Postmaster General John Potter gave his annual state of the business address at the National PCC Day event in Portland, OR, on September 15th. While the Postal Service™ cut spending by $6 billion in 2009, it is estimated that if current practices and procedures remain in place, that the USPS® will suffer a net loss of $7.0 billion in 2011. As we know, these economic concerns have led to the filing of an exigent rate case which, if approved, will increase postal rates across the board. Potter outlined further steps that the Postal Service would like to take in order to continue to cut costs, increase revenue, and improve offerings and customer satisfaction. Here are a few takeaways from Potter’s address:
The USPS® is implementing a number of strategies to increase customer value and drive revenue. Some of these strategies are:
- The recent campaign focusing on how simple and affordable shipping becomes when the USPS’s flat rate boxes are used
- The initiation of Summer and Saturation Mail incentive programs, which provide great discounts that make direct mail more affordable to marketers on a tight budget
- The implementation of a new customer experience measurement system that evaluates every aspect of the postal customer’s experience, which will allow the USPS to determine specific areas that need improvement
The USPS is also seeking legislation in three key areas. If passed, these changes will give them greater flexibility that will allow them to make changes that will cut costs and increase revenue:
- Ease the pressure that is placed on the Postal Service in regard to pre-retiree health fund payment schedule, which currently requires payments of over $5 billion annually. Once pressure to fund the program is removed, the USPS can concentrate on long-term steps that can be taken to cut costs.
- Allow the Postal Service to make changes in response to decreased demand for postal. The decrease in demand at present makes eliminating Saturday delivery very feasible, which would save almost $3.5 billion a year.
- Unlike other government agencies, the USPS relies completely on the sale of its products and services in order to fund its operations. In that light, the Postal Service must be given the opportunity to expand its product offerings. The opportunities in this area are significant, due to the USPS’s reach, presence, transportation capabilities, and more.
It looks like some exciting changes are ahead in the postal industries. We are monitoring the progress of these initiatives, so keep watching the blog for updates.