In The Mail: What You Need to Know About Postal Issues
July brings a mixed bag of postal/mailing news, from The White House supporting the idea of privatizing the USPS to the Postal Service gaining approval for internal performance audits, CAPS yielding to EPS, STOP on its way to becoming law.
White House Backs Privatization. The Trump Administration is recommending privatization of the U.S. Postal Service and it is likely that the report the President’s Postal Service Taskforce will issue August 10 will suggest steps toward that goal, based on the Administration’s comprehensive report to reform the federal government, called Delivering Government Solutions in the 21st Century. Legislative action would be needed to make changes of the scope the White House is recommending.
According to the report, putting the Postal Service in private hands would lower its cost structure, enable it to adapt to changes in customer needs, and ensure it can make business decisions without political interference. Another plus is that it would have access to private capital markets for capital improvements.
The White House acknowledges transforming the USPS to private ownership would be challenging. It notes that other posts around the globe have successfully privatized when profitable at the time of the transition. “To reach profitability, most international postal operations have gone through significant restructuring, including shrinking their physical and personnel footprints. In some cases, foreign governments have had to absorb legacy retirement liabilities in order to prepare a postal operator for sale,” the Administration stated. CAPS Yielding to EPS. Mailers are being encouraged to migrate as quickly as possible to the Enterprise Payment System (EPS)—the new U.S. Postal Service payment processing platform. Effective September 1, 2018, new payment accounts must be established through EPS. And, effective April 1, 2019, eligible Centralized Account Processing System (CAPS) accounts must be migrated to EPS, which supports multiple payment options, including mobile check deposit, and enables customers to manage multiple USPS business functions through a single account.
Eligible products and services include First-Class Mail, Letters, Cards, and Flats; Priority Mail; First-Class Package Service; USPS Marketing Mail, Letters, Flats, and Parcels; Parcel Select; Media Mail; Library Mail; Bound Printed Matter; Periodicals; International Products; Business Reply Mail; Every Door Direct Mail, submitted via hard copy; eDoc (Mail.dat/Mail.XML); Postal Wizard; Intelligent Mail small business tool; PO Box; Caller & Reserve Services; and Address Quality Products (AEC, AECII and ACS).
Customers can continue to use CAPS for products and services that are not yet supported in EPS, such as Electronic Verification System, Parcel Return Service, PC Postage, Scan Based Payment, Merchandise Return Service, Official Mail Accounting System, Premium Forwarding Service Commercial, Share Mail, and Intelligent Mail Barcode Accounting. Learn more at https://postalpro.usps.com/eps. House Approves STOP Act. In an effort to curb the opioid epidemic, Sen. Rob Portman, R-OH, is pushing for swift Senate action on legislation to make it harder to ship fentanyl (synthetic opioids) through the U.S. Mail. The House passed the bill June 14 by a vote of 353-52.
Under the Securing the International Mail Against Opioids (STOP) Act—H.R. 5788—by 2021, the U.S. Postal Service must follow the same procedures private shipping companies such as FedEx and UPS must adhere to by transmitting advanced electronic data (AED) on all international packages to U.S. Customs and Border Protection. The USPS currently collects this data on about 40% of inbound international packages and must increase that to 70% by the end of the year if the bill is enacted.
According to the House sponsor, Mike Bishop (R-MI), the legislation requires the USPS to refuse shipments for which AED is not furnished and also directs the State Department to strengthen international postal agreements and to ensure that any future agreements preserve the United States’ ability to require AED on all international mail shipments.
Planning to Boost Capital Spending. The USPS plans big increases in capital spending over the next decade, with initiatives that include upgrading its aging vehicle fleet and investing in more information security and resources. The USPS projects average annual capital spending cash outlays of $2.4 billion for fiscal years (FYs) 2018–2028, compared to an average of $1.4 billion for FYs 2007–2017. Planned capital spending includes an annual average of about $821 million for vehicles, with a total of about $5.7 billion across a number of years; about $541 million for information technology and other capital projects; about $607 million for facility repair or construction for FYs 2018–2028; and about $464 million for maintaining or replacing existing aging mail-processing equipment for FYs 2018–2028.
These plans were outlined in a recent Government Accountability Office (GAO) report, Projected Capital Spending and Processes for Addressing Uncertainties and Risks.
PRC Approves Internal Measurement. The Postal Regulatory Commission (PRC) has approved an internal service performance measurement system, but on the condition that the U.S. Postal Service continues to use an independent third party to audit the system (Order Approving Use of Internal Measurement Systems). The U.S. Postal Service Office of Inspector General, Government Accountability Office, and PRC itself would also provide independent reviews of the system, the PRC stated.
The PRC approved the replacement for the legacy External First-Class (EXFC) measurement system for First-Class Mail single-piece and flats after finding that the internal system can be objective, report accurate, reliable, and representative data, and provide this data in a manner required by the PRC. The PRC found that the new system is at least as accurate as the old system and is becoming increasingly reliable. It could not determine whether the change was cost effective, but this finding was not critical for approval.
The EXFC measurement, operated by an independent third party that seeds mailings, is an end-to-end measurement system based on statistical sampling, which measures the transit time of sample mailpieces from induction into the postal system to final delivery. The new internal system measures live mail entered by actual customers, and measures performance at three stages: First Mile, Processing Duration, and Last Mile. All measurements are made by postal employees rather than an independent third party.
Dynamic Route Optimization Advances. Work to cut highway contract route (HCR) miles out of the system through a dynamic approach to transportation has eliminated 3,068,517 miles so far. The USPS saves about $2 for every mile it eliminates. USPS Chief Operating Officer David Williams said the Dynamic Route Optimization (DRO) pilot in place at 15 HCR sites across the country has led to a 37% maximum mileage reduction per week. The U.S. Postal Service wants to roll the program out to all sites by the end of 2019 and would like to see annual savings of 50 million miles. With DRO, the USPS adjusts routes in response to mail volume, rather than static routes that run every day with the same frequency.
IV Roadmap Outlined. The Postal Service says there are more than 2,655 users of Informed Visibility (IV) tracking and reporting, which was introduced last fall, and a number of improvements are proposed. Users will soon be able to have near real-time visibility using a mobile phone, and postal officials are looking to merge Informed Delivery reports into IV, making it a central repository. The USPS said it is moving to an expected delivery day (last day of service standard) feed in the IV data but would also like to offer data in a way that users can have a predictive delivery day, one that incorporates factors such as weather, clearance times, volume, and mail flow.
10.11 Million and Counting. The Postal Service’s Informed Delivery (ID) platform is picking up steam with more than 10.11 million users, including 8.74 million households and 5.46 million email users. A USPS executive said that there have been 2,673 individual ID campaigns, enjoying a 67% open rate, while ID has been used by 574 different brands. Enhancements rolling out this year include personalized campaigns, package campaigns, and the ability of consumers to use ID through a single email address for multiple residences, such as primary residence and vacation home.
The USPS projects average annual capital spending cash outlays of $2.4 billion for fiscal years (FYs) 2018–2028, compared to an average of $1.4 billion for FYs 2007–2017.