Washington ReportKeeping Members Informed About Regulatory Issues Contents |
POSTAL ISSUESONE LAST PUSH FOR POSTAL REFORM House Postal Subcommittee Chairman John McHugh (R-NY) has called several meetings recently with supporters of postal reform, including The DMA, asking them what they're willing to do to try to make postal reform move in Congress this year. McHugh has also made some changes in the bill, primarily deleting the controversial Private Law Corporation. We urge you to contact your Senators and Representatives, even if you have done so in the past, and tell them that the Postal Service is facing a crisis and that a viable Postal Service is crucial to your business. HIGHLIGHTS OF THE APRIL MTAC MEETINGReported by Jon Mulford, The DMA's Postal Consultant 1. USPS FISCAL OUTLOOK Through Accounting Period #7, USPS net income slightly exceeded $1 billion, which is $275 million less than "Plan." For FY 2000, the USPS goal is a net income of $100 million: the expected loss of $900 million between AP#7 and the end of the fiscal year (9/30/00) would result from normal seasonal drops in postal revenue. The good news is that costs are down a little, and the total number of career employees is down about 10,000 from the same time last year. 2. DELIVERY QUALITY AND POSTAL PRODUCTIVITY The USPS reported improvements of a bit more than 2% in both labor and Total Factor Productivity over the last three quarters, due in part to an increase in volume of 6.5 billion pieces and an 11,000 headcount reduction. The USPS also reported record-setting delivery performance for overnight 1C mail. Mailers, however, complained about deteriorating delivery performance in Standard (A) and First-Class, including Business Reply mail. BRM delays may be caused in part by USPS accounting requirements. On the surface, there appears to be a link between delivery performance and employee headcount. Mailers often contact postal field personnel when delivery problems are detected. They should also direct complaints to the Business Service Network (BSN) so the USPS can construct a composite picture of delivery delays. 3. PERIODICALS COMPLAINT TRACKING SYSTEM "PCTS" is a system which allows mailers to report delivery problems to the USPS via the Internet. Complaints can then be directed to the affected Delivery Unit, which can monitor deliveries and correct the problem. The new system will be tested in Chicago and Long Island, NY, starting July 1; the target implementation date is 9/1/2000. Approximately 11,500 Delivery Units that have appropriate computers will be involved. 4. IMPROVING ADDRESS CORRECTION NOTIFICATIONS The goal of the ACS work group is to improve the accuracy of the procedures by which the USPS transmits address correction information to mailers. Current problems include providing notifications via hard copy (at $.50 each) that should have been provided electronically (at $.20 each), and citing inaccurate reasons for nondelivery. The USPS also maintains that some reasons for nondelivery, such as a deceased addressee, must be provided via hard copy. When this policy was questioned, a USPS manager noted that changing the policy would be a significant undertaking. Errors can be reduced by training the carrier work force - about 250,000 employees - in the many intricacies of handling undeliverable as addressed mail. A second alternative is to ask carriers to mark the piece with the reason for nondelivery, then forward all undeliverable pieces to the local forwarding (CFS) unit. The national CFS staff of about 6-7,000 employees is more familiar with forwarding rules, and errors should be reduced. This concept - sending all undeliverable as addressed pieces to a CFS unit - will be tested, probably in ZIP code areas close to Postal Headquarters. 5. USPS eBUSINESS STRATEGY The "eBusiness Strategy" is intended to enhance the value, availability, and affordability of postal products and services. Many postal products such as delivery confirmation are already available via the Internet. But perhaps the most ambitious goal of the Strategy is to provide (at the postal customer's option) a personal postal e-mail address: a unique identifier that can be used by the customer wherever he lives. This is a long-range project; many details and consumer protections remain to be worked out. 6. H.R. 22: POSTAL REFORM LEGISLATION; NEGOTIATED AGREEMENTS In an attempt to move HR-22, the controversial Private Law Corporation has been dropped from the bill. However, given the relatively few days remaining in the current legislative session, the probability of the bill's passage isn't high. A "Negotiated Agreement" provision is included in the Bill. However, such agreements may be possible under current law. The USPS thinks not, although the Postal Rate Commission has apparently signaled recently that it might be receptive to the idea. 7. FLATS IMPROVEMENT PROGRAM Mailers and the USPS jointly are trying to develop long term flats processing strategies. Current efforts include:
As part of the program, the USPS will allow mailers (on a test basis) to prepare flats in EMM trays. Permission may be obtained only by writing to a Rates and Classification manager. The USPS would like the trays to be as full as possible; flats packaging rules must be followed - the tray should be considered to be a sack, for presort purposes; trays must be palletized; only flats up to ¾" thick can participate in the program. 8. STANDARDIZED ACCEPTANCE AND VERIFICATION PROGRAM (SAVE) The SAVE program is best described as a manual precursor to MERLIN, an automated device for mail acceptance which will check letter mailpiece and barcode integrity, as well as presort accuracy. Initially conceived for checking mailings produced by merging mailpieces on MLOCR machines, SAVE will be extended to mailings produced by lettershops from normal mailing lists. In tests to date of 7,429 mailings, 313, or 4.2%, of the mailings contained errors exceeding the allowable 4%. From May 1 through Oct. 15, 2000, the USPS will report errors detected to the mailer, but will not assess postage penalties. The USPS is going to great lengths to insure that mailer samples will be selected randomly and that sample sizes will be large enough to provide statistical reliability for the observed results. The Mail Quality Assurance (MQA) program will pass mail through a barcode sorter; output reports will be compared to data supplied by the mailer, to see if there's a match. This post-acceptance MQA test looks for discrepancies between the machine count and the number of pieces claimed to have been mailed, as well as for presort errors. The USPS goal is to significantly improve the accuracy of mail acceptance procedures. It's currently difficult and expensive for a mail acceptance clerk to accurately check presortation: a hurdle the new procedures are expected to overcome. After October 15, mailers will be assessed postage penalties for errors found by the new programs. The USPS recognizes the need for absolute accuracy when assessing postage penalties and is proceeding cautiously but steadily. 9. PLANET CODE/DELIVERY CONFIRM PROGRAM Planet codes are a slightly different version of the Postnet barcode; they can be read by USPS barcode reading machines, which record when mail pieces were processed: data which can be retrieved through the Internet by mailers, to track the progress of their mailpieces (either outgoing or incoming) through the automated processes of the USPS. Since the Spring of 1998, 110 mailers have participated in the Planet code "confirm" test; USPS capacity is about 90 million scans per day. The system will be upgraded on June 19, 2000; 60 to 90 days later, the system should be opened to additional mailers. 10. MAIL TRANSPORT EQUIPMENT (MTESC) NETWORK As of January 15, 2000, all 22 sites of the network were fully operational. Every week the system processes:
The good news is that satisfaction with MTE procurement surged from 70% before MTESC, to 77%, after implementation, according to surveys. MTE personnel are working to improve transportation reliability, expand remote order fulfillment, and establish additional order fulfillment sites. They also are concerned with the return of unused MTE, and are reviewing standing orders and identifying chronic offenders. 11. USPS FIVE-YEAR STRATEGIC PLAN The USPS published its five-year strategic plan in the April 5 Federal Register and is soliciting comments from mailers. The comments deadline is May 15, 2000. USPS PURSUES NEW E-COMMERCE STRATEGIES The U.S. Postal Service is taking steps to use the Internet to better serve customers, Tom Cinelli, program manager, USPS, told attendees at The DMA's 12th Annual Deliverability Symposium on April 6 in New York. Cinelli reported that the Postal Service's new e-commerce strategy is already unfolding and will include initiatives to be launched online as early as this summer. The proposals include: NetPost - From Desktop to Mailbox NetPost, which combines desktop publishing, the Internet, distributed digital printing, and universal hardcopy mail delivery for small volume mailings of fewer than 5,000 pieces, will probably be the first service available. Using this tool, low-volume customers will be able to create a document from their personal computer, upload it, and proof it. Then the document and a mailing list will be electronically sent to a network of licensed printers arranged by the USPS, printed and labeled, and sent to the USPS for delivery to the recipient. Presort discounts will be available. An experimental rate case on implementing the NetPost will be probably filed with the Postal Rate Commission this summer. Post eCS - The Electronic Postmark The USPS is also joining forces with Canada Post and La Poste in an international project developing "Post eCS," a system for securing and ensuring delivery of e-mail, Cinelli reported. With Post eCS, the USPS ensures customer's security by adding an electronic postmark to all documents that are sent via e-mail from deliverer to recipient. By using unique passwords at a tamper-proof site, both the sender and receiver can access messages, documents or other electronic communications with assurances that no one else has viewed the communication along the way. Post eCS offers a variety of benefits, including global applications; delivery at "Internet speed"; low cost (estimated at 40-70 cents a piece); tracking, and document integrity, including encryption applications supplied by the sender. Other unique USPS benefits will include both a tamper detection system and a trusted time and date seal and recourse if tampering and misrepresentation occur. Shipping Online - Airborne Express As the online marketplace booms, the USPS is enhancing its current e-commerce support functions, Cinelli said. Looking to build upon its core competencies - affordability, reliability and effectiveness - the USPS is upgrading its online shipping service. The USPS has also built a partnership with Airborne Express to deliver parcels and packages to P.O. boxes using Priority Mail. This would apply to business-to-business shipments only. Shipping Web Tools - Electronic Merchandise Return To complement their shipping services, the USPS is also planning to launch new Web tools available to a company's customers. In an effort to improve customer service at marketers' sites, the upgraded Postal Service Web site will, among other things, allow customers to link to www.uspsprioritymail.com and other USPS-sponsored sites without having to leave the marketer's site; allow rate calculations for domestic and international mail; and provide easy access to USPS shipping information and tracking of overnight packages. In addition, the USPS will offer a function called "Electronic Merchandise Return," for customers who want to return an item to any direct marketer. An e-shopper, for example, that is dissatisfied with a product can send it back to the Internet retailer via the USPS. The Electronic Merchandise Return system determines the type of service needed to return the item, identifies the return address, and prepares the label for the customer. FIFTY-TWO AG'S OPPOSE CMRA RULE CHANGE The Attorneys General of every state, the District of Columbia, and the Virgin Islands have filed comments with the Postal Service opposing the amendment to the CMRA rules that would permit persons and businesses using a commercial mail receiving agency mailbox as their address to designate that address by a "#" symbol, rather than by PMB (Private Mail Box). In their letter, the Attorneys General stressed that their chief concern with respect to CMRA addresses is the use of those addresses in a manner that misleads consumers as to the geographic location of the sender and/or the nature of the facility located at the address given. The letter gives two examples of the kinds of deception that can result from this problem. The Attorneys General emphasized that permitting persons using a CMRA mailbox to designate themselves by "#" rather than "PMB" would increase, not decrease the potential for fraud; cause confusion for non-CMRA clients whose addresses include "#"; impose an unrealistic burden on consumers to determine the meaning of "#" in any and every case; and hamper the efforts of state law enforcement to take action against consumer fraud.
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