More Information on Trademarks

Here are some links to news stories using some of the new trademarks.

Authentidate, Inc. Signs Strategic Agreement With U.S. Postal Service to Provide Electronic Postmark Service http://www.uspsepm.com/info/pr/agreement-postal-provide-epm.html

Wikipedia has more information:
http://en.wikipedia.org/wiki/Digital_Postmarks

Office Depot is the first national retailer to offer mailing and shipping options for consumers as an Approved Postal Provider — an initiative between the Postal Service and business partners to offer USPS products or services at vendors’ locations.
http://www.postalnewsblog.com/category/office-depot/

In Sacramento there are over 100 Approved Postal Provider locations in the 958 ZIP Code.
http://www.usps.com/communications/newsroom/localnews/ca/2011/ca_2011_0602e.htm

Postal Service Initiates ePacket Service with Hongkong Post
http://www.usps.com/communications/newsroom/2011/pr11_037.htm

Parcel Select Lightweight is a new subcategory within the existing competitive Parcel Select Product category.
http://www.santabarbarapackandpost.com/article/102-post-office-wins-approval-to-raise-parcel-prices

Businessweek Fires the Postal Service

Last week, Businessweek told many of its Washington DC customers that the Postal Service will no longer deliver the magazine.  Instead, the weekly magazine will use the Washington Post's delivery service to deliver the magazine early on Friday morning at the same time that it delivers newspapers.

In an interview, Bernie Schraml stated that Washington DC is the fourth market that Businessweek has turned to alternative delivery.  It started the shift in Philadelphia in December, 2010; followed by San Francisco in February, 2011 and Boston, MA in June, 2011.

Combined, alternative delivery now represents 10% of Businessweek's 850,000 subscribers. This shifts 4.42 million magazines from the mailstream annually.

Currently, Businessweek is negotiating with delivery firms in four additional markets which it hopes to bring on-line by the end of the year.   Mr. Schraml indicated that Businessweek is looking for distribution partners in other cities to expand the use of alternative delivery beyond the eight markets already in operation or under negotiation.  

Mr. Schraml indicated that the delivery company in two of the markets is The Washington Post and the Philadelphia Inquirer.  Businessweek is delivered by the newspaper delivery network early on Friday morning at the same time that the Friday paper is delivered.  The magazine arrives at the recipient's address in the same manner as the daily newspaper.

While alternative delivery has shifted subscriptions from the mailstream in four markets, not all subscribers in these markets receive their Businessweek via alternative delivery.   The contracts with delivery firms specify the 5-digit zip codes that the delivery firm delivers to, and in some cases the portion the portion of the 5-digit zip code that it serves.   All other recipients continue to receive their magazine by mail.   Even with the cherry-picking of delivery points, the alternative delivery firms have made a major shift in volume.  Mr. Schraml expects that contracts in other cities will be similar with the delivery firm delivering magazines to a significant portion of Businessweek's subscribers and the Postal Service delivering to only those subscribers that alternative delivery firms cannot reach.

Mr. Schraml indicated that the primary driver in shifting to alternative delivery is service.  In order for Businessweek to compete with the Wall Street Journal's Saturday edition, Barron's, and the Sunday New York Times as well as its own and competitor's web-based content, it needed to arrive on the same day or before these competitors arrived.  Therefore, Businessweek requires delivery on Friday or Saturday with as late a drop-off time as possible.  In cities where Businessweek has begun alternative delivery, Mr. Schraml stated that delivery quality was better than both Postal Service standards and his experience with Postal Service delivery.   The newspaper delivery networks have delivered 100% of its issues on Friday morning.  With the Postal Service, only 30-35% arrived on Friday and no more than 69% were delivered by Saturday.

The alternative delivery networks also offered Businessweek greater flexibility as their critical entry times were no earlier than late afternoon Thursday, and in one city, Friday delivery could be made with entry as late as just before midnight the night before.  Critical entry times for the Postal Service are currently earlier than that of alternative delivery, and starting July 1, they will become even earlier putting the Postal Service at even a larger service disadvantage.   (See Dead Tree Edition)  The potential loss of Saturday delivery creates further problem as that could push the share of magazines with entry into the mailstream on Thursday and delivered before the weekend below 50%.  (For Businessweek and other publications that need late critical entry times due to competitive concerns, earlier critical entry times and the loss of Saturday delivery could make their print product noncompetitive.)

Businessweek's focus on service as the primary motivator for alternative delivery is different from the driver of alternative delivery over two decades ago.  The larger periodical publishers created a nationwide alternative delivery network in 1990 called Publishers Express with a goal of delivering periodicals at a lower cost than the Postal Service. (Pittsburgh Press, Pittsburgh, Pennsylvania) October 29, 1990, pages B5, B7)  Publishers Express acted as a middleman between the publishers and printers and the local delivery firms in both large and small metropolitan areas. This alternative delivery network went out of business in 1996 (Lawrence Journal World, Lawrence, Kansas, February 28, 1996, p. 4D) as it met neither the profitability nor the service requirements that its publishers/owners demanded as well as efforts of the Postal Service to counter the competitive threat.

When asked about price, Mr. Schraml indicated that the total cost of alternative delivery was competitive or less but he did not provide specific cost information.  

He did indicate that alternative delivery had lower preparation costs for Businessweek as addresses were not printed on the magazine, magazines did not have to be combined in bundles to reflect presort requirements and magazines could be loaded on full pallets for alternative delivery as opposed to partial pallets for the Postal Service.  The difference in pallet size reflect the presort requirements of the Postal Service.   The difference in mail preparation and palletization lowers Businessweek's printing and transportation costs.  

Mr. Schraml indicated that he is interested in talking to other publishers about his experience and potential delivery firms about delivering Businessweek in other markets.  Given the speed that he has moved so far to shift subscribers to alternative delivery,  he should be able to shift well over half of his subscribers to alternative delivery within a year.  

Impact on the Postal Service

For a commentary on the impact on the Postal Service see:

The Death Spiral Could It Be Driven By Service As Well As Costs

What do USPS Trademark Applications Tell About the Future?

Trademarks are used in advertising and marketing.  Followers of companies known for their marketing prowess follow these applications to get hints of new products.  The following is a list of trademark applications that the Postal Service has filed with the United States Office of Patents and Trademarks since February 2011.  Please comment on what you think this means for the Postal Service.  I have put in bold those that sound new to me.

1. 85345599                PRIORITY MAIL RETURNS              
2. 85345584                USPS RETURNS           
3. 85069794                US POSTAGE PAID        
4. 85121633                WE'RE EVERYWHERE SO YOU CAN BE ANYWHERE
5. 85322722                USPS BLUE EARTH        
6. 85252023                POSTAL REGIONAL GROUND         
7. 85300712                EVERYWHERE I AM        
8. 85172124                SEE IF IT FITS!        
9. 85288878                COMMERCIAL FIRST-CLASS PACKAGE SERVICE         
10. 85281028                EVERY DOOR DIRECT MAIL - RETAIL        
11. 85312926                APPROVED POSTAL PROVIDER               
12. 85308333                UNITED STATES POSTAL SERVICE U.S.MAIL          
13. 85316561                PRIORITY MAIL REGIONAL RATE            
14. 85315681                YOUR OTHER ADDRESS             
15. 85314052                PRIORITY MAIL OPEN AND DISTRIBUTE              
16. 85302130                POST OFFICE IN YOUR HOME AND IN YOUR HAND      
17. 85281070                EVERY DOOR DIRECT MAIL - BMEU          
18. 85279781                IT'S TIME TO RETHINK YOUR SHIPPING             
19. 85034221                CRITICAL MAIL          
20. 85304523                APPROVED POSTAL PROVIDER               
21. 85322757                ELECTRONIC POSTMARK            
22. 85322745                USPS ELECTRONIC POSTMARK               
23. 85322733                UNITED STATES POSTAL SERVICE ELECTRONIC POSTMARK               
24. 85155718                PRIORITY MAIL FLAT RATE        
25. 85092549                PUTTING OUR STAMP ON A GREENER TOMORROW
26. 85091695                PARCEL SELECT LIGHTWEIGHT              
27. 85091723                POSTMARK AMERICA PASSPORT              
28. 85269692                DE RING IN NEW WAYS            
29. 85251941                DE RING TRUST          
30. 85251730                EVERY DOOR DIRECT MAIL         
31. 85253319                SAMPLING THROUGH THE POSTAL SERVICE            
32. 85211936                USPS EPACKET           
33. 85211923                EPACKET        
34. 85204859                SECURITY: IT COMES WITH THE STAMP              
35. 85203928                REPLY RIDES FREE
36. 85203651                PARCEL SELECT REGIONAL GROUND          

So what new products does the list suggests may be coming?

1. Priority Mail Returns - how does this compare to Priority Mail and other return services that involve private sector firms? 
2. Approved Postal Provider -  This sounds like a name that will be used on signs and other marketing material relating to non-USPS locations selling postal services
3. Parcel Select Lightweight - This sounds like a re-branding of Standard Commercial parcels.
4. USPS Electronic Postmark and United States Postal Service Electronic Postmark - Is this a product in development?
5. USPS Epacket and Epacket - It is unclear what product these terms could be associated with.

Canada Post Strike - Impact Just as Projected

A Sun News story today confirmed the projections made in this blog over the past two weeks about the impact of the Canada Post strike.   The strike has shifted volume from Canada Post to competitors and has negatively affected the Canadian economy.  

Now here are the relevant quotes from the Sun News article:

Losses of Mail Volume

To Purolator:
Purolator even had several battle plans in place to handle the surge in customers that comes with a work stoppage.

"We considered an alternative in case orders increased even by 20%," said Roch. "The challenge for our logistics team is to make the process flexible enough to accommodate new customers without affecting the quality of our current service. So far it's working."

To Expedibus:
Expedibus uses passenger buses to deliver mail between terminals at low cost. It usually books up to 50,000 packages a month in different cities, but volume has doubled recently.

To United Parcel Service:
UPS has warned customers against flooding its network with mail.

"Since we cannot absorb all of (Canada Post's) intra-Canada volume, we will be limiting existing customers to a 10% increase in their normal daily volume," UPS said on its Canadian website.

To Electronic Delivery:
Irwin Kramer, president of the e-commerce firm iCongo, says the company's now using online solutions for its payable and receivable accounts.

"We no longer receive cheques from our customers and cannot pay our suppliers," he said. "Canada Post is not reliable."

Impact on the Canadian Economy and e-commerce
Sun news further reports Amazon and Chapters switch carriers resulting in delays in shipping.  This also more than likely increased shipping costs and either higher prices to cover more expensive
shipping or lower profits.

CNW reports that the Union Gospel Mission faces concerns about loss of contributions as 87% of contributions are made by mail

The Toronto Star reports that Beekeepers face challenges ensuring a strong honey harvest as well as pollination of fruits and vegetables if the strike continues as there are few alternatives for shipping live bees.

MSNBC is reporting that PinkCherry Adult Toys, an adult novelty firm is absorbing $1,000 a day in increased shipping costs so that it can maintain its free shipping policy due to the need to switch delivery carriers from Canada Post. 

These are just a small example of the economic impact of the strike and represent only those examples reported in on-line news services.   Clearly calls to other e-tailers, charities, and businesses would identify other instances of  increased shipping charges reducing profits of Canadian e-tailers and raising costs of Canadian consumers; slower contribution receipt to charities results in reductions in services provided by these organizations; and  slower delivery of bills and payments creating cash flow problems for Canadian businesses and households.    These impacts illustrate that while it is easy to say that Canada Post is obsolete, all it takes is a shutdown for a few days show how essential it still is.

Previous Posts:

Impact of the CPC Strike on the Canadian Economy

Canada Post Strike a Lose-Lose Proposition for CUPW

Household Formation Slowing: Good or Bad News for USPS?

In a recently released blog post, Mark Doms, Chief Economist, U.S. Department of Commerce commented on the increasing gap between population growth and household formation.   He notes that " though the slowdown in household formation coincided with the recession, as the economic recovery began and strengthened last year, household formation has yet to pick up."  Increased household formation results an increase in the number of delivery points and operating costs. 

A slowdown in household formation relative to the adult population results in more mail delivered per stop as each stop represents a slightly larger number of adults.   This trend should help the Postal Service as it reduces pressure to expand its delivery resources.

While pressure on delivery resources may be reduced, the continuing disconnect between household formation and population growth indicates economic strains that is bad for mail volume.   New household formation generate a significant amount of mail associated with utility, mortgage, and advertising that would not be sent if the person lived in a home/apartment already occupied by others.   Slower household formation may also reflect the economic challenges of individuals who are choosing not to establish separate households.   To the extent that mail volume is driven by advertising to individuals capable of buying, lower household formation suggests that the number of potential customers of advertisers may not be growing as fast as the adult population.

Going forward, even if employment levels improve over the next few years, there is little evidence that compensation levels will grow rapidly enough to reverse the trend of slower household formation.  In addition, the reversal of easy lending practices for first-time home buyers, will further slow household formation as individuals and couples save the 20% than many lenders are requiring for a down payment.   

The Postal Service and mailers have to follow this trend carefully to see if continues or reverts back to the pattern of the late 20th Century and early part of the last decade.   The Postal Service needs to look at how this trend affects the forecasts of the Boston Consulting Group and McKinnsey.   Mailers need to look at what they must do differently to ensure the effectiveness of their mailings that are sent to multi-adult households, and in particular multi-adult households that include children who live at home following graduation from high school or college.

Could Canada Post Just Stay Shuttered?

Canada Post announced today that it is halting mail delivery nationwide.  In a statement, Canada Post spokesman Jon Hamilton  stated "If we allow the uncertainty created by the rotating strikes to continue - and we've seen customers walking away from Canada Post - our ability to remain financially self-sufficient and not become a burden on taxpayers certainly is going to be in jeopardy."

The lockout by Canada Post is designed to put pressure on CUPW to modify its demands to the point that the the two sides can agree on a contract.   But what happens if there is no movement toward an agreement and the Harper Government does not force an agreement?

There are numerous examples in the private sector of similar impasses.   More importantly, the examples of similar impasses in industries facing declining demand due to technological or competitive factors clearly show that the longer the impasse lasts, the worse the prospects for the company and employees involved.   The best example is Bethlehem Steel, which shuttered during a similar impasse in union-company negotiations.   Similar stories exist in the U.S. textile, rubber and steel industries.  

There is a possible out for both sides but it may require Parliamentary action.   The out adds employee stock ownership as a way to bridge the differences,   Giving employees a share of Canada Post's success and profits may not be a panacea but it gives employees a share in the benefits that the Canada Post's proposed contract changes are expected to produce.  Delivery of print communications and consumer delivery of parcels will continue to have a role in the Canadian economy for decades to come and employee shares in that enterprise could generate real divends and capital gains.  Given the intractable nature of the impasse, and the propect of a much smaller Canada Post without a quick settlement, maybe its time for a solution that is not even on the table.

On-line Sales Share of Retail Sales Hits New High

The U.S. Census Bureau retail sales data released today showed that in April, the share of retail sales that are sold on-line or via a catalog rose to 20.3% of retail sales from merchants selling products that are sold both in brick and mortar stores, on-line or through a catalog.  This means that 20.3% of all retail sales that could be delivered by FedEx, United Parcel Service or the United States Postal Service, are being delivered by these firms. (Details on how the proportion is calculated is at the bottom of this post.)

April represents the fifth month in a row that on-line/catalog merchant sales were more than 20% of sales of items that could be delivered to a consumer were delivered to the consumer rather than purchased at a retail store  A year ago 18.5% of sales of items that could be delivered to a consumer were delivered.  The following chart shows retail sales data dating back to 1992 as provided by the Census Bureau.  

The chart also includes an exponential trend, and for the statistical geeks, the trend equation and R-squared.   The trend line illustrates that the shift to on-line retailing has grown exponentially since data was available with deviations occurring only around the two recessions in the period graphed.

The shift to retail sales from on-line and catalog merchants  may partially explain the decisions of American Eagle, Gap, Lowe's and other brick and mortar retailers to close stores or stop expansion as the total dollar sales at brick and mortar outlets stagnates as on-line and catalog sales grow.  

The Courier, Express and Postal Observer will post the proportion of deliverable retail sales on a monthly basis going forward. 

Explanation of Chart Data

The proportion illustrate in the chart represents the proportion of catalog and on-line sales estimated by the Census Bureau as a portion of sales at furniture & home furnishings (442), electronics & appliances (443), clothing & accessories (448), sporting goods, hobby, book, and music (451), general merchandise (452), office supply, stationery, and gift stores (4532) stores as well as on-line and catalog merchants (4541). [The numbers in parentheses are the NAICS codes used by the Census Bureau to classify businesses.]

As many retailers, (i.e., Walmart, JCPenney, Target, Best Buy, Limited Brands (Victoria's Secret, Bath and Body Works) and Best Buy) that currently generate most of their sales from brick and mortar outlets now generate a growing but small proportion of their total sales from their websites, this proportion represents a conservative estimate of the share of deliverable retail sales that FedEx, United Parcel Service or the United States Postal Service are delivering.