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Who Pulls the Strings at the Postal Service

2002-2003 articles (some links may not be active)

The Magazine Publishers Association Board of Directors and Government Affairs Council were treated to an impressive array of political superstars during its annual meeting in Washington, DC this year.

Magazine Publishers of America applaud Commission Recommendation

Magazine Publishers of America's comments to Postal Commission

Mailing Industry CEO Council's  Letter to Bush on creating Postal Commission


Quotable: "It is said when rumors replace information as a form of communication in an organization, you can be certain the organization is in trouble. If so, the Postal Service and the American Postal Workers Union are in dire straits. While  postal employees and union members wait for hard information about rapidly changing events affecting their jobs, the storms swirling about the Postal Service continue to build. A partisan Republican committee is now plotting to change the laws that govern the Postal Service. The plan they present to Congress will certainly contain attacks on APWU members' jobs and benefits and possibly an attack on collective bargaining rights."  excerpt from "Workers Deserve More than Rumors"   Dan Sullivan, Editor Southwest Michigan APWU


Quotable: Omar. M. Gonzalez,  APWU Western Regional  Coordinator, described what he witnesses in Los Angeles on April 4 as "alarming." The commissioners seemed interested in only two things-limiting 'universal service' and finding ways to eliminate postal workers, " Gonzales said. The focus of that hearing was "Private-Sector Partnerships," yet panelists seemed to favor retaining "only the first mile and the last mile" from the current system, he said. "In other words, collection and delivery. There is a real danger that the commission is just trying to make it easier to privatize the system." The earlier public hearing (Austin, Tx, March 18) focused on the impact of technology on the nation's mail- delivery system. Yet those with the largest stake in the system-ordinary citizens-were able to participate in this "public hearings only when granted a few minutes to speak at the end of each session


Quotable: By and large, the Commission's members seem to be interested and engaged in the process. But let's face one very important fact; the Commission, which is comprised of intelligent and well-spoken Bush appointees, has had little, if any, prior exposure to the operations of the postal system. They are being asked to fully understand and thoroughly comprehend the complexities of a centuries- old organization - one that has evolved from horseback mail processing to our modern- day, highly-regulated, service-driven, digital sortation system. And they also are expected to absorb the details of  the competitive environment in which the Postal Service operates, to take into consideration the complete culture of the postal workforce, and to respect the work of the postal unions that have struggled endlessly to create a better, safer, and more productive workplace. Mark A. Gardner National Secretary-Treasurer National Postal Mail Handlers Union


Who Pulls the Strings at the Postal Service

"The Postal Service's mission of providing mail service to every American community, established by our nation's founding fathers nearly 230 years ago, was reaffirmed by Congress in the Postal Reorganization Act of 1970. "The Postal Service  shall have as its basic function the obligation to provide postal services to bind the nation together through the personal educational, literary and business correspondence of the people," the law states. "It shall provide prompt, reliable and efficient services to patrons in all areas and shall render postal services to all communities."


In fact, corporate mailers wrote much of the Postal Service's Transformation Plan, a roadmap for rolling back six-day delivery and closing facilities, particularly in smaller rural and inner-city communities

In theory and in past practice, this means the Postal Service should serve the public above all by providing universal service at uniform rates. Today, however, public interests are often forgotten, and postal policy makers are increasingly serving one special interest — giant business mailers — due to the Washington, DC, special-interest game. In fact, corporate mailers wrote much of the Postal Service's Transformation Plan, a roadmap for rolling back six-day delivery and closing facilities, particularly in smaller rural and inner-city communities.

The Postal Service sponsors the Mailing Industry Task Force, ostensibly to provide a forum for senior postal managers   and the Postal Service's larger customers to communicate about technical issues and postal operations — all well and good: Business mailers are the Postal Service's largest customers, and the USPS has an obligation to serve all its customers well. Working behind closed doors, however, to develop and lobby for policies that favor mailing industry interests over public interests is another story.

Mailers 'Seize Opportunity'

In March 2000, the Task Force — led by Deputy Postmaster General John Nolan and Pitney Bowes CEO Michael J. Critelli — began working behind closed doors to develop the Postal Service's strategy for the future. As a willing partner, the Postal Service is counting on Task Force members to conduct lobbying and public relations campaigns to sell the reforms that the Postal Service and the mailing industry want.

In October 2001, the Task Force submitted to the Postal Service Office of Strategic Planning its aptly named report,        Seizing Opportunity, which contained many of the industry's recommendations for changing postal policies. Six months later, much of the report was prominently featured in the Transformation Plan. "The good ideas developed in 2001," Critelli said in the Task Force's Fall 2002 Progress Report to the Postal Service, "have been able to move quickly from concept to reality because of the remarkable collaboration between the industry members and the Postal Service."

As it happens, one of the Task Force's "good ideas" is the creation of a "corporate pricing plan." This new category of below-cost postage rates would enable the industry to further escape paying its fair share of the costs for the infrastructure the Postal Service needs in order to equally serve every American community. According to the Task Force report, USPS Vice President for Pricing and Classification Steve Kearney and the mailers developed it among 150 other new pricing "ideas" through brainstorming sessions, workshops, and interviews with mailing industry executives. The report further notes: "The Task Force applauded the decision by the Postal Service to include development of a 'corporate pricing plan' as an   objective of its Transformation Plan.

The Task Force has also created "an industry-wide Transformation Plan effort [to] develop and launch an advertising and marketing program ... directed towards influencers whose opinions and commentary could affect the outcome of legislative reform efforts."

Questionable Relationships

Under the law, Postal Service and all government agency employees are barred from directly or indirectly trying to influence members of Congress. Though the Postal Service collaborated with the mailers in drafting a master plan for transformation, it cannot legally lobby for the legislation required to enact certain components of the Transformation Plan, such as    changing the rate-making process, rolling back worker's collective bargaining rights, closing facilities, and ending six-day delivery.

The Task Force got around this problem by recommending the creation of a separate legal entity, the Mailing Industry CEO Council, to lobby Congress and conduct a public relations campaign to support the legislative changes the industry and the USPS both want. Unlike their private-sector Task Force colleagues, USPS officials will not serve on the CEO Council.

Members of the CEO Council will personally contact legislators to press the case for postal reform and, according to a    Sept. 23, 2002, Associated Press (AP) report, "the council will conduct grassroots campaigns through mailing industry employees, and use the Washington-based media to target legislators and other 'influentials,' and David Sable, a CEO Council board member and President of  Wunderman New York, who, along with Critelli, co-chairs the council's strategic planning committee. By the way, Sable's direct-mail and public relations company is in charge of the mailer's public relations efforts.

Though the Postal Service cannot officially participate in the CEO Council's lobbying activities, it tacitly endorses them, or at least the deputy postmaster general does. The Sept. 23, AP report also said, "The CEO Council will be able to raise the voice of the mailing industry, and be heard above the din of other interest groups, such as private shipping companies and employees unions said John Nolan, the Deputy Postmaster General. Nolan sits with other CEO Council members on the Mailing Industry Task Force, which works on proposals for postal reform. 'When it comes to the legislation, the squeaky wheel sometimes gets the grease, and so it makes a lot of sense. It's just that we can't advise them what to do,' Nolan said."

That the Postal Service is relying on the mailing industry to do the dirty work of lobbying for its Transformation Plan is made clear not only in Task Force reports it makes available on its Web site, Mailing Industry Task Force, but in the statements    of its other leaders as well.

At a Sept. 25, 2002, meeting of the National Postal Forum in Boston, USPS Board of Governors Vice Chairman S. David Fineman asked the mailing industry leaders to support the Postal Service's plant consolidation plans. A congressman "ranting and raving about what happens to

"If you people and others don't have any backbone and stand with us as we begin to downsize the Postal Service, it will not happen... Stand with us, shoulder to shoulder..."

—USPS Governor S. David Fineman

XYZ community," Fineman said, "might be right because XYZ is terribly affected... But I'll tell you right now, if you people and others don't have any backbone and stand with us as we begin to downsize the Postal Service, it will not happen... Stand  with us, shoulder to shoulder as we start to move in to the 21st Century." Fineman chairs the governors' strategic planning committee.

That Pesky 'Universal Service Burden'

The mailers and their CEO Council will likely heed Fineman's call to arms because the projected savings from closings would be needed to offset the revenue the Postal Service will lose if their plans for postal rate-setting and corporate pricing become a reality. A cheaper Postal Service means even cheaper rates for business and advertising mail.

So perhaps it is not surprising that the mailers' Transformation Plan calls for relieving the Postal Service from its "universal service burden" of maintaining the workforce, facilities, and equipment needed to operate the 38,000 postal facilities. The plan calls for pursuing "regulatory and legislative reform to provide the Postal Service the latitude to adjust service levels   and delivery frequency."

The Transformation Plan was developed with plenty of input from the mailing industry, but virtually none from its workforce   or ordinary customers. As a result, it is a blueprint for keeping big mailers' rates down, no matter the cost to postal workers or the American people.

Source: The American Postal Worker Jan/Feb 2003 issue  pages 20-21


Mailing Industry: Commission Delivered for US

Not so long after the latest version of postal "reform" legislation stalled in Congress last year, mailing industry leaders began pressing the Bush Administration to create a presidential commission to give momentum to their agenda for the Postal Service.

"As members of the recently formed Mailing Industry CEO Council, we are writing to express our support for the concept of a Presidential Commission," the heads of the nation's largest mailers, contractors, and presort houses wrote to President Bush on October 30, 2002.

"It is increasingly clear,"  the mailers wrote, "that we need a Presidential Commission to jump-start the legislative process...We stand ready to assist you and your staff in any way possible."

And the mailers certainly did "assist," judging from the thousands of pages of testimony they submitted, the scores of witnesses and consultants they provided, and the dozens of private meetings they conducted with individual commissioners during the panel's official seven-month tenure.

Mailers Have Their Say

Mailing industry executives seem happy with the results of the commission's work. The chart below shows how the mailers dominated participation in public testimony and private meetings. In the next page is a sampling of their reaction to the final report

"The Commission agreed with the CEO Council that  private-sector partnerships, work-sharing and outsourcing produce the most cost-effective postal system, and that USPS-industry collaboration should be maximized to drive innovation and to benefit users of all services.. We are deeply grateful."

-Michael J. Crittelli, chief executive officer of Pitney Bowes, chairman of the Mailing Industry CEO Council

"The Postal Service could finally have the ability to control costs by trimming its bloated infrastructure

and workforce. We applaud the commission's recommendations, and we are gratified that after careful and thorough research, and much discussion, they have come to many of the same conclusions that we came to seven years ago."

-Gordon Hughes, president, American Business Mailers, a trade association of magazine publishers

"We are please that many aspects of the Commission's

report reflect suggestions we made."

-Jerry Cerasale, senior vice president for government affairs, Direct Marketing Association


"A truly outstanding piece of work"

-Magazine Publishers of America

"We encourage the Bush Administration and Congress to act with all due speed to put these recommendations into effect report reflect suggestions we made."

-Charles Morgan, president of Axiom, a marketing services company, and member of the Mailing industry CEO Council

 

Source: APWU, The American Postal Worker article Sept./Oct. 2003 issue  pages 8-9


Letter to President Bush from Mailing Industry Council

October 30, 2002

VIA FACSIMILE (202) 456-6208

President George W. Bush

The White House

1600 Pennsylvania Avenue, N.W.

Washington, DC 20502-0184

Dear Mr. President:

As members of the recently formed Mailing Industry CEO Council, we are writing to express our strong support for the concept of a Presidential Postal Commission. We understand formation of such a Commission is under consideration by your Administration.

The U.S. mail is critical to commerce, serving as a vital channel for business. The mailing industry generates about $900 billion annually and employs more than 9 million people. It represents more than 8% of our gross national product. The   mail touches literally every household across this nation.

Although the mail is a vital conduit for business, the U.S. Postal Service has experienced significant financial difficulties in recent years. It ran a deficit of $1.7 billion in fiscal year 2001 and owes the U.S. Treasury more than $11 billion. The Postal Service expects to lose nearly one billion dollars in fiscal year 2002. Although recent financial performance is an improvement over the original projections, it is still cause for alarm. The Postal Service is working diligently to bring down costs and increase operating efficiencies. However, it faces unprecedented challenges from a rapidly changing market environment. If our postal system is to survive and thrive in the 21st century, fundamental change is required.

While there have been a number of legislative proposals to address structural, fiscal, and other issues at the Postal Service, Congress has not acted on them, and no action is anticipated this year. It is increasingly clear that we need a Presidential Postal Commission to jump-start the legislative process. Therefore, we hope the Commission will have a clear mandate to bring forth its recommendations in a reasonable time frame. It is our strong view that a Commission, once formed, should spur action needed to address some of the serious challenges facing our postal system. It needs to be an impetus for legislative reform and not an excuse for Congressional delay. We need changes sooner, not later, if American business and the American public are going to have a viable and competitive mailing system in the 21st century. There are those in the postal world who seem content with the status quo of an mailing postal system. Those voices of inaction must not be allowed to drown out the chorus for reform.

As members of the Mailing Industry CEO Council, we stand ready to assist you and your staff in any way possible. Please feel free to call on any of us at any time.

Sincerely,

Michael J. Critelli Gary M. Mulloy William L. Davis C. Hamilton Davison Jr. David F. Dyer Judy F. Marks

Richard M. Hochhauser Nigel W. Morris Charles D. Morgan Thomas O. Ryder David Sable Michael P. Sherman

Dr. Jerome Swartz Charles W. Schellhorn

Introducing The Mailing Industry CEO Council-Support the Mail


United States Postal Business-We've seem to change our priorities


Who are the people providing Testimony, Commentary, or Meeting with the Presidential Postal Commission



Michael A. Crew  Rutgers University,  Dr. Crew is Professor of Economics and Director of the Center for Research in Regulated Industries, Rutgers University. His principal research interests are regulatory economics, peak-load pricing, and the theory of monopoly. His current research includes the economics of postal service, economic depreciation, diversification and deregulation issues for utilities, and environmental problems of utilities.

Paul R. Kleindorfer-Anheuser-Busch Professor of Management Science; Professor of Decision Sciences, Economics, and Business and Public Policy. Current Projects -Risk management for the energy sector; the economics of postal and delivery services; environmental strategy; natural hazards insurance and mitigation.

The Center for Research in Regulated Industries holds an international conference on postal economics and   postal policy sponsored by leading national post offices, express carriers, labor, and consultants. Papers presented at the Conferences are published in the series of postal economics books. The latest of the series is Postal Delivery Services: Pricing, Productivity, Regulation and Strategy, edited by Michael A. Crew and Paul R. Kleindorfer, Kluwer Academic Publishers, 2002. Some of the 2003 sponsors for the Center for Research in Regulated Industries:

The Direct Marketing Association (The DMA) is the largest trade association for businesses interested in direct, database, and interactive global marketing, with about 4,700 member companies from the United States and 53 foreign nations on six continents. Founded in 1917, its members include catalog companies, direct mailers, teleservices firms, Internet marketers, and other at-distance marketers from every consumer and business-to-business segment - both commercial and nonprofit - as well as companies that provide supplies and services to marketers.

Alliance of Independent Store Owners and Professionals (AISOP) - In 1989 and 1990, AISOP was instrumental in mobilizing 37 small business associations with more than 5,000,000 small business members to work in supporting a postal platform that persuaded the Postal Service to adopt worksharing discounts.  John Haas, who formed AISOP survived the Holocaust, but his business could not survive ever rising postal rates.A local rate and a saturation rate were subsequently approved by the Postal Rate Commission.

American Business Media  -AMERICAN BUSINESS MEDIA’S INITIATIVE FOR A PRESIDENTIAL COMMISSION ON POSTAL REFORM SUCCEEDS-For more than six years, American Business Media has contended that only a Presidential Commission would have sufficient stature and freedom from political pressures to tackle the most difficult—and important—issues facing the Postal Service. American Business Media opposed various legislative approaches that fell far short of the mark. In the past year, most large mailers and associations became convinced that this was the correct approach. As a result, calls for a Presidential commission have become nearly unanimous.

Mailer's Technical Advisory Council (MTAC) is comprised of 58 organizations which represent the major mail related industries in each class of mail. The committee was established in 1966 to provide the Postal Service with information, advice and recommendations covering the technical aspects of the mail system. This includes processing, transportation and distribution.  MTAC's quarterly meetings in Washington provide a forum for the Postal Service and its customers to work together to increase efficiency. Through MTAC, MSMA members can make direct input relative to Postal Service policies and procedures. www.ribbs.usps.gov/mtac.htm

CEO Mailing Industry COUNCIL MEMBER LIST 
 

  • Michael J. Critelli, Chairman and CEO, Pitney Bowes Inc., and President of the CEO Council 
     

  • Gary M. Mulloy, Chairman and CEO, ADVO, Inc., and Secretary/Treasurer of the CEO Council 
     

  • Cathleen Black, President, Hearst Magazines 
     

  • William L. Davis, Chairman and CEO, R.R. Donnelley 
     

  • C. Hamilton Davison, Jr., President and CEO, Paramount Cards Inc. 
     

  • David F. Dyer, President and CEO, Lands' End, Inc., and EVP/GM, Customer Direct, Sears, Roebuck & Company 
     

  • T. Michael Glenn, Executive Vice President, FedEx Corporation 
     

  • Richard Hochhauser, President and CEO, Harte-Hanks, Inc. 
     

  • Judy F. Marks, President, Lockheed Martin Distribution Technologies 
     

  • Ann S. Moore, Chairman and CEO, Time Inc. 
     

  • Charles D. Morgan, Company Leader, Acxiom Corporation 
     

  • Nigel W. Morris, President and COO, Capital One Financial Corporation 
     

  • Thomas O. Ryder, Chairman and CEO, The Reader's Digest Association, Inc. 
     

  • David M. Sable, President and CEO, Wunderman, New York 
     

  • Charles Schellhorn, President and CEO, DST Output 
     

  • Michael P. Sherman, Vice Chairman, Crosstown Traders, Inc. 
     

  • Dr. Jerome Swartz, Executive Chairman of the Board and Chief Scientist, Symbol Technologies, Inc.


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