'Post Office In Your Hand’ an interview with Ross Philo, CIO and senior VP, USPS IT operations - November 2, 2009
The scope of the U.S. Postal Service is vast--208 billion pieces of mail delivered last year, 656,000 employees, 221,000 vehicles, 32,700 post offices--and its challenges are in proportion to its scale. The amount of mail handled by the Postal Service declined last year, while revenue, at $75 billion, was flat.
The Postal Service is looking to right itself through consolidation of offices, downsizing its workforce, and offering new services. Just a few days ago, it announced new capabilities for smartphones, including Track & Confirm, Post Office locator, and Zip Code lookup.
CIO and senior VP Ross Philo oversees the Postal Services' IT operations and reports to Postmaster General and CEO Jack Potter. Philo is included among InformationWeek's Government CIO 50, a group of the most influential technology executives in government.
Prior to joining USPS in February 2008, Philo worked for Cisco, startup Visean, Halliburton (as CIO), and Schlumberger. InformationWeek talked to Philo about how IT is being applied within the Postal Service to manage costs, improve operations, and deliver new services.
Interview
“CC Postal Revenue Protection Working Group – Update” by Jean-Philippe Ducasse Chair (representing PostCom) Director and Global Government Affairs, Pitney Bowes - October 29, 2009
Presentation made to the Postal Security Group in Bern, October 29, 2009
Presentation
Selected presentations from Post-Expo 2009, 29, 30 September and 1 October, Hannover, Germany - October 23, 2009 World Postal Business Forum
Economy - Responding to the economic crisis: new challenges, new opportunities
“The global economic and financial crisis: green and red shoots in the postal sector” by José Anson, economist, Universal Postal Union
[Presentation]
“Competition and the crisis: trends and challenges in EU postal markets” by Alex Dieke, head of department, postal services and logistics, WIK-Consult GmbH
[Presentation]
“Korea Post's strategy in response to the environmental changes of postal business - overcoming crisis and challenges for the future” by Mr Kee-Deok Kim, director general, Korea Post
[Presentation]
“Customer focus: Revolution not evolution” by Carl Gerold-Mende, board member, parcel and logstics division, Austrian Post
[Presentation]
"Economic crisis: Challenges and opportunities” by Carlos Silva, director, international, CTT Correios
[Presentation]
Chief Executive Forum - Reshaping the sector: the leaders look to the future
“Delivering tomorrow - our strategy for meeting customer needs in 2020 and beyond” by Dr Frank Appel, chairman of the board of management, Deutsche Post AG
[Presentation]
“Facing the Challenge of Growth Through Innovation?” by Massimo Sarmi, CEO and managing director, Poste Italiane, SpA
[Presentation]
“Transforming post for sustainable growth: India Post” by Mrs Radhika Doraiswamy, director general, Department of Posts India
[Presentation]
“The experience of a medium-size PPO” by Claude Béglé, president of the council of administration, Swiss Post
[Presentation]
“Trends and developments in the global postal industry” by Dr Andreas Taprantzis, POC Chairman, Hellenic Posts SA (ELTA SA)
[Presentation]
“Transformation of Magyar Posta - best answer also in crisis time” by Dr. Péter Kazár, Chief Financial Officer, Magyar Posta
[Presentation]
Technology - Growing business through innovative technology
“Innovation management: how to create value in times of change - concepts and examples” by Dirk Palder, member of the global postal leadership team, Capgemini
[Presentation]
“How innovative is the logistics industry?” by Martin Wegner, head of technology & innovation management, DHL Innovation Center
[Presentation]
“Replication and interconnection of digital postal services” by Paul Donohoe, specialist postal electronic services, Universal Postal Union
[Presentation]
“Ready, steady, go! Making mail fit for the 21st century” by Barry Larson, head of strategy media, Royal Mail Group
[Presentation]
Environment - The postal sector and climate change from the global environmental perspective?
“Environmental impact - challenges, threats and opportunities” by Ingemar Persson, secretary general, PostEurop
[Presentation]
“Our strategy to fight against climate change” by Stéphanie Scouppe, assistant, sustainable development, ethics, La Poste
[Presentation]
Environment - The postal sector and the environment from a business perspective
“Sustainability in Royal Mail Group” by Dr Martin Blake, head of sustainability, Royal Mail Group
[Presentation]
Remarks by USPS PMG - John E. Potter at the National Press Club in Washington, DC on October 8, 2009 - October 16, 2009
[Press Release.]
Thank you, Donna, for inviting me here today. And thank you all for joining us. I can’t think of a better place than right here, at the National Press Club, to talk about the Post Office. After all, the press and the Postal Service have a lot in common.
We’re both trusted messengers - and have been - since the earliest days of our nation. We both touch just about every home and every workplace in the country. We are tremendously far-flung, with deep roots in every American community. And we’re challenged both as digital technology alters hard copy communication, and a declining economy erodes our revenue bases.
Like the press, the Postal Service must change to meet America’s changing communication-channel preferences. That’s what I am here to discuss today.
I’ll start with a quick look at the state of the Postal Service. These are challenging times — some of the toughest we’ve ever had. We’ve made solid progress in some key areas, and we’ve made some innovations that weren’t possible just a few years ago.
Next, I want to assure you that hard copy mail continues to have strong value in today’s marketplace, one that is being defined by electronic substitution - and options that provide robust competition for every one of our products.
Finally, I want to talk about the future. The only thing we can do about yesterday is to learn from it. The only thing we can do about today is to make the best of it. And tomorrow? Well, it would be a mistake to think - even for a moment - that we can’t influence the direction of our future, that we can’t bring a new level of financial stability - and success - to the Postal Service. The options to bring this about are only as limited as our imaginations.
So, let’s begin. We’ve called 2009 a challenging year, but that’s being generous. Financially, it threatened to make history - and not the kind we would have preferred. The word that comes to mind is “devastating.” Mail volume declined by 28 billion pieces.
Two things prevented 2009 from being a total loss. The first was the outstanding performance of our operations group, under the leadership of Deputy Postmaster General Pat Donahoe.
Pat and his team reacted aggressively - and intelligently - to the staggering and unprecedented one-year mail volume decline which was driven largely by the economy. That was magnified by the fundamental marketplace shifts that have been changing our business for the last 10 years. Consumers and businesses are migrating to internet technology at a pace that has escalated in the last year.
So how did we respond to the squeeze play of 2009? We stepped up cost cutting, trimming an unheard of six billion dollars - yes, six billion dollars - from our expenses. We reduced our career workforce by 40,000 positions - and we cut almost 115 million workhours.
But this isn’t a one-time reaction to the demands of today’s economy. It’s part of a process of continuous improvement. Today, we’re down to 618,000 career employees. That’s about 160,000 fewer than when I became Postmaster General in 2001 - more than 20 percent.
Through it all, we continually focused on service. Pat and his team brought service and customer satisfaction to record high levels. Our employees did a spectacular job, and I really appreciate what they’ve done. Today, we’re up there with the best.
And by every poll and study, the American people show a remarkable confidence and trust in the Postal Service and mail - we’re one of the three most-trusted organizations in the nation, the highest-ranked in government, and in the shipping industry. According to a Gallup Poll, a full 95 percent of Americans say it’s important to them, personally, that the Postal Service stay in business. And as much as they may prefer paying their bills electronically, experts tell me people still want to get those bills, in hard copy, in the mail.
Although we are in a financial bind we haven’t lost our focus on our most important job: providing top-quality service. There are a lot of people who deserve the credit for making that happen. Every one of our employees, no matter what their job, gave it their best in a trying year. And they made a difference.
And our union leadership was there with us too. Did we always agree on everything? Of course not. But we all understood that 2009 couldn’t be business as usual.
We worked together with our unions to bring down costs and to find better ways to serve our customers. Together, we reduced the number of delivery routes, changed employee work schedules and implemented growth initiatives. Our employees know that we have to work together to build a stronger Postal Service.
It’s the same with our customers. They joined with us to explore advances in processing technology - like the intelligent barcode - that offers an information-rich stream of data about their mailings, and flats sorting equipment that brings the efficiency of full automation to an even larger portion of our product line.
Even more importantly, industry leaders and our unions rallied with us to address a complex financial dilemma that spells the difference between profitability and continued multi-billion dollar losses.
The problem grows out of a three-year-old law that added more than $5 billion to our annual costs for prefunding retiree health benefits. I was nervous about it, because I knew we just couldn’t afford to pay that bill when it came due last week. Our mailers were nervous, too. They were concerned we’d have to pull back on service to make ends meet - and that would have negatively affected their businesses.
I’m happy to say that didn’t happen. Mailers stood with us. The unions and associations that represent our employees stood with us. And Congress and the Administration took the time to understand our concerns. At the end of the day, they stood with us, too.
Last week, the President signed legislation that changed our 2009 Retiree Health Benefit Trust Fund pre-funding payment from $5.4 billion to $1.4 billion. While this is a welcome move that enabled us to meet all our obligations in 2009, there is more work to be done to secure our future. We’ve dealt with the “crisis of the day.” Now we have to get focused on the long-term changes needed for the Postal Service to remain a national asset.
And on both sides of Capitol Hill, the chairmen of our oversight committees agreed that further legislation is necessary to address the Postal Service’s challenge. Congressman Edolphus Towns said that the law which passed would provide the Postal Service with some relief but, “We still have some more work to do. The problem has not been solved.” Senator Tom Carper was even more direct. “This is a Band-Aid we will accept,” he said. “It’s not the solution we need.”
And they’re right. Even with $4 billion worth of welcome news, we will still lose more than $3 billion dollars on a pro forma basis in 2009. That follows similar losses in 2007 and 2008 - reflecting the effects of the recession, changing mail use patterns, and the change in timing of our benefit costs. Compare that to 2003, 2004, 2005, and 2006, when volume was strong; when our total profit approached $10 billion; and when we completely eliminated our debt.
And what’s our outlook for this year?
Without a big change in the way we’re required to do business, we’re likely looking at a deficit of more than $5 billion dollars - for years to come. This is a critical public policy issue.
Everyone has to have a role in a national conversation about our future - and no single group can dominate it. We need the consensus of all parties involved to drive new legislation in 2010 to enable the Postal Service to operate like a business. That is our mandate today - and it has been our mandate - but we do not have the tools necessary to do that.
Let me be clear about this - the problem is not the value of the mail. I am convinced that mail will continue to be an affordable, accessible, and powerful engine to facilitate communication and commerce for our nation. It’s our job to keep it that way.
Each year, trillions of dollars move through the mail. Even with the volume reductions we’re seeing, we delivered about 176 billion pieces of mail last year, with over $68 billion in revenue. About 90 percent of that mail is generated by businesses - from the biggest companies in the nation to the stores, restaurants, and services in your own neighborhood. Believe me, businesses wouldn’t be in the mail if it wasn’t doing the job. Obsolete? I don’t think so. Our annual revenue is still higher than 95 percent of the companies in the Fortune 500.
So what’s the power of the mail? Nothing mysterious. It’s targetable. It’s measurable. It gets opened. It gets read. And it works.
Even with the bills, most people enjoy getting their mail. More than eight out of 10 households usually take the time to look through their mail. And when it comes to advertising mail, 20 to 30 percent say they consider acting on it. That’s an incredible potential response rate.
Then there’s the internet. It’s changing our business - and in some positive ways, too, ways that we never would have imagined.
Retailers with an internet presence, who use the mail to promote their businesses, are seeing something interesting. The people they mail to spend more time on their websites and, as a result, they buy more and spend more.
There have been some other welcome developments, too. The same law that increased our expenses more than $5 billion a year also provided us with some needed new pricing flexibility. This may not be enough, by itself, to overcome the magnitude of the costs imposed by that law, but it does give us a hint of what’s possible with a new and better business model.
We’re able to compete, on a more equal footing, with other shippers, and we’ve seen some market-share increase. This summer, we offered the first “sale” in our history, and followed it up with a fall sale. And from what we’ve seen so far, they’re exceeding the goals we set for them. It’s amazing what we can do when we have the opportunity manage our business like a business. These may be small steps, but they’re forward steps.
It all comes back to the role of mail in supporting communication and commerce. Mail works. The problem is that the business model that was created to support the mail no longer works.
We’re facing cost requirements that just can’t be squared with the realities of the business. We’re at a crossroads. The status quo just won’t do any more.
We have to change. We have to make some important public policy decisions about the future of the Postal Service. The consequences of inaction are just too great.
And it’s not only about the Postal Service. There are millions of American jobs in the mailing industry. We just don’t always see them as directly associated with the mail.
There are paper manufacturers, envelope fabricators, mail equipment companies, direct marketing firms, printers, designers, and meter manufacturers. There are small one-, two-, and three person businesses that print and presort mail and there are major consolidators employing hundreds of workers. There are transportation companies who shuttle catalogs, magazines, packages, and every other kind of mail, to every corner of the nation.
And there are our competitors, who fly our mail between America’s airports, and who rely on us to deliver some of their products in places where we can do it more efficiently. That says a lot about their faith in the Postal Service brand. And I promise you, we’re going to keep our brand strong.
This is all pretty solid evidence that mail won’t just disappear. The challenge is creating a firm financial base so the Postal Service can continue to do a great job at prices that make sense for our customers.
But it’s interesting. When I hear about how businesses and consumers use the mail - and how they value the mail - I’m struck by the small but loud minority who’ve been pushing “Do Not Mail” legislation in state capitals around the nation.
On some level, they just don’t seem to think the mail should have a role in supporting commerce. Somehow, they think a “sale” offer coming through the mail-as opposed to a newspaper, a magazine, TV, radio, or the Internet-is a bad thing. Ads pay for the internet, as well as broadcast TV and radio programs. So, too, ad mail helps pay for universal mail service in America.
I just don’t get it. Especially when I look at what they call “facts.” They’ve got it all wrong. The mailing industry was at the forefront of the “green” movement - a long time before the movement even had a name.
What about the paper in just about all the mail you get? It’s recycled or it comes from trees that were grown specifically to produce paper - not from virgin forests. They’re renewable resources.
And not only is mail recyclable, but mailers have made it easier than ever for you to be selective about the mail you want to receive and the mail you don’t.
And that business about mail making up 50 percent of municipal landfills? Well, that’s just - rubbish! The actual number? Far closer to two percent - and shrinking.
We process the mail using less energy than ever. But we’re going to do better than that: we’re going to cut energy use by 30 percent in our 34,000 buildings over the next five years. We’re going to reduce petroleum use by 20 percent in our fleet of 219,000 vehicles. And that fleet includes almost 44,000 alternative-fuel-capable vehicles, the largest civilian inventory in the world.
We have embraced change when it comes to being environmentally responsible. We did it not only because it was good for business but - even more importantly - it was good for America.
As we navigate the complex world of electronic diversion, new media, and changing customer needs, we in the mailing industry must explore and embrace change. The Postal Service is the cornerstone of this industry and change is not new to us. The Post Office has been reinventing itself for nearly its entire existence. The challenges have been many. And in each case, a public policy dialogue led to progressive changes that carried this organization forward.
Today, I ask America to join with me in renewing that dialogue. We must take a fresh look at the future of the Postal Service and its role in serving America. I am not talking about the short-term future of our mail system. Rather, I believe we have to examine what the Postal Service will look like 7, 10, and 15 years from now. If we don’t take advantage of the opportunity in front of us today, we will do America a disservice. The status quo simply won’t do.
That’s why I want to establish a public dialogue about the future of the Postal Service - not as it existed yesterday, nor as it exists today, but as it evolves and changes for tomorrow.
Just a few days ago, “60 Minutes” commentator Andy Rooney noted, rightfully, that there’s something special about a letter, and the best mail is a letter from a friend or a relative. Andy went on to say that all the Postal Service needs to do is to get America back to writing letters. I wish it were as simple as that. Let’s be realistic. Letter writing, as it used to be, is not coming back.
The revolution in technology has changed the way we communicate with each other - permanently and unalterably. I use email. I use the Internet. And my son and daughter communicate in ways that seem to change every day.
It’s not the Postal Service’s job to ignore technology, it’s not our job to supplant technology, and it’s not our job to stand in its way. We’re not here to block progress. We are here to make sure the mail supports and promotes the communication and commerce needs of American households and businesses.
Yes, we can learn from our past, but the imperative is to look forward. The public policy dialogue I am proposing is not about the needs or preferences of Postal Service management. It is not about our employees. And it is not about a particular mailing industry segment, or a particular business partner.
This is about determining the role of the Postal Service so that it has a relevant and viable place in the fabric of our nation decades into the future.
We start by asking the tough questions. How much mail will there be in 10 years? How many Post Offices do we need? How often should mail be delivered? How will we pay for it? What new products should be offered to better serve America? What should we charge? And, unlike today, should taxpayer funds have a role in supporting it? We must come to the table with an open mind, without any preconceptions, except for one - the Postal Service has to offer affordable, universal service for the nation.
Yes, over the past year, I have advocated closing and consolidating offices where it can save us money, and where we can protect service. I have advocated for moving to five-day mail delivery. I have advocated for legislation to expand our product base. And I have advocated for help from Congress in restructuring legally-mandated costs that we can’t afford. But we cannot be wedded to any particular approach. I’m certainly not.
Each one of these positions was developed for one reason - to build a bridge to help us avoid the consequences of the complete financial disconnect between today’s Postal Service and the Postal Service we must reinvent for the future.
The future won’t come from wishing. It won’t come from hoping. It will come from all of us coming together to with a common goal of doing what’s right for America.
The answers to the questions raised in this dialogue must come from many different voices with many different ideas. And that has to include new voices, new thinking, and new approaches.
That’s the key to creating the path that moves the Postal Service forward.
We have shown, again and again, over the course of more than two centuries, that the Postal Service can evolve to meet the changing needs of our customers, and the demands of the marketplace. We will do it again.
I was delighted when I learned last month of Postal Regulatory Commission Chairman Ruth Goldway’s support for a national conversation on the future of mail and hardcopy communications. I am also encouraged that the GAO’s study on the future of the Postal Service will add to that dialogue. And I can’t underscore the interest of so many members of the House and Senate in helping the Postal Service adapt to bring about constructive change.
In many respects the dialogue has already begun. Let’s use the opportunities to craft out a public policy debate that will advance the mailing industry - and build unprecedented success and new markets for all of us well into the future.
I can’t think of a better place to begin than right here, in this room, with your questions and your ideas. Let’s get it started.
Thank you.
"In Digital Era, Marketers Still Prefer a Paper Trail" by Jeffrey Ball, Wall Street Journal - October 16, 2009
[Article.]
Never is the elusiveness of a paperless world more evident than at this time of year, when mailboxes overflow with catalogs.
More than 17 billion catalogs were mailed in the U.S. last year -- about 56 for every American.
The quantity of paper consumed by catalogs is daunting. In the U.S., catalogs account for 3 percent of the roughly 80 million tons of paper products used annually, according to RISI Inc., a forest-products consultant based in Bedford, Mass. That is more than either magazines or books.
While a 3 percent share of the paper market might not sound like a lot, much of that paper traffic is unsolicited, and little of it -- less than 2 percent by one estimate -- prompts a sale. But catalogs pay. Like so many environmental initiatives, from solar energy to hybrid cars, reducing the impact of catalogs runs into economic realities that favor the old way of doing things.
Much of what used to be done through the mail, including bill payments and personal correspondence, is now handled electronically.
So why does the catalog, which helped Richard Sears launch his eponymous retail empire more than a century ago, continue to thrive in the electronic age? Because glossy catalog pages still entice buyers in a way that computer images don't. Catalogs, marketers say, drive sales at Web sites, making them more important than ever.
Among retailers who rely mainly on direct sales, 62 percent say their biggest revenue generator is a paper catalog, according to the latest survey by the Direct Marketing Association of its members. Only a fifth of those retailers said they draw their biggest sales from their Web sites.
That is why virtually no one expects the mail-order catalog to go away -- even though only 1.3 percent of those catalogs generated a sale, the survey found. The average U.S. catalog retailer reported mailing about 21 million catalogs in 2007, sending out a new edition every 26 days.
"There will be some paper version for as long as I'm in the business," says Steve Fuller, chief marketing officer for L.L. Bean, the Maine-based outdoor-goods purveyor famous for its hunting boots and fleece jackets. Bean sends out about 250 million catalogs a year, making it one of the country's biggest catalog retailers. The company won't disclose how much paper those catalogs use.
Internet retailing has environmental consequences, notably energy-consuming Web servers. But so does the paper industry. It is the third-largest energy user within the U.S. manufacturing sector, trailing the energy and chemicals industries, according to the Department of Energy's Energy Information Administration. Making paper accounted for 2.4 percent of U.S. energy use in 2006, the most recent year for which statistics are available.
Little data exist on how much energy is used specifically to make catalogs. A 1999 report by the Environmental Defense Fund, an advocacy group that sought to highlight catalogs' impact, said they consumed more energy in one year than one million homes.
The catalog industry says it is working hard to reduce the environmental impact of its mailings, by pushing retailers to increase their reliance on recycled paper and by making it easier for consumers to opt out of mailings they don't want to receive.
The paper typically used in catalogs contains about 10 percent recycled content, according to industry consultant RISI. That is far less than paper in general, which typically contains about 30 percent recycled content. For newspapers, a bigger paper user than catalogs, the amount of recycled content is roughly 40 percent.
Catalogs tend to use thin, glossy paper, which is difficult to make from recycled fibers.
Even environmentalists say there is a limit to the amount of recycled paper that the average catalog is likely to be able to use. "You need to sell stuff in a catalog -- the sweater has to look like a sweater," says Victoria Mills, managing director for corporate partnerships for the Environmental Defense Fund. The group has worked with several major catalog companies to help them nudge the percentage of recycled paper in their catalogs into the double digits.
Frustrated with the pace of progress, some activists are calling for a crackdown against catalogs. A San Francisco environmental group called Forest Ethics is circulating an online petition calling on government to set up a "Do Not Mail" list that commercial mailers would have to honor, modeled after the National Do Not Call Registry that allows consumers to block telemarketers' phone calls. By signing up, consumers would block unwanted junk mail, including catalogs. The group says it has gathered about 100,000 signatures.
Those efforts, while nascent, worry the U.S. Postal Service, which depends on catalogs as an important source of revenue. The do-not-mail campaign is an environmental indulgence the nation can ill afford, Postmaster General John Potter suggested in a recent speech in Washington. "Ad mail helps pay for universal mail service in America," he said. He rejected the notion that printed mail causes undue environmental damage. "The mailing industry was at the forefront of the green movement a long time before the movement even had a name," he said. Certain trees are grown specifically to make paper, he noted, adding: "They're renewable resources."
To protect its catalog revenue amid the recession, the post office recently hired a consultant to conduct a study that concluded that consumers who received catalogs from a retailer spent 28 percent more on that retailer's Web site than those who didn't get a catalog. "The more often you mail," the study said, "the more sales you could see."
Consumers always have the option of contacting retailers to stop receiving their catalogs. And some Web sites launched in the past few years allow consumers to opt out of receiving individual catalogs they don't want. Catalog Choice, a nonprofit group in Berkeley, Calif., runs one such site, and the Direct Marketing Association runs another.
But the sites let consumers reject catalogs only from those companies that agree to participate. Though hundreds of the biggest catalog retailers have signed up, others haven't.
Chuck Teller, executive director of Catalog Choice, is working on an idea that could wean catalog retailers away from paper-based marketing without hurting their businesses. His "iCatalog" aims to adapt the accessibility of a paper catalog to the digital realm. Using an online widget that consumers can install on a personal Web page or social-networking site, Catalog Choice continually updates and customizes retailers' product selections.
Still, so far there are widgets available for only a few dozen titles. The National Directory of Catalogs, meanwhile, lists 12,524 catalogs, the vast majority of which include a paper version. That directory runs to 1,266 pages.
USPS PMG Interview: Six-Day Mail Delivery Doesn't Make Sense - September 21, 2009
[Alex Kingsbury, U.S. News & World Report.] The Postal Service is in big trouble. The quasi-governmental organization has lost money every year since 2005 and is on track to be $7 billion in the red this year. Healthcare and retirement costs are the main culprits, but the volume of mail is also plummeting. With more consumers using E-mail as their primary means of communication and paying bills electronically, the amount of mail crisscrossing the country isn't expected to return to past levels. Personal letters are now estimated to compose only 6 percent of snail mail traffic. Postmaster General John Potter recently talked with U.S. News about how the service is adapting to this new reality.
Excerpts:
How is the Postal Service changing? ?For years, we've been aggressively managing the changes in the Postal Service. In the last year, we've cut thousands of jobs and cut our use of overtime. About 110 million work-hours have been cut since last year. We've renegotiated contracts with suppliers and service providers and closed postal buildings. But service is at record levels now, as well as customer satisfaction.
Are enough changes possible, given the legal requirement of universal service, benefit contributions, and rules on closing facilities? ?Do I wish we had latitude beyond the current law? Yes. We are consolidating facilities, but the law prevents us from closing facilities for economic reasons. An organization like Starbucks closes 800 stores and is rewarded for their adaptation to the economy. If I suggest closing post offices, I'm vilified. Then again, we have a universal service requirement, too. So, there's a balance.
Is universal service sustainable? ?If you can only sell stamps at a post office and use of the mail is diminishing because of electronic diversion, it's a formula that doesn't have a successful ending. The change that we've been seeking is flexibility on closures of post offices, and we'd like the ability to sell other things besides postal products. We have a retail network of 37,000 stores, with 8 million people who walk through the door every day. Now, there's a different mind-set in the United States about government competing with the private sector, but there's also a strong demand for universal service, and we have to find a way to fund it. I'm reluctant to ask for government appropriation because our model has worked for many years.
What do the retail options look like? ?Around the world, other postal services generate income in other ways. In Australia, you can renew your driver's license. In Japan, you can buy insurance. In Italy, you can do banking. In France, you can buy cellphones.
Does it make sense to continue six-day delivery? ?I don't think it does. We should move towards five-day delivery because back in 2000 we were delivering 5.9 pieces of mail per stop per day. Since then, it's dropped to 4.4 pieces. The type of mail we're delivering has changed, too. There's more low-margin advertising today and less high-margin priority mail. Most Americans say they are willing to have five-day delivery if it means that postal rates will stay down.
Let's talk about "low-margin advertising." How much junk mail do you get? ?I get a lot of advertising mail at my house. But the advertising mail is what allows us to finance universal service. If you eliminated advertising mail, then stamp prices would be much, much higher because we do make a profit on that mail. There's a real lack of understanding of how much that advertising mail contributes to our economy. For every dollar you spend on mail advertising, you get a $12 return, on average.
That's true for advertisers, but what about the cost to taxpayers from filling up landfills and carting away unwanted mail? ?Someone could say the same for advertising in magazines.
But people subscribe to magazines. They aren't normally dumped, unsolicited, on the front porch. The Environmental Protection Agency says 44 percent of all junk mail goes in the ground unopened.
All I can say is that people complain mighty loudly when they don't receive the same free coupons that their neighbor receives. I understand that there's a desire from consumers to control what's in their mailbox.
Is sending mail to "current resident" the same as spamming "everyone" at gmail.com? ?You could make the case that there's not a big difference between the two. In some sense, there is no difference. However, there's a lot more trust in advertising received through the mail, rather than through the Internet, partly because we have an inspection service that follows up on customer complaints and makes sure that the public is protected from what comes through the mail system.
What would you say to a national "do not mail" list like we have for telemarketers with the "do not call" list? ?That has come up through the years. But I would point out that there's a big difference between receiving something through the mail and aggressive, intrusive salespeople calling at certain times of the day.
What's the difference? ?One comes through the mail, while the other is, in a sense, invading your home through the telephone.
Yet taxpayers are also footing the bill for disposing of all that junk mail.
There have been many myths about the environmental impact of mail. I think it's grossly overblown. There are more trees in America today than there were several years ago. There's more recycled material in the mail now than there has ever been. There have been many studies about the impact of mail, and it is negligible. People [falsely] think that electronic mail incurs no environmental costs, that we never throw electronic components away and that energy costs nothing.
How will the mail system change in the coming years? ?If nothing else, service should shift to five days per week. I've been out there advocating that. We can think about changing the rules about retail sales in our locations as well. There will probably be other changes, too. Remember, it wasn't until Abraham Lincoln that we had regular rural delivery. It wasn't until catalogs that we had free rural delivery. And it wasn't until the 1930s that the Postal Service regularly delivered packages over 4 pounds.
Has electronic communication undermined the mission of the post office? ?We need to have a national debate about the future of the post office. There are still a lot of people who don't have a computer, some who don't have a bank account. There is a lot of commerce that doesn't go through the Internet. And the Postal Service is a lot more into the fabric of America than most people appreciate. For example, we have an address database and a ZIP code database that serves the electronic world very well. If we were to disappear one day, someone might wake up and say, "How do I set my insurance rates without ZIP code boundaries?" Those contributions are lost in a debate that only focuses on hard copy versus electronic mail. By the way, those debates are most often held in places that are wired, not in rural America.
Are we having this national debate in an informed way? ?Not yet.
"The U.S. Postal Service In Crisis" Testimony of John E. Potter, Postmaster General, USPS before the Senate Subcommittee, August 6, 2009. - August 7, 2009
Industry Leadership at World Mail Awards. Markus Mantwill, VP, Strategy, Postal Markets and Business Development, Pitney Bowes (right) and Nadine Hollmann (left) a German media personality. - May 26, 2009
Pitney Bowes Promotes Industry Leadership with World Mail Awards Sponsorship
For the 10th consecutive year Pitney Bowes continued to support achievement and innovation in the postal industry by sponsoring the Industry Leadership Award at this year’s World Mail Awards in Munich.
The award was presented to Peter Bakker, CEO and chairman of the Board of Management of TNT by Markus Mantwill, Vice President of Strategy, Postal Markets and Business Development at Pitney Bowes. It recognises the exemplary leadership of an individual in advancing the postal industry and carries a charitable donation of 7,500 euros to the educational initiative of the winner’s choice.
Accepting his award, Bakker said: “It is a huge honour for me and TNT to be awarded the World Mail Award for Industry Leadership. I would like to dedicate this award to all of my colleagues at TNT, who truly deserve this honour. The past 15 years has seen great changes in the mail and express market, TNT has been closely involved in these developments. The industry has come a long way; we will weather the current difficult economic circumstances. I would like to thank the jury for recognising TNT. We are very proud of this award.”
The Industry Leadership Award reflects an individual’s record of accomplishments, honouring that person for promoting innovation and effective management. These accomplishments can include: development of novel industry partnerships; a unique commitment to postal customers; and exemplary management of an institution to bring benefits to various postal industry stakeholders.
The panel for the Industry Leadership Award consists of past World Mail Award winners and other leading figures from the postal industry appointed by Pitney Bowes. For 2009, the panel included:
• David Treworgy, Partner, IBM Global Business Services, who is the non-voting chair • Jean-Paul Bailly, CEO of La Poste • Ulrich Gygi, former CEO Swiss Post • Helge Israelsen, CEO Post Danmark • Graeme John, Managing Director of Australia Post • John Potter, Postmaster General and CEO of the United States Postal Service • Elmar Toime, former CEO of New Zealand Post • Klaus Zumwinkel, former chairman of Deutsche Post World Net
Markus Mantwill, Vice President of Strategy, Postal Markets and Business Development at Pitney Bowes, noted: “This award goes to the heart of what Pitney Bowes wishes to see in the industry – innovation and accomplishment. Our company was founded by an inventor and was built on developments that helped advance communication for both businesses and individuals. We wish to continue that tradition and to promote these qualities in leaders of the postal industry worldwide as it evolves in the 21st century.”
