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June 29 2009 10:55 AM

    Alliance to Testify at House of Representatives Hearing
    The House of Representatives Subcommittee on the Federal Workforce, Postal Service, and the District of Columbia will conduct a hearing on May 20 entitled: â¬Å"Nip and Tuck: The Impact of Current Cost Cutting Efforts on Postal Service Operations and Network.â¬â

    Subcommittee Chairman Stephen F. Lynch (D-MA) has invited Alliance of Nonprofit Mailers Executive Director Anthony Conway to testify along with other postal stakeholder leaders.

    Chairman Lynch intends to explore the impact of the current recession on the Postal Service, noting that the Service experienced a $2.8 billion loss last year and projects a loss of at least $6 billion in Fiscal Year 2009 which ends on September 30. Despite aggressive cost cutting by the Postal Service, the losses continue to grow.

    Given this critical financial situation, the Subcommittee is interested in addressing the following questions: What are the hard choices and tradeoffs that need to be considered as mail volume declines significantly? What options should be considered to overcome barriers and facilitate the Postal Service in making significant progress in â¬Å"rightsizing its networks?â¬â How much cost does the Service need to take out of its network and operations to remain solvent and how will it be achieved? What impact, if any, will cuts have on service?

    Summer Sale Approved by Postal Board of Governors
    The Postal Service proposal to offer special discounted rates for Standard letters and flats from July 1 to September 30 was approved this week by the Postal Service Board of Governors. With this necessary approval completed, the proposal will now go to the Postal Regulatory Commission for review. The law provides up to 45 days for the Postal Regulatory Commission to complete its review.

    The Postal Accountability and Enhancement Act of 2006 provides the Postal Service substantial new pricing flexibility and the Summer Sale marks the first attempt to use that flexibility. For many years the Postal Service and the mailing community discussed a need for greater pricing flexibility that would create a win-win for the Service and its customers. Postmaster General Marvin Runyon began the rallying cry for greater pricing freedom in 1993, saying the Postal Service needed greater flexibility in managing People, Prices and Products. He spoke of pricing discounts in lean volume times and other strategies that were in common use throughout American business. Although it took thirteen years to achieve Mr. Runyonâ¬s goal, it came at a critical time for the Postal Service. With mail volumes plummeting downward and the mailing industry struggling, itâ¬s a great time for innovation.

    The Alliance supports this initiative and hopes it proves successful. But more importantly, we hope this marks the first of many creative pricing initiatives in the future. There is not much lead time on the Summer Sale initiative and questions about it remain, but itâ¬s a start. By engaging customers with this proposal, the Postal Service already has scored a win.

    Intelligent Mail Barcode Moves On Despite Concerns
    You could feel the tension in the Ben Franklin Room at Postal Service Headquarters during this weekâ¬s quarterly meeting of the Mailers Technical Advisory Committee. There are various technical issues creating tension, but none greater than the Intelligent Mail Barcode program.

    Senior Vice President Tom Day and Vice President Pritha Mehra provided an extensive and detailed presentation on the program and its progress, signaling the importance of keeping IMB implementation on schedule. Mr. Day explained that the Postal Service is working long hours to ensure that problems are addressed and, while issues remain, they are confident that the current implementation schedule can be met.

    Despite these assurances, significant concern remains among many respected industry representatives that donâ¬t normally raise red flags. These representatives are very concerned that a train wreck is coming, and the resulting damage could be significant. We hope the Postal Service is sensitive to the concerns expressed by these highly credible industry representatives. A bad start to an important initiative will set the whole program back at a critical time for all of us.