Wednesday, August 17, 2011

The Wolf Has Arrived: USPS Reaches the End of The Story

Over the past two decades, anyone claiming that computer technology or the web would have been accused of crying wolf.  Later today at MTAC, Postal Service CFO Corbett will present a new volume and revenue forecast that indicates that the wolf has arrived.

Two years ago, Boston Consulting Group forecast that total mail volume in 2020 would be 150 billion pieces.  Today, when the Postal services updated forecast is revealed the 2020 forecast will be at least 11 billion pieces fewer.  The new volume forecast will be worse than Boston Consulting Group's worse case scenario presented in 2010.

The culprit is declining expectations for First Class mail only slightly offset by marginal improvements in expected growth in Standard Mail.  The new forecast indicates that the Postal Service now expects First Class mail will be less than half of 2009 levels while Standard mail continues to experience very limited growth. 

The following chart illustrates the change in thinking in the new forecast and 2009 mail volume for the Postal Service's two largest products.


The forecast change drives the Postal Services recent legislative proposals on ending no-layoff clauses, raising limits on the proportion of part time employees and shifting benefit programs from OPM to the Postal Service. The forecast change also drives the network changes that management will introduce today at MTAC as well. More information will be posted on the Postal Services Postal Services current and future financial troubles

15 comments:

Anonymous said...

Just think. Without the prefunding nonsense, nobody would be talking about the USPS.

Anonymous said...

no kidding, without that pre funding act USPS would be in the black right now and no one would be saying a word

Anonymous said...

I thought that even with the removal of the pre funding the PO still would have lost 3 billion $. ?

Anonymous said...

"The culprit is declining expectations for First Class mail only slightly offset by marginal improvements in expected growth in First Class Mail."

Should this say marginal improvements in... stadard mail."
?

Anonymous said...

Truer words were never spoken, on both your counts. Glad to see some reasonable comments for a change rather than blatant ranting.

Anonymous said...

Come on you guys. Do you really think the post office would do the right thing with the pre-funding money if they had it? My guess is NOT. They would waste it like they have everything else. And anyone that has 10yrs or more with the post office knows that all the post office does and will continue to do is waste the money away on anything and everything that is a complete waste of time.

jack said...

Closing Saturday would save a few billion.

Anonymous said...

The volume drop should be expected based on how the postal service keeps telling businesses that 5 day delivery is a foregone conclusion. Smart businesses are shifting their products to other sources to get them delivered.

Anonymous said...

Sounds like the wolf is preparing to come in the back open door...postal workers will be laid off within the next year due to projected numbers for future mail level...pretty sneaky use of legislation by federal government,but they doing what needs to be done...end unionization of workers in fed/state sector...costs to much money

Anonymous said...

The "prefunding nonsense" has nothing to do with the decline in First-Class Mail and revised forecasts, which this article points out (despite the grammatical errors and typos). Return of even the high end estimates of the prefunding overpayments would help in the short term, no doubt, but it's wrong to think everything will be fine in the long term. It's also not a right-wing conspiracy as the Save The PO "professor" tries to imply. Neither right- nor left-wingers are sending First-Class Mail, and that's the rub.

Anonymous said...

Good thing I have 38+yrs in, just waiting for the cash incentive to leave. I have already called for my retirement package. Can't wait to get out of this dysfunctional place.

Anonymous said...

The biggest problem that is not talked about is that there are too much management with too much downtime.

Anonymous said...

The truth that is not talked about much is that there is too much management with too much downtime.

Anonymous said...

cant wait for you old timers to leave, ya know the ones who have helped destroy this place.

Anonymous said...

Anonymous @8:02, we old timers couldn't care less about you young whiners and ranters. Start looking for another job now because you think the PO is going to last until YOUR retirement, you are crazy! And don't count on moving up the seniority ladder because we're hanging around until the bitter end, then we're retiring! HAHAHAHAHA