Transcript

Chris: 00:00 Hi, this is Chris Lien.

Anita: 00:01 And I'm Anita Pursley. Welcome to industry corner, a podcast where we share postal industry news to help you stay informed.

Chris: 00:11 On today's podcast we discuss the outcome of the UPU Congress and update from the PostCom meetings and recapping PCC week. So let's get into it. Welcome to the podcast. Hi Anita.

Anita: 00:26 Hey, Chris. How are you?

Chris: 00:27 I am doing great, thank you. It was a very busy week last week. We had PCC week and we were at the PRINT show right after that in Chicago. Let's start with PCC week, Anita, I know you were at a couple of different events, right?

Anita: 00:39 Right. I was first in Northern California. It was a great event, about 140 attendees. Greg Crabb was the keynote for the postal service and I did a presentation on women in the workplace.

Chris: 00:52 Oh, very nice.

Anita: 00:54 It was very fun. It was something I don't normally talk about, but I had a really good time with that and they were very receptive, so that was really nice. And then I crossed country and went to the Northeast Florida PCC. They had about 120 attendees and I kind of heard mumblings from other people that there weren't as many this year as last year, but last year they had Megan as their keynote…

Chris: 01:16 Postmaster General, right?

Anita: 01:16 Right, exactly. So Steve Monteith was the keynote and I did a presentation on marketing to millennials.

Chris: 01:23 Excellent. Yeah, for myself, I was in a familiar territory, the twin cities at the Midwest Mailers Forum at the Earl Brown Center in Brooklyn Park, which is where my family and I lived for like 15 years before moving to the beautiful Rochester, New York area and it was really nice to see some familiar faces and kind of be in familiar territory. We had about 150 attendees at ours. So a really good turnout. Just as you had talked about the other events you were at, I kicked off the day with the discussion of really just, you know, why direct mail still works and kinda touched on mail and millennials as well as recapping some of the household diary information. Tom Foti was our featured speaker for the lunch session and Tom did a great job with that. It's my understanding that each PCC basically had the same set of slides that were presented, so it was a really good broad brush approach of all the things that were going on with the postal service right now and certainly chief among those are things that we talked about before, Informed Visibility and of course Informed Delivery which continues to grow and so much conversation about that and that actually kind of bridges into the PRINT show that you and I were at on Thursday, Friday, and Saturday. And PRINT in prior years had also been called graph expo, but now was focused specifically on print. Back in Chicago… for a while there they tried a Florida venue but in Chicago, again, familiar area, but they did move it to a Thursday, Friday, Saturday. I think that affected some of the attendance, which was definitely down compared to prior years. And I'm sure also that was a reflection of some of the large print providers that had to choose between going to PRINT in Chicago or the PRINTING United show, which is coming up a little bit later on in October. But the point I wanted to make is that for those that were there and shout out to our customers that stopped by to say hi to us at our booth. Anita, you and I did a session on Saturday morning and I was quite pleased that we had a fairly good turnout. Don't you think?

Anita: 03:09 I didn't expect anyone to show up on a Saturday morning. So I was pleased and they were very attentive and asked good questions. I thought it was great.

Chris: 03:16 I did too. And, and you know, we talked about just being informed, staying informed, you know, how to get the information with the Postal Service and you know, for the attendees that were there and they came up and talked to us afterwards and you know over a dozen people on a Saturday morning. I was a little concerned. We were going to be competing with bugs bunny. I guess we were a bigger draw than bugs. But they were very complimentary on all the things that are going on because there is so much that is happening right now in the mailing industry. Um, but I thought that was good and always a pleasure to sit side by side with you in a presentation, Anita.

Anita: 03:47 Oh, thanks. Well we do kind of tag team pretty well. Hey, before we get into the rest of the agenda, my Atlanta friends will really be upset with me if I don't mention the greater Atlanta Postal Customer Council. That's where I was on Friday. I had the honor of chairing the nominating committee for the Mail Award for Industry Leadership. And this year's winner was Bill Skinner with Neopost ,and we surprised him. It was fabulous. And I have to also say Steve Phelps was our keynote, bless his heart that, you know, going from pricing to giving a hour long presentation. I think he did a good job. He stuck with the information that he was real comfortable with and did a good job. And then last we played this game at the end called Kahoot. So I just have to say, all right, 13 questions all about the postal service. 120 attendees and you know who came in first.

Chris: 04:40 Of course, you know who, that's not fair to have you playing that game, Anita…you know too much.

Anita: 04:44 Yeah, I know, I know. But anyway. Okay, so on with the agenda.

Chris: 04:49 So, you were also at PostCom, right? So do we want to jump into that first?

Anita: 04:52 I'd love to. Yeah, there's just a few highlights that I want to cover. First, we had Jeff Johnson, the VP of Enterprise Analytics, and he talked about his three focus areas. One, to continue to close the gaps an increase visibility. Second, empowering the employees and you know, the supervisors in the work room floor and so forth. And then transportation visibility. So those, those are his three hot topics. But what everybody in the audience wanted to talk about was flats visibility because obviously, um, that's, you know, a huge gap, especially with carrier route bundles and so forth. And Phil Thompson at Quad said something that just shocked me. He said that he was really dismayed to discover that 100 million of his flats a month do not get into service performance and measurement.

Chris: 05:41 Wow. Wow. Is that just because of how it's sorted, it's just not going across the equipment to get scanned or

Anita: 05:45 Right. They've got the carrier out and high density…

Chris: 05:48 Well they have the volume to sort to those finer levels.

Anita: 05:50 Right. And if they deliver anything to the DDU, they're not getting scans there. In fact Valassis was another one because they do the majority of their delivery to DDU, they aren't getting any container scans. So anyway, Jeff mentioned that they've got a couple of pilots going on. Manual bullpen and then at the DDU so that, you know, they'll take a subset of a bundle to provide visibility for the entire bundle. So again, it's a…

Chris: 06:15 Logical scan, right? If I scan one bundle in a container and if I use the nesting logic that's contained in the Mail.dat. And can I infer that assuming there was no breakage, right, or damage to the integrity of the container, then I should be able to feel pretty confident that the rest of the pieces are there.

Anita: 06:29 Right, right. Exactly. And then Marc McCrery, he gave a presentation on his organization, made it a little bit clear on whose responsibilities are within each of their areas. And I think maybe we can talk about that in another podcast. But anyway, he talked about the challenges with seamless and he again reiterated the timeline that's been delayed a little bit in March, 2020 parallel. And then February, 2021 mandatory but he mentioned that there are 459 kids that are on seamless. That seemed quite high to me. But like 80% of letters are on seamless, but only 20% of flats are. And I think we've probably talked about that also.

Chris: 07:09 Yeah. And that's the challenge with the flats, right still. And you know, just because of all the nuances to it, that number, that 459 I think you said at the PRINT show and I know at a couple of other venues I'd asked how many people were in seamless acceptance in the, and I saw quite a few hands go up. But again I think it's a reflection of what type of mail are you producing and processing. So if it's mostly letters, you're probably in seamless already.

Anita: 07:29 Right. And everybody whose in seamless with letters are really, really happy with the program so I just have to get there with flats. And one question was asked, is the postal service going to start changing the thresholds, which is always a little bit nerve wracking if they tighten up the thresholds and then you end up with more errors. But Mark said that any adjustments of that nature and he didn't have any plan but would go through the federal register notice process. Right?

Chris: 07:54 Yeah. I'm glad to hear that. I know in the past Marc's always been a big proponent of transparency and particularly federal register notices. So, so I'm glad to hear that he's sort of following that same approach and that's the right way to do on is to have an open conversation and make sure that the postal service and the industry are working collaboratively together, whether it be at MTAC or whatever venue makes sense.

Anita: 08:14 And then Gary Reblin, he shared some interesting statistics. He said that 8 billion pieces of mail have utilized promotions this year so far. And that doesn't include mobile shopping or informed delivery. So he's expecting about 10 billion pieces by the end of the year.

Chris: 08:30 Yeah, I'd heard that too from him at MTAC. And I think he's right. I think we're going to see that there was a lot of interest with it at the PRINT show. I know when we had our user conference back in August, we had a lot of customers that were interested in participating with informed delivery and, and a lot of the reasons for that is because it's reached that point of criticality, right. Or where it makes sense. Nearly 12% of all delivery points in the United States have at least one person who subscribed to informed delivery. That's pretty good now in terms of getting some type of a response and leverage that. And I'm seeing more and more of the color replacement images as well as that click through usually about once a week.

Anita: 09:05 Oh, I'm getting them almost daily.

Chris: 09:07 So that's good people are using it.

Anita: 09:09 Yeah. Right. And then he gave us an update on the ID promotion and he said that there are 6,700 mailing statements that have claimed the promotion discount successfully. And they had the 625 campaigns issued in one day. So it is exactly what we expected though. So I'm glad to see that that's coming along. And then he also confirmed that they are proposing the same six promotions in 2020 and of course with some tweaks here and there. So of course we should know that fairly soon.

Chris: 09:42 Right. Cause the board of governors met just recently too, right? It was a closed door meeting. So we don't know exactly what they talked about. But I think you and I were discussing it, most likely they were talking about pricing for 2020, and we've talked about where that may come in. I think it was about 1.9% for CPI plus whatever, you know, banked authority and then the 10 year plan. And then like you were just saying the promotions, right?

Anita: 10:05 Right. Exactly. And so let's see, we're recording this, uh, the second week of October. So probably by the end of this week is when we'll see the filing. So that'll be a subject of our next podcast, I'm sure. So, two more speakers I want to touch on. I'll try to go quickly. Ashley Poling. Oh my gosh, I, you know, the only way I could describe her as if you could imagine a varsity cheerleader. I mean that is her. I mean she is so pro-postal service, so pro rural America just, you know, smiles all the time. She, I mean, her personality was just contagious. She's one of the new postal regulatory commissioners and she has a lot of experience with service performance. She's considered to be an expert in that area. And you know, she just has that passion for protecting rural communities. And even going as far as saying that the postal service is the lifeline to the rural community. So anyway she talked about some challenges in getting legislation passed that, you know, building bicameral relationships and bipartisan relationships is really the key to moving any legislation. And of course she had to be careful with what she talked about because of ex parte rules, but she's very committed to hearing from and engaging with the stakeholders. So it was really pleasant to meet her.

Chris: 11:17 Well good. That's encouraging. I'm glad to hear she's got postal passion.

Anita: 11:21 Right? Right. Yeah. Hey, you have to have a third thing. You don't do things in twos, you do them in threes… Postal passion. Let's see. Come up with a third.

Chris: 11:33 And you said there was another speaker too, right?

Anita: 11:35 Right. Kate Muth, the executive director of IMAG, the International Mail Advisory Group. And of course she was in Geneva. And I think I've told the audience that the extraordinary conference was in Bern, Switzerland because that's where the normal congresses are held. But this was in Geneva because the audience was so big. There were, you know, there are 192 countries in the UPU and Kate told us that there were 150 attending the extraordinary conference. So it did have a successful outcome. There were three options being considered, A, B and C, but only two were satisfactory to the United States option B and C. and she said that option B, which was preferred by the United States was rejected. But it got a lot more yeses than expected. And so I did a little digging this morning. There were 78 nos, 57 yeses and nine countries abstained. But that kind of gave them overnight to think about those results cause that's, you know, it wasn't like outright rejected. So the next day they voted favorably on an option. It was option C with some amendments. So they call it option V. and, and Kate thought the V stood for victory. So the option C proposal, which I'm sure you've read about by now, included a carve out as they called it for the United States. So that countries that receive more than 75,000 tons of imported parcels a year can move to self-declared rates in July in 2020 and then there's a phased in options for other countries, but pretty exciting. I mean to be there to witness that successful vote. And Megan Brennan was there, they had the postal service and the United States had a really high level delegation there and you know, stressing how important this issue was to the United States.

Chris: 13:28 I'm glad to hear that the result was positive at the United States was able to stay in the UPU. I know that we had a lot of members at MTAC that were concerned about that, particularly with the political mail and the ballots that were going to be sent as well as just the volume and the commerce with that. And I appreciate that the UPU recognized that there needs to be some pricing flexibility that some of the, the things that were done in the past really no longer apply. You know, in terms of, um, the favoribility in pricing and we talked about that before. So sounds like it was a positive outcome for the United States and the other countries involved and hopefully we can continue to move forward with better mailing and more of a balanced and equitable commerce part of that playing field, right?

Anita: 14:06 Right, right. Exactly. There are some negatives, you know, they do expect that outbound rates are going to increase because they're unsure of how other countries will set their reciprocal rates.

Chris: 14:16 Right. How they're gonna respond.

Anita: 14:18 Right, right.

Chris: 14:20 Yup. Exactly. Cause we're going to set our price for the inbound to a certain amount and bring it back at more of a parity for those that are domestic mailers versus those that are mailing into the country. But as expected, other countries are probably going to respond with that. And so we'll have to see for those mailers that listen to the podcasts that are shipping mail outside the United States, we'll have to watch that closely. See what, how those other countries respond.

Anita: 14:40 Exactly. Well that was what I wanted to share from PostCom. So it's a good week.

Chris: 14:45 Yeah, it sounds like a great conversation. Glad that you were there to cover the PostCom meetings and certainly a of activity as well at the Postal Customer Council events that occurred all over the country and being involved with that. Well, Anita, anything else to share?

Anita: 15:00 Well, just one last positive note. The Pew research center poll came out mid September and 90% of Americans have a favorable opinion of the postal service. Higher than any other government agency.

Chris: 15:13 Oh, that's great. And I know that continues a lot of the favoribility of the trust that the public has with the United States postal service. And I think that trust is demonstrated by the reliability and the, the whole value supply chain working together collaboratively. The Postal Service, in a lot of cases, is sort of the visible part of the mailing industry, but there's so many other people involved with it. It's a $1 trillion industry with over 600 million jobs that are involved with it. So it's working together to help support what ends up being that brand. So, uh, congratulations to the postal service for that great recognition, but I think it's also a reflection of just the whole supply chain working together.

Anita: 15:48 Exactly. All right, Chris. Thank you.

Chris: 15:52 Thank you, Anita. Thanks for all the good information. And again, thanks for our listeners. We really appreciate your comments. You've told us when we saw you at PRINT, as well as on the web page. So thanks for listening. If you have any questions about BCC Software or what you've heard today, please do visit our webpage bccsoftware.com or give us a phone call. Let us know how can we help. Thanks, and have a great day.