, beginning May 11, 2009. Any company facing a $2.8 billion loss in one year — and possibly losing as much as $6 billion in this fiscal year — might describe its situation as close to dire. All of us in business know that tough times in a business call for tough decisions — and creative solutions. �
continue The USPS Saving It Before It Becomes Dire… 

November 9th, 2007

UPS matched the FedEx air & international rate increases of 6.9% and also announced a 4.9% ground rate increase! UPS two year compounded rate increases represent a 12.78% air & international rate increase and a 10.5% ground rate increase. Do you have room in your 2008 budget for these increases?