Tuesday, August 26, 2008

$2 Billion Confirmation and Other Odds and Ends

1) Today, the Associated Press reported that Postmaster General Jack Potter told the National Association of Postmasters that the Postal Service will lose 2 billion this year. The readers of this blog knew that was going to happen two weeks ago. Now the question is: how long will it take for the Postal Service to clearly lay out its challenges in FY2009?

2) One of the Comments to this blog suggested that the Postal Service could generate more revenue by reducing its automation discounts. As has been said on this blog before, the drop in single piece volume increases available capacity for originating mail sortation. This capacity could be used for a new product that does just that. Such a product would require only clean, trayed, metered or permit mail and would compete with presorters but would not affect the efforts of mailers that can sort and place barcodes on mail pieces during the printing process. As producers of large volumes of bills and statements are both generally able to print barcodes and sort mail during printing of mail pieces and are tempted to encourage their recipients to switch to electronic delivery, any change in their discount would have to be thought through carefully to avoid losing more revenue from volume declines than is gained from the lower discount.

3) Over the past two months, the British Press has reported a potential UPS-TNT merger twice, and a FedEx-TNT merger once. These reports have resulted in TNT stock jumping on the Friday of the report and declining on Monday when the date of the supposed merger annoucement passes without an anouncement. One starts to wonder when investors will become spooked by a business that cries wolf and misses the "real" merger story when it comes along.

4) Please keep the comments coming. I read them all and will post anything that is not offensive or defamatory. I would appreciate comments in this blog reacting to what I say, especially if you can provide information on operating or marketing changes that relate to the post and provide information that other readers may want to have. To the extent that we can develop a dialog here, I think the entire courier, express, and postal community will benefit. Different points of view are appreciated including alternative ways of interpreting the data underlying in articles that I cite. Also, I would like you to include in your comments suggestions about topics that interest you that may need more focus in my research and observations.


Anonymous said...

The USPS has reached usefullness as a business and must return to a service for communication for all american citizens.Major changes may have to take place, such as three day delivery of many routes, self management of all routes much like the rural routes of old. Time restraints reduced for many classes of mail. The usps is headed in the wrong direction.

Anonymous said...

In my honest opinion, a failing business does not give 39% raises to all of it's VP's. I think the Postal Service is just trying to cover it's a**. They screwed the Rural Carriers during the last mail count big, and the grievance has been filed. It would mean more money lost than the last grievance that was won for manipulating a mail count. The only problem is that all this poor me PR is going to come back and bite them. I saw where the stock market has picked up on it and UPS, and Fed Ex will be suffering for it.