Links to the resources mentioned in the podcast.
Chris: Hi, this is Chris Lien.
Anita: And I'm Anita Pursley. Welcome to Industry Corner, a podcast where we share postal industry news to help you stay informed.
Chris: On today's podcast we talk about the latest from the Mailers' Technical Advisory Committee, the National Postal Policy Council and some changes at USPS leadership. So let's get into it.
Chris: Hi, welcome to the podcast. Hi, Anita?
Anita: Hi Chris. Good morning. How are you?
Chris: Good morning. I'm well thank you. Another exciting day here in Rochester. We actually are starting to see the sun. Absolutely. It's incredible. We uh, we do warm up every once in a while, so it's, it's welcomed here in Rochester and a lot of activities always in the mailing industry. Last week was the Mailers' Technical Advisory Committee meetings, right. In Washington DC. There was also a National Postal Policy Council meeting as well that you attended. And then some changes in postal leadership, but why don't we start with our listeners here with MTAC, that Mailers' Technical Advisory Committee meeting. And I know you were very involved in some of the discussions there Anita. Unfortunately folks, my flight was canceled and I wasn't able to make it. But Anita, you attended a lot of the sessions.
Anita: Right, and it was unfortunate because the national postal policy committee meeting was on Tuesday of MTAC. They had already set their annual calendar beforehand, tech, and that does happen. So I was disappointed you weren't there, but I, I'm so happy I attended the NPPC. But yeah, let's start out with MTAC Looking at the highlights, I think everybody would probably really be interested in what's going on with task team 27 so do you want to just share the Advanced Federal Register Notice?
Chris: Yeah, It was the advanced federal register notice. So for our listeners, this was something very controversial and as you recall, I think we talked about this in a prior podcast, the postal service put out an advanced federal register notice that was alerting the industry that they were going to look at clarifying the definition of marketing mail. And it really was born out of the situation whereby some mailers were using marketing mail as a means to fulfill products. And that's not the intent, the intent of marketing mail really all along or or standard mail, uh, you know, prior to that was to be able to use mail as a promotion vehicle as a way to be able to connect and relate to customers or prospects and not necessarily for fulfillment. Right? There's other services at the postal service offers or products as they call them to do that. Well the definition of the intention was to limit it only to paper and and that it is problematic in and of itself because there are things that are absolutely indeed marketing mail that are not necessarily paper and as much as I love paper. It's a renewable resource but that does present a challenge. And so the industry responded quite soundly with over 4,700 comments. And what we did is MTAC formed a task team just to be able to go through all of these comments, many of which were done or generated in sort of a form letter type approach.
Anita: But still the quantity itself was very resounding.
Chris: Absolutely. And you know, in a lot of ways the postal service, I don't think they intended this but, but what came out of that, the response from the industry is some really good information about how people use marketing mail or what their intention is to use marketing mail. So the idea here was to form a task team, just to sort of categorize the different responses and then maybe form a work group that would allow the industry to be able to go more thoughtfully through each one of the different applications of marketing mail so that we make sure that we continue to have value in the mail and maybe grow that value with multichannel and Omni channel marketing capabilities.
Anita: Right. So we got an update and a Rose Flanagan did a great job of describing what the test team has done. She's from data mail and she chaired the task team and they had a real good cross section of mailers representing all classes of mail and, and specifically nonprofits cause they're the ones that were most impacted. But they, I think she described it as trying to walk people off the ledge. So, in other words, eliminate, you know, the ones that really aren't in the scope of the postal service's federal register notice. So plastic promotional materials, pretty much, you know, plastic cards, gift cards, loyalty cards, things like that are going to be just fine. And then any premium that supports a marketing message, coins and tokens and you know, things of that nature. So, um, those are not within the scope of the Federal Register notice. So, but then, you know, Leo Raymond asked the question that was on everybody's mind is why is it a functional purpose of why you are mailing? It has no bearing on whether it's machinable or not. And of course, Tom Foti gave a really good answer because he said that when a consumer requests or purchases an item, there's an expectation of tracking or at least knowing when to anticipate that delivery. And that is a service that is not being offered in marketing mail flats. But this is something I learned and that is that marketing mail parcels already limits the content. Did you know that?
Chris: I, I knew that there was some language and I'm not as well versed in that particular area, but I knew that there was some language back that got into some of the specificity with it. But, but I couldn't, I couldn't quote, you know, all that part of it.
Anita: But anyways, so postal service is planning to look at this is a beauty of informed visibility. They're going to look at e doc and compare them to scans so that if they see that some mailing is claiming automation rates in flats, right. But it gets no scans then obviously that's a problematic mailpiece. So that's one of the things that they're going to do. So they came out with a draft report of what kind of the definition of fulfillment and what are the acceptable products and then they're going to come out with, well I think it's being reviewed right now by the task team members and also by the association executives. And I think they've distributed it out to the industry. So what's going to happen next is we anticipate an industry alert that's going to limit the scope and then as you said, they're going to start either a work group or a task team. And my recommendation was a work group cause I think if they form a task team, I think the postal service is going to be um, I think people are going to accuse them of picking favorites.
Chris: That's exactly it, Anita, there are two problems that I have with it as a task team that's one, the optics of that make it look like the postal service is purposely allowing just those individuals on a task team because it's hand selected and so it would give the wrong optics with it. The postal service, I believe, truly does want to hear from a broader section of the marketplace and that is the other reason why I think a task team is a bad idea because it doesn't open up the ability for the broader conversation that a workgroup has.
Anita: And those that have walked off the ledge won't participate in a workgroup. I think it's only the ones that are going to be effected or fear that they're affected. So anyway, a couple of other things. Um, seamless. Of course we're still expecting an advanced federal register notice out of Mark McCreary's office. But just a couple of surprising statistics, although 42% of mail is now on seamless, only 5% of flats are. So anyway, we'll see this federal register notice and I think they're going to get a lot of comments. I think I mentioned before that Idealliance and PostCom have a committee that are looking at what are all the obstacles, but someone asked the question, you know, so what happens if I don't go to seamless? And it was like, okay, well you can bring your mail to the bulk mail acceptance unit. And honestly the postal service doesn't want that. So it's going to be a rough road ahead.
Chris: It is. What I really hope, and I know Mark has always done a great job at this in the past, is sorta dispel the myths or the Boogie man or whatever, you know, relative to these things. I think there's a lot of concerns around seamless acceptance because you hear things like once you're in, you can't get out. It's like the hotel California of mail acceptance, but there are a lot of advantages with seamless acceptance and for those mailers that I know that, that our customers of BCC Software that that are in seamless acceptance, they'd like it.
Anita: And it's mostly letter mailers.
Chris: It is. So I hope that in that notice as Mark and the team are putting the language together on that, I hope that they dispel some of the fears and give a little bit of comfort to the industry, particularly with flat mail knowing that, look, this is, it's going to be okay and we'd much rather have you in seamless acceptance so that you're judged on a trailing time period, rolling time period. Rather than on this scorecard once each time.
Anita: All right. The other hot topic was the enterprise payment system. Did. Did you read the article in the Alliance of nonprofit mailers bulletin? It was a pretty scathing article. I think it was titled, um, Postal Service loses sight of who the customer is. And it was pretty fair. I mean he went into what is the definition of enterprise, and I think he said it was a project or undertaking that is especially difficult, complicated or risky, but he pointed out that banks and billers constantly update their software and web pages that's invisible to the customer. So now the postal service is making people convert from a cap system, which they're comfortable with to the enterprise payment system. But here's a couple of more statistics. I'm all into the statistics according to Angela Dire at the Great Lakes Area Meeting in it, and I'm sure this was probably brought up at MTAC also, but only 38% of the permits have migrated. Okay. So that's, I think that's startling and concerning, but that probably also includes mailers that mail ineligible products. But it's important for our listeners to understand that if they can't make the April 1st date, they've got to apply for an exception. And the exception form is on postal pro. I think by the time this recording airs, the application date already be past because you have to apply by March 15th and here's where I think it just gets a little too picky. You know, you can only get a three month extension. I know that they're going to work with mailers but here we go, another difficult transition.
Chris: Well, again, similar to the last comment, you know, hopefully that they can dispel some of the issues with that and then address it.
Anita: I think the last thing I want to say, and of course this is probably just great news for software vendors like ourselves, but, Jim Wilson announced the CASS Cycle O, he's pushing that back to August of 2021 so hopefully we'll see that in writing soon.
Chris: That is good news. I mean these are all things that we can do to enhance address quality prior to that. And in fact we do a lot of things to enhance address quality. So I support that. I think that makes sense and besides, it also gives us a little bit more time just to take a look and see, okay, so what else can we do that could be added into that CASS cycle so that it makes it more worthwhile to do it because so many questions without answers. It's a lot of time and effort to do that.
Anita: I know that was a real quick summary of MTAC and probably didn't hit all the highlights, but I really want to talk a little bit about the NPPC meeting. There were some really great speakers, the Postmaster General Robert Taub, the chairman of the postal regulatory commission, and then Sharon Owens. We haven't talked about the leadership changes. Sharon Owens is now moving over from pricing and costing to be the acting vice president of sales.
Chris: To me that was a surprise because Sharon's background finance, costing, I mean, and she's done a great job.
Anita: She's a math wizard.
Chris: Yes, exactly. So she does a great job. She's a very talented person. I had the pleasure of working with her at MTAC and the executive committee. So a lot of respect for Sharon and I'm sure she'll do well in sales, but that was just something I hadn't anticipated happening.
Anita: I think it's a good move for her professionally. Dennis Nicoski is retiring. And then Steve Phelps, he is going to be the acting vice president of pricing and costing. So right now he's the manager of pricing, so now he's going to be taking on costing as well. So big challenge, but I'm sure he'll do a really good job. Okay. Just have to mention this, that the postmaster general was awarded the Laurel Kamen Award, which is NPPC's highest honor. Do you remember Laurel Kamen? She was an executive with American Express. When she retired, she went to work as senior advisor to PMG potter and then unfortunately she succumbed to cancer in 2017 so Art Sackler and Mike Tate, who's the chairman of NPPC, conferred the award on Megan. So that was really a nice way to start out the meeting. Megan talked a little bit more at NPPC than she did at MTAC. She was really interested in hearing mailers, viewpoints on the promotions. She said there's an internal debate about the value and I can just see the governor's wanting to know about that. And someone in the audience mentioned that it's really slowing diversion particularly in first-class. And so I think she was happy to hear that. But then someone asked why is earned value only three months instead of six months? Like it was in 2017 and she deferred to Sharon Owens and Sharon said that when they had it for a six month period, volumes actually declined. And so she wants people to be focused on a three month period where they actually focus on growing the earned-value mail. So she was talking a little bit about being up on the hill. As you know, the postal service can't lobby but they can educate and that's really important. And right now she mentioned that there are 18 new members on the house oversight committee and five on the Senate. So imagine all those staffers that have to be up to speed on the postal service, but she's a little concerned that they'll get lost in all of the things that are going on on the hill, but interestingly enough March 12th there is a hearing on the presidential task force, so I'm hoping to watch that and then maybe we can talk about it on the next podcast.
Chris: I agree that would be useful as well as I understand that the administration put forth their budget for 2020 $4.7 trillion budget, but contained in that is some language about the postal service to as some things to hopefully set that on a financial improve path. I think it was like $45 million or maybe it's 45 billion, I get lost sometimes, but it's some kind of a path with a number of different recommendations. But that just recently came out. So I agree with you, Anita, maybe in a future podcast we'll kind of break down what comes out of that Senate hearing as well as what were some of the recommendations are the administration's budget proposal.
Anita: Yeah. You know, Robert Taub said that he was really pleased with the stance that the administration is taking. I mean, not all of the things in the report obviously, but he said that typically the postal service is dealt with benign neglect from the administrations. And the last time in administration took it interest in the postal service was back with Bush.
Chris: That was all part of the terrorist attack. Yeah. September 18th of 2001.
Anita: Ah, you are so good that way. But anyway, because of the ex parte rules, he couldn't talk a lot about the 10-year review, but there's something I think the listeners really need to know and that is that the president has issued an intent to nominate, which means, you know, starting the process of nominating somebody Ann Fisher who's currently the director of government relations at the PRC, great person. She spent 12 years on the hill working with the oversight committee. And um, so she is a Republican. So she would take the place of Tony Hammond, who's in his hold over year. And now what's concerning about that is that Tony was the one who dissented in the 10-year rate review. He's the one that we were all applauding because he didn't feel that the proposal that was put forth by the commission was the right thing to do. And I would suspect that the POTUS will nominate a Democrat as well to replace Nancy Langley to have a certain balance. So we'll see. But anyway, he couldn't talk about it as I said, but he did say they hoped to act this year.
Chris: Well that's encouraging, right? So some movement on the Senate on some postal conversations with the task team, I know that the House Oversight Committee has some history of getting things going. We'll look forward to that. And then certainly what's happening out of the administration with the proposed budget for 2020 and some of the suggestions from the president with that and possibly some confirmations. So a lot of activity folks that's coming up soon and you can be assured that Anita and I will follow that closely and we'll talk about it on the future podcasts. So anything else, Anita?
Anita: Oh gosh. I probably talked about half of the things I wanted to mention, but I think we're out of time and, and we'll just talk about it on the next podcast.
Chris: Sounds good. Thank you so much, Anita.
Anita: Thank you, Chris.
Chris: Thanks to our listeners. Thank you so much for tuning into the podcast today. We encourage you to please visit BCCsoftware.com or give us a phone call because as always, we want to know how can I help? Thank you and have a great day.