Postal Affairs Podcast

Thanks for listening to the Postal Affairs podcast! BCC Software recently acquired Satori Software from Quadient, and as a result, this podcast will no longer be updated. However, we’d like to encourage you to instead listen to the BCC Software podcast – Industry Corner – where we break down postal industry topics, explain the current state of the industry, and what it means for your business. https://soundcloud.com/industry-corner You can listen today on Apple Podcasts, Google Podcasts, Stitcher, or on Soundcloud. For more information, please visit bccsoftware.com/podcast, and we look forward to keeping you informed on all things related to the postal industry.

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -Government shutdown impact on the postal service -PRC issues annual report to President and Congress -American Postal Workers Union and USPS unable to reach contract agreement -Annual compliance report: additional findings

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -We officially have a full slate of 5 postal regulatory commissioners -PRC issues decision on minimum cost contribution of competitive products -Postal service files their annual compliance report

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -Price Change Continues to Draw Near -Interesting News on the Trump Presidential Task Force Report -Postal Service Is off to a Good Start for 2019 -We Officially Have an Inspector General

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -Important Changes Announced for Competitive Price Change -Postal Service Reports Fiscal Year 2018 Results -New Governors Approve the 2019 Financial Plan -UPS Launches Cargo E-Bikes in Seattle

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -What Do the Election Results Mean for Postal? -OIG Audit Looks at Postal Service Operational Savings -President Trump Signed STOP Act -Huge Industry Consolidation Announced

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: - Feedback being heard around the 2019 Price change - ACS billing has resumed, make sure your invoices look correct - OIG looks at customer satisfaction - USPS investment for fall and peak mailing season - UPS union “No” vote still means “Yes”.

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -USPS announced a 2019 Price Change -USPS Promotions -Update: Marketing Mail Federal Register

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -Postal Year Coming to End -Marketing Mail Federal Register Update -STOP Act is Passed by Senate -Senate Starts Taking Action to Prevent USPS Privatization

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service. Topics covered in this podcast: -We officially have Postal Governors -Postal Service Reports July Results -Postal Service Federal Register Notice Causing a Frenzy -Presidential Task Force Report

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service Topics: -Presidential Task Force Report is almost due -Recent OIG Reports

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service Topics: -EXFC Fades into History -Insights into Postal Service Capital Spending Plan -OIG (Office of Inspector General) Audit finding overtime issues -Lady Liberty Mix Up on Forever Stamp costs USPS $3.5 M

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: Topics: - President Trump looking at privatizing the Postal Service - President nominates PRC Commissioner - UPS avoids possible strike with Teamsters Union - Negotiations begin between USPS and APWU - Amazon wants to pay you $300K to deliver

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -Postal Service Publishes 2017’s House-Hold Diary Study -OIG’s Semiannual Report -Address Change Service creates buzz at MTAC -Postal Service Achieving Savings with Dynamic Route Optimization

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -OIG looks into new USPS vehicle purchases -Universal Postal Union Ranks. How did the USPS do? -USPS April Results -Scratch and Sniff Stamps

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -USPS 2Q Results -Civil Service Retirement System (CSRS) -UPS Labor Force Challenges -Lance Armstrong Settles Legal Dispute with USPS

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: This latest episode focuses on the National Postal Forum: -Informed Delivery -Informed Visibility -NPF Highlights -Postal Governors Update

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -President Trump creates task force on the USPS -Senate holds hearing on 3 BOG Nominees -Will Full Service become required? -Quadient will be at NPF in San Antonio, TX, May 6-9

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -10 Year Rate Review & Other hot topics -New Move Update Validation and Mailer Benefits -2017 ACR finds 304 Post Offices MIA

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -Exploding packages in Austin -PRC 10-year review getting flood of comments -Postal Service Mismanagement

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: Key USPS executive retirement FSS going from bad to worse PRC decision on “Appropriate Share” for competitive products Do Postal unions understand business?

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS FY 2018 Q1 Results USPS Change in Move Update Assessment Date RIBB’s is dead, Long Live PostalPro

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS Announces New Chief NPF is just around the corner PRC Final Decision Applying for Passports Made Easier

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: 1) Mail goes up in Smoke 2) Postal Service proposes new Green & Secure Move Update 3) USPS final rules on Full Service, eInduction, Seamless Acceptance 4) USPS Early Retirement

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -Price change just around the corner -major announcement at the Postal Service -major retirement announced at the Postal Service -the President tweets about the Postal Service -Postal Service filed their ACR for 2017

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -PRC Ruling on 10-year review -Two parts to PRC Decision

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: -Informed Visibility -USPS Usage of “Emergency Suspensions” -peak mailing season -100 year mark on Women Letter Carriers

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: 1.) PRC Approves Price Change 2.) USPS Publishes their FY2017 Results 3.) Results from USPS Independent Audit of New Service Performance Measurement System

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: The administration nominates 3 candidates for Board of Governors USPS finalized Publication 685 USPS publishes Move Update final rules OPM (Office of Personal Management) changes USPS pension calculations Spartan Motors receives $214M contract from USPS

Senior Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS officially announces 2017 Price Change PRC putting a spotlight on Flats USPS Key Holiday Shipping Dates

Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS - end of fiscal year 2018 price change - filing 10 year rate review and implications for the industry

Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS Reports 2Q Results:          Controllable Income was pretty much break even at a positive $12M o   A dramatic drop from SPLY which was $576M          USPS noted that primary difference was the removal of the exigent surcharge that would have added $500M o   Reminder: Exigent surcharge rolled off in April of 2016, so we are near the end of comparing apples to oranges          Operating Expenses increased $69M over SPLY          Year to date, the USPS has a net income of $967M (compared to a 1.6B loss in 2016)          Letter Mail Volume declined by 1.4B pieces (3.8% drop)          Packages continue to be the bright spot, volume grew by 137M up 11% and Revenue up by 12.7%   USPS Irresistible Mail Award:          Q4 Winner is another car company.  o   Q1 winner was Toyota o   Q2 winner was Lincoln          Q4 winner is Porsche o   “It Takes Something Amazing” campaign o   It used both a hologram and print to introduce the new Porsche 911 o   It included a plastic prism that could display a holographic video when placed on a tablet or smartphone o   Along with a full-color glossy brochure on features of the new model          2017 Irresistible Mail Grand Champion will be selected at the National Postal Forum on May 23rd.   PRC being Pushed by USPS to Decide on New Service Measurement Plan          History (Fox minding Hen House)          PRC has ruled that both systems must be run in parallel for an undetermined amount of time.          USPS is requesting PRC Decision by June 1st          The USPS request is an effort to avert unnecessary expense and duplication of effort.          “Assuming Approval”, it would allow the USPS to cancel its current independent contract (EXFC) for FY2018   OIG looks at USPS Fuel Consumption and Risk:            USPS has 7,600 mail transport vehicles and 16,000 supplier-operated highway contract routes          This make the USPS one of the largest users of diesel fuel in the US.          FY2106 the USPS purchased 251M gallons spending more than $570M o   Doing the math, that is $2.27 per gallon. o   A change of as little of 25 cents a gallon can have over a $62M impact.          OIG found the USPS is not positioned to mitigate the risk of increasing fuel costs          Looking at 2013 to 2016 mail volume declined by 4.3B pieces, yet HCR miles increased by 183M          While diesel costs declined over this same time period, the large increase in HCR miles is a major financial exposure if prices go up.          US Department of energy is predicting diesel fuel costs to increase $.74 per gallon over the next five years ($186M increase)          OIG is recommending the USPS incent conversion to alternative fuel options and improve negotiations to get the lowest cost per gallon

Director of Postal Affairs, Bob Schimek elaborates on the latest developments with the United States Postal Service: USPS Files January Financial Numbers: · USPS had an operating income of $42M while in the black, the plan was $263M and the previous year was $293M · After non-controllable expenses and unfunded liabilities the USPS reported a loss of $245M for the month · Key concern: Controllable expenses were above plan by 3% and above SPLY by 5.1% o January work hours were 3.7% above plan and up 4.2% over SPLY · Total Mail volume was down 0.4% below SPLY and revenues were up 0.6% over SPLY · Good news story continues to be Packages: Volume was up 14.5% over SPLY and Revenue was up 17.4% over SPLY OIG Looks at USPS Officer Travel: · USPS has identified 50 positions as Postal Career Executive Service · Includes PMG, DPMG, and all the USPS VP’s. · These officers shape the strategic direction of the USPS by setting goals, targets, and indicators · OIG was looking to ensure their travel was properly supported and complied with Postal policies and procedures · In FY 2016 there were 1,006 travel reimbursement requests totaling ~$948,000 · OIG reviewed 69 totaling $165,000 · In general the travel did comply with policies and procedures, but 3 items were identified o Officers did not always obtain approval for travel deviations o Credit Card Coordinators did not review balance refunds in cases o Corporate Accounting did not review Sloan Fellow travel reimbursement requests before payment. USPS Informed Delivery Going Nationwide: · USPS is stating by late April it should be available nationwide. · It will be rolled out in major metropolitan areas first. · Anyone interested can use the ZIP Code Lookup feature at informeddelivery.usps.com to see if it is available for you. · Site also include signup instructions. USPS Q1 Service Performance: · USPS publishes their service performance numbers on their website, but publishes more detailed numbers with the PRC · Better than SPLY, but still below targets. · With Q1 being the heavy mailing season, all service performance for First Class was lower than the previous quarter. · USPS also failed to meet any service performance target in First Class mail. · Periodicals also failed to hit all service performance targets. · Marketing Mail that was drop shipped did well, but origin entered “end-to-end” remained pretty much dismal. o Letter mail pretty consistently out performing flat mail. USPS Proposes Changes for Mailing Lithium Batteries: · USPS looking to align regulations with that of applicable regulatory agencies · Industry has the ability to provide comment before March 24, 2017 · Changes include marking options and warning labels. · USPS will be looking to implement these changes 60 days from official rule making. · USPS may entertain requests for extensions. USPS has one less option for next generation of delivery vehicles: · Last Fall the USPS announced 6 suppliers would build 50 prototype vehicles as functional prototypes to test. · Spartan Motors was one of the 6, but has backed out. · They noted it was not possible to meet USPS requirements with their chassis supplier. · So there are now only 5 suppliers vying for the ability to produce up to 180,000 vehicles for the USPS FedEx contract with USPS extended for 7 years: · FedEx provides the USPS express air transportation for Priority Mail and Priority Mail Express in the US. · Current contract agreement started in 2013 and now has been extended to Sept 29, 2024 · The modified contract is expected to generate $1.5B per year for FedEx

Director of Postal Affairs, Bob Schimek outlines the latest developments in the postal space including: PMG Megan Brennan met with MTAC: · USPS will be focused on a 3-prong approach of: o Postal Reform (DPMG Ron Stroman is “cautiously optimistic” about legislation passing this year) o Pricing Flexibility (10-year rate review) o Continued aggressive management action § Updating information for completing the final 60+ consolidations that are still pending. § David W noted: May consolidate some of the facilities in the Spring and Summer. · Likely won’t get to all of them this year · Some have been redefined as parcel processing facilities USPS Files Several Federal Register Notices · Both eInduction and Seamless Acceptance have been added to the DMM effective March 1st. · Another proposed rule Federal Register notice was published regarding Move Update on Feb 27th o Covers Address Quality Census Measurement and Assessment Process. o Penalty amount will not be shared until USPS files with the PRC. o Industry comments are due by March 29th. Lots of activities around USPS New Service Performance Measurement SPM System : · First, the USPS filed their dual set of Quarterly Reports (both current system and new proposed system) o PRC is requiring the USPS to run both in parallel for an indefinite amount of time to compare o New system report included a laundry list of issues and challenges that impacted calculations · 11 of 15 measures in FY17 Q1 numbers had margins of error that had statistically significant difference · It has been repeatedly noted that comparisons may not be possible o Current system is sample based o New system included 25.4 billion mail pieces for Q1 · In addition to filing Q1 numbers, the USPS also revised the proposed Service Performance Measurement System · USPS also submitted to the PRC their Performance Audit Plan for the new SPM Service Performance Measurement system o USPS had noted that the Audit Plan would be submitted by the end of 2016 o Scope and Objective of the audit is to evaluate the accuracy, reliability, and representativeness of SPM. USPS Files January Financial Numbers: · USPS had an operating income of $42M while in the black, the plan was $263M and the previous year was $293M · After non-controllable expenses and unfunded liabilities the USPS reported a loss of $245M for the month · Key concern: Controllable expenses were above plan by 3% and above SPLY by 5.1% o January work hours were 3.7% above plan and up 4.2% over SPLY · Total Mail volume was down 0.4% below SPLY and revenues were up 0.6% over SPLY · Good news story continues to be Packages: Volume was up 14.5% over SPLY and Revenue was up 17.4% over SPLY

Bob Schimek, Director of Postal Affairs at Satori outlines the following developments with the USPS including the OIG, hiring freezes and how the post office scans every piece of your mail: OIG take a Look at RPG (Run Plan Generator) Usage: · USPS has 265 mail processing facilities that can use RPG to optimize machine usage and operation efficiency · OIG Looked at USPS Plants that had high and low RPG usage o High: Pittsburgh and Minneapolis (86 and 92% usage rate) o Low: Boston and Northern New Jersey (59 and 32% usage rate) o FYI: National average is 83% usage · First finding: RPG is not being used to maximize processing efficiency because the USPS has no criteria to measure performance · Looking at machine throughput, the low facilities were as much as 21% lower than the high usage facilities. · Productivity was 19% lower, and service performance scores were 1.6% to 4% lower. · Delayed mail volume was 27% higher at the low usage facilities. · OIG believes $1.8M could be saved over 3 Quarters by improving machine throughput to the national average. OIG Looks at Accuracy of Grievance Settlement Payments: · Back in Dec of 2014, USPS and APWU reached a $56M settlement over a long-standing grievance o Regarding postmasters and supervisors performing work designated to the APWU employees · $44.8M the USPS paid directly to clerks and $11.2 was put into an escrow to be disbursed in a manner determined by the union. · In January 2016 the USPS paid $40.2M to Employees o OIG determined that $11.5M was not accurately processed o Payment errors included: non-payments, underpayments, overpayments, and payment to employees not entitled. o Example: $75,129 was paid to 8 employees not even on the APWU list… USPS get confirmation that Trump Hiring Freeze does not apply to them · Verdict on if the 2 for 1 regulation requirement applies to the USPS or not. Can Law Enforcement Watch Your Mail? Yes · We all know that USPS plans to expand Informed Delivery Nationwide in 2017 · What people might not know is that the USPS currently scans every piece of mail. o Law Enforcement can request those scans for person of interest in felony or fugitive cases. o Last year, the USPS processed 49K request for those mail piece scans.

Bob Schimek, Director of Postal Affairs at Satori outlines the following developments with the USPS Postal Reform Bill Re-introduced: · HR 756, Postal Reform Act of 2017: Major components of the bill include: o Postal Service retirees to use Medicare (pretty much wipes out the unfunded mandate) o Changes Board of Governors (currently none) from 9 down to 5 with a 7-year term o Permanently brings back half of exigency (1-time 2.15% increase) First Class stamp would go up 1-cent to 50 cents. o Would require USPS to appoint a Chief Innovation Officer o Eliminates state and nation political committees from being eligible for non-profit rates. o Bill includes USPS mandate a unique ZIP code for the following communities: § Miami Lakes, FL, Storey County, NV, Flanders, Northampton, and Riverside in the Town of Southampton NY, § Ocoee, Fl and Glendale NY · Hearing was held on Feb 7th which involved PMG, PRC, GAO, C21, and USPS Unions. o Interesting comments made by Megan: § If she had her way, full Exigent price increase would be brought back § If PRC gave her what she wanted in the 10-year rate review what would that be? Eliminate the CPI CAP Industry Requests to modify the 10-year rate review: DENIED… · PRC aligns with USPS opposition to modifying the current procedural schedule · Industry was requesting the PRC first focus on if any of the 9 objectives and 14 factors are not being achieved · Current process is mixing what is and is not being achieved with recommendation to change anything “perceived” to not be working o USPS will be presenting the case that everything is broken and the CPI cap needs to be eliminated o Industry believes the current system is working and should remain largely unchanged. · Request to be able to submit reply comments was also denied o Will mean industry will need to provide comments up front on all the combinations of 9 objectives and 14 factors USPS Q1 Results: · Controllable income was a positive $522M o While it is good to have a positive number, this is the USPS biggest quarter and last year their number was $1.3B · Overall Net Income of a positive $1.4B o Primary issue here was a $1.67B change in workers compensation liability… (due solely to changes in interest rates) § A 1% change in interest rates can have a $2B change in worker comp liability o They continue to whine about the removal of the Exigent Surcharge, noting it would have generated an additional $570M · Packages continue to be the bright spot, delivering record volumes, up 11% o Revenue was up 14.7% over SPLY ($701M in Rev Growth) · Marketing mail remains stable with volume up 1.3% · Labor Expense was up $400M and Transportation was up $100M both compared to SPLY o Driven by increases in benefits and package volume o Overall Controllable Expenses up $600M over SPLY · Total Volume declined from 41.9B pieces to 41.6B pieces

Things are starting to get interesting with the PRC 10-year Rate Review:          Industry filed two separate (but similar) motions to change the procedural schedule o   Asking that Phase 1 is purely focused on if the current system is failing to achieve the 9 objectives and 14 factors o   Once that is determined, then Phase 2 can be focused on what changes should be considered          USPS went on record, opposing the motions filed by industry.          At the heart of the issue: o   Industry believes the current system is working and wants to retain the CPI Cap. o   USPS wants to break the cap and have more ability to raise postage prices.          Several industry associations then responded to the USPS opposing motion o   Noting the request is a practical one, not a legal one.   9 by 14 matrix of craziness…   USPS Published Address Quality Census Method and Assessment Process:          Currently out on USPS PostalPro site          Will be published in the Federal Register to allow for industry feedback & comments o   Initially published in Dec of 2014, they received extensive industry feedback o   In July 2016 the USPS published a revised set of proposed rules (which also received extensive comments) o   Based on feedback, it has now published a 2nd revised set of proposed rules          Still need to do a detailed read, but a few items are already jumping out: o   eDoc Submitter still being held accountable for Move Update compliance, not the Mail Owner   eDoc Submitter will have access to data showing source of errors by Mail Owner o   Even if you pass on the Mailer’s Scorecard, the Inspection Service can still go after individual Mail Owners o   Size of the Penalty for failure is still unknown (speculation is saying somewhere around 7 cents per piece)          When asked about changes to the currently proposed 0.5% threshold o   The USPS noted that they are committed to providing at least 90-days notice.   USPS Posts a new version of Publication 6850: Streamlined Mail Acceptance for Letters and Flats          Similar to Move Update, it will be published in the Federal Register for Industry to comment          Can find it now posted out on USPS PostalPro website.          USPS received over 200 comment last time around.          Pub 6850 is 128 pages long that contain verification, acceptance processes and policies o   Two recent Fed Reg notices that add Seamless Acceptance and eInduction to the DMM o   Both reference this new Publication, so it is likely to get a lot of feedback again this time around.   PRC Issues Annual Report to Congress & President          Noted much of the PRC resources this coming year will be focused on the 10-year rate review          In FY2016 the PRC approved 281 Negotiated Service Agreements for Competitive Products          PRC Estimated the cost of the USO (Universal Service Obligation): The cost of binding the nation together o   USO has sever principal attributes:   Geographic Scope   Product Range   Access   Delivery   Pricing   Service Quality   Enforcement Mechanism o   While not required, the PRC also proposes an estimate for the value of the Postal Monopoly (Balanced)   FY2011: Cost 5.26B  Value: 4.25B   FY2012: Cost 4.84B  Value: 3.98B   FY2013: Cost 4.65B  Value: 4.74B   FY2014: Cost 4.34B  Value: 5.38B   FY2015: Cost 4.24B  Value: 6.48B   What does the Federal WorkForce Hiring Freeze mean for the USPS:          USPS provides essential service to the people and businesses of the United States, so it does not…          While trying to find this answer, I found some interesting facts regarding the Federal WorkForce:  o   Total size is just under 2.1 Million o   Turnover has averaged about 210K jobs per year for the past 5 years   ~75k quit   ~65k retire   ~55k leave because appointments expire   ~10k are fired

USPS Pulls out of Staples: • Amid an unfavorable ruling from the National Labor Relations Board, the USPS will end it’s relationship with Staples • This has been a 3 year battle with the APWU with them protesting outside of and boycotting Staples stores • USPS has stated that sales of postal services in Staples stores will end in the next two months • Over 500 stores will be dropped from the program o While the unions declare this a victory by preventing Staples or other companies from having full blown post offices o These same 500 stores will now be offering shipping services by UPS and not the USPS. • The Union’s main issue is that these locations are not staffed by Union Postal Employees • While some see this making perfect sense to offer postal services at customer convenient locations o The Unions declared this the privatization of the Postal Service • Previous PMG noted it is an example of the narrow, near-sighted view winning over the broader, long-term strategy • APWU has called off their boycott of Staples effective immediately. FedEx Signs deal with Walgreens: • 8,000 Walgreen stores will now serve as points of delivery service. • Includes both drop off and pickup of prepackage and prelabeled parcels • Benefit of such services is that shippers can leave a package when someone isn't home to accept it • Lowers the number of failed delivery attempts, which are costly to the likes of FedEx and UPS and create backlogs OIG Report on USPS Non-Career Employees: • In Fiscal Year 2016, the U.S. Postal Service employed an average of about 130,000 noncareer employees o These employees provide the USPS to have a flexible workforce and do not receive full employee benefits and privileges o Used to supplement its regular workforce (such as over the holidays) and reduce staffing costs (such as paying overtime). • However, non-career employee turnover cost the Postal Service about $95.1 million to hire and on-board in FY2015. • The average turnover for the 4 non-career crafts was 42.7% • OIG recommending the USPS develop a recruitment and retention strategy. o If the USPS could lower turnover to the National Performance Assessment Goal of 34.8%, it would save the USPS $23M What is the most endangered job in the country? • Apparently mail carriers… • According to careercast.com survey that looked at US Dept of Labor statistics to determine careers with the lowest career growth. • US Dept of Labor expects to see a 28% decline in mail carrier jobs by 2024. • That would be a loss of 136,000 jobs over the next 8 years. Previously we discussed that while Weed is legal in several states, it is still illegal to mail: • Apparently there “might” be a problem with mail carriers stealing the illegal packages. • The OIG issued a report on the topic in October and much of the report is blacked out or redacted. • OIG recommends the USPS implement a nationwide policy on packages that are suspect for containing marijuana. USPS sneaks in a delivery policy change: • Dec 8th Postal Bulletin (which is published every two weeks) • Noted a revision to POM (Postal Operations Manual) • USPS doesn’t make this available to the public • Comparing it to the last time they made a revision to the same section of the POM (Oct 2015) shows the following difference o Door delivery will generally not be available for new delivery points. While it is cold enough for Ice Fishing in WI, in the Bronx they are fishing for mail… • Thieves are stealing mail by feeding a glue trap attached to a string into USPS blue boxes • This is resulting in the USPS pulling the blue boxes • The plan is to replace them with new more secure boxed, but there is no known timeframe for replacement • Until then, local residents have to go without and go to their closest post office.

Reminder: USPS price change goes into effect next week: • Get out and by your forever stamps this week… • Reminder, we covered key dates in last week edition • Short week for USPS personnel at USPS Headquarters? o Monday is a holiday (MLK Day) o Then Wed – Fri USPS Headquarters is locked down for the inauguration, employees are not allowed in. o So only one working day before the new rates go into effect… I am sure this will go smoothly… USPS Add eInduction and Seamless Acceptance to DMM: • eInduction o For anyone drop shipping, it replaces 8125’s and 8017’s. o eInduction used IMcb scans to determine container payment, delivery status, and verifies payment and entry location o Mailers must be authorized, which can be done by contacting the FAST Helpdesk  Note: Business Mailer Support provides final authorization o Available to First Class Mail, Periodicals, STD Mail Letters & Flats, and BPM Flats and Packages o All container in eInduction must:  Have a unique IMcb  Must have eDoc for the mailing  Must not be included in any 8125/8017 paperwork  Must have a scheduled FAST appointment o Continuous Mailers require a different process for approval and Continuous Mailer MID. o Industry Comments are due by Feb 8th • Seamless Acceptance o Must contact the PostalOne! Helpdesk if you want to participate o 90% of all Full Service eligible mail must be sent using Full Service o Must be participating in Seamless Parallel program o Must be using eInduction • New USPS Publication Number everyone will need to know: o USPS Streamlined Mail Acceptance for Letter and Flats is now Pub 6850 o Pub 6850 is still just a draft, but both Seamless and eInduction DMM entries reference it. USPS Updates IV (Informed Visibility) Rollout Schedule: • Release has been delayed several times. • Release 1.0 is now scheduled for February (vs last update which was Nov/Dec 2016) • Release 2.0 is scheduled for Feb/March (previously January 2017) • Release 2.1 is scheduled for March • Release 3.0 is scheduled for April • Dates are contingent on results of pilot testing and additional release are planned for later in 2017 Online Holiday Sales Break Records: • Online sales were up 11% over last year $91.7B from Nov 1st to Dec 31st • Cyber Monday sales were up 12% over last year at $3.4B in sales • Black Friday sales were up 22% over last year at $3.34B in sales Social Security takes additional steps to get out of the mail (again). • Back in 2011, Social Security stopped mailing it’s annual paper statement • Amid criticism and pressure from congress in 2014 they resumed paper statements for worker who aren’t receiving benefits and don’t have an online account • This is now being further restricted to individuals wo are 60 and over aren’t receiving benefits and don’t have an online account. • This change will save SS 11.3M in printing and mailing costs.

Stories: In addition to the USPS ACR, they also filed their Comprehensive Statement on Postal Operations: • USPS.COM generated just over $1B in revenue and saw 11% increase in traffic with 4M visits on a daily basis. o 1.7B visits to the site from 425M Unique Users • USPS Online Postal Store saw 4% growth, with $280M in revenue o Noted adding PayPal which generated $7.55M and saved the USPS $450K in merchant credit card fees. • USPS enhanced their Mobile Point of Sales devices. There are now 2,900 across the US generating 26M transactions o Generated $92M in revenue which is a 427% increase in sales and 284% increase in transactions • USPS Processed 37M change of address requests • Full Service adoption is at 90.43%, up from 88% the previous year. o Biggest increase was First Class flats, increased 5% to 77% o First Class letters/cards have the highest adoption rate of 93% • 65% of all drop ship containers were using eInduction (automated invoicing starts in March) • 18% of all commercial mail volume is being entered through Seamless Acceptances • The 4 USPS Customer Care Centers received 49M calls with 16M requesting additional assistance from an agent (52K per day) • To handle package growth, the USPS installed 25 new Small Parcel Sortation Systems • USPS deployed 276K Mobile Delivery Devices to 24,666 delivery units • Total number of USPS routes increased by 2,327 to 229,104 and added 1,142,352 delivery points • USPS invested $221.7M in it’s delivery fleet: o 3,339 RAM Promaster extended capacity vehicles, 2,446 Service Vehicles, and 1,688 Administrative vehicles • Highway transportation expenses increased 5% to $3.8B, noted in large part due to package growth. • Sunday delivery ZIP Codes increased 1,082 to 9,369, delivering 111M packages (compared to 77M) • 30.6M pieces of undeliverable mail and secure destruction mail was captured, destroyed and recycled (781 Metric Tons) • USPS has 206,686 customers participating in the Real Mail Notification Pilot (schedule to go nationwide in Spring of 2017) USPS Reported November Numbers: • USPS Overall plan was to lose $365M • USPS overall results was a positive $951M (as a result of a large positive workers comp adjustment • Controllable Net Income was a positive $266M • Total Mail Volume was up 2.5% SPLY and revenue was up 4.3% SPLY • Package Volume was up 15% SPLY and revenue was up 19% SPLY • USPS Work Hours were 3.1% above plan and 6.9% above SPLY • So 2 months in, the USPS is at $1.455B compared to a plan of negative $368M

USPS files FY2016 ACR (Annual Compliance Report) with PRC: • The USPS submitted their report on Dec 29th • The ACR includes data and information on the costs, revenues, rates, and quality of service associated with postal products. • In response to the ACR, the PRC is required to submit an ACD (Annual Compliance Determination) o The ACD determines whether USPS products offered during FY 2016 were in compliance with title 39 requirements. • Comments due Feb 2nd: • First-Class volume continues to decline, but products are more than covering their costs. o 100% cost coverage means the product is fully covering it costs. First Class was at 224% o Revenue per piece was 46.3 cents and the cost per piece was 20.7 cents • Standard mail covered it’s costs at 158%. However o STD Flats did not cover its costs at 79.73%  Down 0.4% from FY15.  Revenue per piece was 37.5 cents, but cost per piece was 47.1 cents (9.6 cents per piece) o STD Parcels did not cover it costs at 63.8%  Down from 72.8 in FY15 (9% drop)  Revenue per piece was $1.187, but the cost per piece was $1.86 (67.3 cents per piece) • Periodical Mail did not cover its costs at 73.96% o Cost coverage decreased from FY15: 75.64% • Package Services covered it costs at 102.9% o Media Mail/Library Mail was the only category that didn’t cover it costs at 75.18% • USPS Standard Mail Promotions: • Advanced and Emerging Technology Promotion: USPS issued $6.2 million in discounts for roughly 1.5 billion pieces. • Mail Drives Mobile Engagement: USPS issued $18 million in discounts for roughly 3.6 billion pieces. • Emerging and Adv Tech/Video in Print Promotion: USPS issued approximately $17.8 million in discounts for roughly 4.3 billion pieces. • Tactile, Sensory and Interactive Mailpiece Engagement Promo: USPS issued approximately $6.3 million in discounts for roughly 1.5 billion pieces. • Earned Value Reply Mail Promotion: USPS issued approximately $10.5 million in credits for roughly 454 million BRM and CRM pieces. • The Mobile Shopping Promotion: USPS issued approximately $13 million in discounts for roughly 2.7 billion pieces. Reminder we have the price change (and associated preparation changes) going into effect on Jan 22, 2017 • USPS will be deploying a new version of PostalOne! this weekend (Jan 8th). • Once that is complete, mailers will be allowed to: o Starting submitting eDoc for mailing that will mail after Jan 22nd. o Will be able to start using Mail.dat 17-1 o Mail.dat 15-1 is valid both before and after Jan 22nd, but realize Presort will generate it differently depending on your mailing date. o Mail.dat 14-2 officially expires on Jan 22nd. o Mailings that are verified and paid for prior to Jan 22nd (under current rates) must be entered (drop shipped) by Feb 8th. • Big change for Letter size mailers are o Removal of the 3-digit sortation level o Additional weight being allowed, up to 3.5 ounces. • Big change for Flat size mailers are the changes to FSS Preparation and the new “required” OEL’s • Regarding the name change from Standard Mail to Marketing Mai: o The new indicia or postage markings should not be used for letter or flat mail until January 2018 at the earliest. o Tray label and pallet markings will be deferred until mid-2017 at the earliest. o Other changes, such as postage statements forms, are moving forward with the January 2017 price change.

Topics: REMINDER: Critical Incentives Deadline Almost Here: • Anyone planning to participate in the USPS 2017 Earned Value Promotion needs to register by Dec 31, 2016 • Anyone doing reply mail would be crazy not to participate • This year the USPS increased the incentive to 5 cents per piece. • The incentive runs from January 1st to June 30th. • At 5 cents per piece, this incentive can quickly add up… USPS Sets Drop Ship Dates around January 22nd price change: • Current Prices: PVDS (Plant Verified Drop Shipped) mailings verified and paid by Jan 21st o Will be accepted at the destination facility until Feb 8th • New Prices: Mailings may be verified and paid beginning January 8th o Provided the shipments are not deposited at the destination facility until Jan 22nd or later. PostalPro “Beta” site is now officially in production. • Became an official production site on Monday Dec 19th • USPS has noted that this site will eventually replace RIBBs • So now would be a good time to start playing around with it o Has greatly enhance search capabilities compared to RIBBs • At the point RIBBs is shutdown, anyone trying to get to RIBBs will be redirected to the PostalPro site NPMHU: National Postal Mail Handler Union reaches tentative 40 month agreement with USPS • Applies to ~45,000 employees • Contract is for 3 years and 4 months and will expire on Sept 20, 2019 o Still needs to be ratified by union membership • There will be 3 general wage increases: o 1.2% increase that will be retroactively effective on Nov 26, 2016 o 1.3% increase on Nov 25, 2017 o 1.3% increase on Nov 24, 2018 • In addition to the 3 wage increases, there will be 7 COLA’s for a total of 10 raises in 3 years and 4 months o 1st COLA: retroactive to Sept 2016 o 2nd: March 2017 o 3rd: Sept 2017 o 4th & 5th: Same months 2018 o 6th & 7th: Same months 2019 • No layoff clause if employed as of May 20th 2016. • Worker will have to start paying more of the Health Insurance premium: o 2017 the USPS will continue to pay 76% o 2018 that will drop to 74% o 2019 it will drop to 73% o As a comparison, Federal Government pays 72% • Both parties have agreed to form a Task Force on Sick Leave o Discuss opportunities to provide incentives for Mail Handlers to not use their sick leave. Unions Fighting over new USPS Equipment: • So the USPS has been buying new SPSS: Small Parcel Sorting Systems • The work was initially assigned to the Mail Handler Craft (NPMHU: National Postal Mail Handlers Union). • After a “better review” the USPS moved some of the functions to the Clerk Craft (APWU: America Postal Workers Union) o Facing and separating packages o Sweeping in rotation • NPMHU filed a complaint • Arbitrator ruled in favor of the USPS and the APWU How are decisions on new USPS retail access points made? • That is a question that the OIG asked… • USPS has over 46,000 physical retail access points • USPS using more alternative retail locations: VPO’s and CPU’s o Village Post Office o Contract Postal Unit o Managed by private sector partners • Cost USPS at least twice as much to on dollar of revenue from a traditional Post Office compared to alternative options • USPS opened 600 new alternative retail locations in 2016 • OIG Determined: o USPS is not always factor in it’s entire retail network when assessing the need for new retail access points o Did not always factor in the locations of it’s competitors o The USPS does not have robust data analytics capabilities to evaluate new retail access point proposals. o Lacks centralized system for tracking and recording proposals, related documentation, and decisions • OIG Recommended: o Develop comprehensive data analytics capabilities o Develop a centralized system for tracking and recording new retail access points o Update existing policies for evaluating the need for new retail access points.

PRC Public Meeting and Dec 20th PAEA Rate Review: • PRC has been working for a year to prepare for this event • Public Notice has been issued and the scope will include: o The CPI cap o The schedule for rate change o The 45-day notice prior to implementation o Rate changes due to extraordinary or exceptional circumstances (exigent surcharge) o Class level application of the annual limitation o The rounding of rates and fees o The use of unused rate authority o Workshare discounts • PRC will be review and accepting feedback on the following objectives: o Objective 1: To maximize incentives to reduce costs and increase efficiency o Objective 2: To create predictability and stability in rates o Objective 3: To maintain high quality service standards established under section 3691 o Objective 4: To allow the Postal Service pricing flexibility o Objective 5: To assure adequate revenues, including retained earnings, to maintain financial stability o Objective 6: To reduce the administrative burden and increase the transparency of the ratemaking process o Objective 7: To enhance mail security and deter terrorism o Objective 8: To establish and maintain a just and reasonable schedule for rates and classifications, however the objective under this paragraph shall not be construed to prohibit the Postal Service from making changes of unequal magnitude within, between, or among classes of mail o Objective 9: To allocate the total institutional costs of the Postal Service appropriately between market dominant and competitive products • Comments regarding the process and structure of the review, as well as whether the current system is achieving the objectives, while taking into account the factors, and if not, whether and what modifications to the system or an alternative system should be adopted as necessary to achieve the objectives, are due no later than March 20, 2017. • There are 3 ways that comments can be submitted o File comments on-line via a permanent account (many industry associations have a permanent account) o You can apply for a temporary account to submit comments on-line. o Use US Mail (just be aware of the delay in delivery due to the irradiation process for all mail sent to the PRC). • Other PRC related news, in the early morning hours of Saturday Dec 10th a little puff of smoke came out of the Senate…. • Both Chairman Robert Taub and Commissioner Mark Acton were re-appointed and CONFIRMED for another term o Both had expired terms as of Oct 14, 2016 and were serving in their hold-over year o Now that they were both confirmed, they will serve terms that expire on October 14, 2022. o President also officially designated Taub as Chairman (so no longer in an “acting” role: which has been since Dec 2014). o Mark Acton will be serving as Vice-Chairman for 2017 (which we covered previously) o There still remains one open spot on the Commission that will now be up to Trump to nominate.  Which could be important to prevent any tie votes

Topics for December 12th: And… Then there were None: (USPS Board of Governors) • Board of Governors was created in 1970 as a part of the postal reorganization act. • First time since Board was created that PMG is operating without board oversight. • Apparently now PMG reports directly to Congress • Megan received here 30-year service pin from James Bilbray o One of James final official act as chairman o Employees get a pin at the 25 year mark and every 5 years thereafter o Employees with 50 years with the USPS get a ping and a congratulatory letter from the PMG. The possibility of Postal Reform Legislation during the lame duck sessions of congress is dead • House has officially adjourned for the year without moving HR5714 forward. • The bill is officially dead, and any postal reform legislation will have to be re-introduced in the new congress USPS files FY2017 Integrated Financial Plan: • USPS ended FY2016 with a cash balance of $8.1B (which is 29 days of operating cash) • USPS achieved 3 consecutive years of controllable income and 4 consecutive years of revenue growth • USPS is projecting Revenue to increase by $1.3B controllable income of $100M (2016 was $600M) • FY 2017 net loss is projected to be $4.2B o The 10-year mandated pre-funding is now replaced with a 40-year amortization o USPS is now required to make amortization payments to fund its CSRS (Civil Service Retirement System)  Estimated at $1.2B annually for 27 years o Plus there is a $200M FERS (Federal Employees Retirement System) unfunded liability • If all the required amortizations are paid along with normal cost payments, they will lose $4B of liquidity • Total Volume is projected to decline by 0.6% • Employee headcount is now over 600,000 but USPS is projecting to reduce work hours by 1M in 2017 • USPS plans to make $1.9B investment in capital commitments: o $500M in facilities o $500M in mail processing equipment o $300M in vehicles o $600M in IT OIG Publishes Semiannual Report to Congress: • They completed 2,586 investigations that: o led to 389 arrests, 315 indictments, and 484 convictions o $321M in fines, restitutions, and recoveries o $30.4M was turned over to the USPS • OIG also focuses on USPS programs and operations. They found o $475M that could be put to better use o Questioned $2B in costs o Investigations discovered $193M in cost avoidance USPS deadlines for holiday shipping this year: • Dec 15th for USPS Ground • Dec 20th for First Class Mail • Dec 21st for Priority Mail • Dec 23rd for Priority Mail Express USPS Holiday Ad (about a little girl wanting a hippopotamus) appeared in the Creativity Top 20 site. • The ad is narrated by PMG Megan Brennan • It also features real USPS employees

Topics include: Tick, Tick, Tick, Tick… • Only 4 days… This Thursday, Dec 8th is the last day for the final Board of Governor • James Bilbray will be officially done. • Likely the final board meeting being held with James Bilbray on Dec 5th and 6th. o Monday includes: Strategic Issues, Financial Matters, Pricing, and Personnel Matters and Compensation Issues o Tuesday include: Discussion of prior agenda items and Board Governance USPS starts FY 17 in the Black: • October is first month of the 2017 Fiscal Year • USPS Earned $504M (with a controllable operating net income of $400M) • Total Mail Volume was up 1.1% SPLY • Revenue was down 0.7% SPLY ($6.225B) (Exigency roll off) • Shipping Services Volume was up 9.0% SPLY and revenue up 11.4% SPLY • USPS received a Worker Comp Adjustment of $490M • USPS added several new lines to their income statement: o RHB Unfunded Liabilities Amortization: $245M o FERS UnFunded Liabilities Amortization: $21M o CSRS Unfunded Liabilities Amortization: $103M o These are all estimates, Actual bills will be received between June and October 2017) • Workhours were 0.3% below SPLY USPS Files Q4 2016 Service Performance Results with the PRC • Included both the new proposed internal system and the current external 3rd party system. • PRC is having the USPS run both for an unspecified period of time • USPS reported that the new systems still has some “hiccups” o System wide issues impacted two days of flat tracking across all classes of mail. o There were also some system issues where certain locations and dates had very little data. o Some year-to-date results are still being calculated manually (which will be automated by FY17 results) o Laundry list of other items. • USPS continues to stress that comparisons between the two systems may not be possible. • Q4 Results from the new system were based on $23.3 Billion Mail Pieces • Statistically Significant Differences were reported for o FC Overnight, FC Flats, All of PER, All of STD Mail (except HD & SAT Flats) PRC Elected Mark Acton to serve as Vice-Chair of the PRC for 2017 • Nanci Langley is currently serving as the Vice-Chair for 2016 USPS Provides PRC with more information on “Pinch Points”: • This all ties back to the USPS 2015 ACD • PRC asked the USPS to provide written method to measure, track and record the cost and service performance issues for each of the 6 “pinch points” that were identified related to flats mail stream (where products are not covering their costs). o In July 2016 the USPS submitted their response o In Sept the PRC advised the USPS response did not meet their expectation o So then a Technical Conference was held with PRC on October 21st o Now this past week the USPS filed an additional 100 page response • The response breaks out each pinch point and: o The process, its components, information currently available related to the pinch point o The cost to produce/aggregate data to quantify cost and service impacts o Additional information that could be developed and want would be needed to implement and monitor a comprehensive plan for flats

USPS issues Industry Alert on Full Service Assessments: • In theory, any permit used during the previous month should be available to charge when an assessment is due • Apparently there have been instances where that has not been the case o When this occurs, the eDoc Submitter should contact the PostalOne! Help Desk. Senators submit letter pleading for Postal Reform • Letter was signed by 27 Senators • Sent to Majority and Minority Leaders (McConnell and Reid) • And Chairman and Ranking Member of Senate Homeland Security & Gov Affairs Comm (Johnson & Carper) • Letter stated Legislation should include: o Reliability: timely and consistent mail delivery (both urban and rural communities) o Accountability & Transparency: published performance information w/operational plans when targets not met o Enforcement: Must meet operational plan and stop lowering service standard to comply with targets o Continual Review: analyze USPS finances and make recommendations regarding affordable service. PRC Approved Competitive Price Change: • Everything is coming together for the Jan 22, 2017 price change, both Market Dominate and Competitive. • System will deploy on January 8th, so mailer can start submitting jobs that will mail after the price change. What has 11-days left???: • Last remaining USPS Board Of Governor… • Only 9 Business days for Senate to do something… • When asked at MTAC, PMG was optimistic that this would be addressed in Lame Duck. • 9 things that the USPS will not be able to do without a BOG: o Appointment, compensation, term of service, and removal of the Postmaster General o Compensation of the Deputy Postmaster General o Establishment of rates and classes for competitive postal products o Authorization of rate and fee changes for market dominant postal products o Authorization of a request to the PRC to add, remove, or reclassify products o Authorization of a notice to the PRC of substantive changes to product descriptions in the Mail Classification Schedule o Appointment and removal of the Inspector General31 o Transmission of the OIG’s Semi-Annual Report to Congress o Selection of a firm to conduct required USPS financial audits Does the PMG Earn a Fair Salary?: • Last week we noted that for FY 2016 the USPS Generated over $70B in revenue • Based on that, what would be an appropriate salary for the PMG? o $286,137? • PMG was paid less than one tenth of her counterparts at UPS and FedEx • UPS CEO received $11.3M in compensation in 2015 including $1M Base pay. • FedEx CEO received $16.8M in compensation in 2016 including $1.3M in base • Looking at the top 5 in both UPS and FedEx none earned less than $2.7M in compensation • 3 of the top 5 at USPS earned less than $400K Amazon delivery drivers need more training? Second instance of getting caught using Mailbox: • First example was reported in Dallas • Second example now being reported in Pittsburgh • These are being caught by diligent USPS workers. o In Cranberry TownShip PA, a man was shocked when he was told is Amazon Prime package had been delivered, but that his postal carrier had removed it and taken it to the post office, leaving him a bill. • The Amazon delivery driver placed it in the mailbox instead of on the front step o Many don’t know that it is illegal to put any mailable matter in the mailbox without postage. • USPS is stating that the letter carrier is properly following existing guidelines. • Apparently Amazon reimburse him for the $3.78 he was charged from the USPS.

Nov 15th, Court of Appeals Denies USPS Exigent Surcharge Appeal: • This has been the ongoing saga where PRC granted the USPS the temporary exigent surcharge. • Then the USPS appealed the “count once” rule, and won, so then the PRC had to recalculate a new larger number. • Then the USPS appealed again trying to argue that the “exigent circumstance” lasted for a longer period of time o (trying to go back to the well to be able to re-instate the exigent surcharge again) • It was an 11 page decision by the court, but essentially “…the Postal Service’s petition for review is dismissed for lack of jurisdiction.” • So is Exigent really, really dead??? (Well the half ghost of Exigency could come back in Postal Reform Legislation) Lame Duck and Postal Reform Bill: • Getting a bill passed looking possible. • The current bill includes a 2.15% across the board price increase (half of exigency). • CBO came back with a relatively good score on the House Bill USPS January 22, 2017 Price Change: • USPS has filed two errata’s since officially filing with the USPS • 1st Errata modified 28 prices (most being in STD Mail Non-Profit, but a couple for STD Regular Rate and Periodical) • 2nd Errata modified 36 prices in Standard Mail, changes being made to both Regular rate and Non-profit rates o Changes were made to maintain rate relationships between piece and pound rates o Change increased the overall price increase for STD Mail from 0.899% to 0.9% • PRC officially approved the price increase on Nov 15th. • Industry expressing concern around name change of Standard Mail to Marketing Mail o Key issue is if the change will impact open rates o USPS still moving forward, but will work with industry to do testing to changes to the mail piece USPS Released it’s 2016 Fiscal Year Results: • Total revenue of $70.4B • Controllable income of $610M • Continued double digit growth in Package business (Revenue growth of 15.8%, $2.4B) • Excluding the prefunding mandate, the USPS would have posted an income of $200M • Net loss of $5.6B • FY 2015, the USPS reported a $5.1B net loss • Noted in 2016 they invested $1.4B in building improvements, vehicles, equipment and capital investments • Works Comp increase by $922M, Compensation and Benefits increased by 1.2B, transportation increased by $413M • Restated the urgent need for Postal Reform legislation.

New USPS cargo vehicles have been spotted in the wild! Bob has a photo! The January Label List data has an issue involving missing data for Las Vegas and Honolulu, among others. Will the USPS labor pool shrink 28% in the next eight-years? Bob says “No way!”

New USPS cargo vehicles have been spotted in the wild! Bob has a photo! The January Label List data has an issue involving missing data for Las Vegas and Honolulu, among others. Will the USPS labor pool shrink 28% in the next eight-years? Bob says “No way!”

We are not done with the exigent surcharge, at least not if the USPS has anything to say about it. More problems have been found with the January data release, both lable lists and mail direction files are effected. Jim Cochrane has been named the new USPS Chief Marketing and Sales Officer, bringing to a close a turbulent period for that office…

The competitive price increase has been implemented. Package services averaged a 9.5% increase, but some areas saw +50% or better. Smart move for the USPS or killing the “Golden Goose”? The PRC has issued a reminder that the USPS needs to give at least 45 days notice prior to exigency being rolled off and must start filing bi-weekly revenue estimates starting February 1st.