The Mailers Technical Advisory Committee (MTAC) held its quarterly meeting last week in Washington, DC. For more information about MTAC and to see the presentations when they are posted, see their page on RIBBS. Here is a summary of some of the topics covered in the Feburary 2011 meeting.

New focus on the customer

The biggest message from this MTAC meeting was the Postal Service’s commitment to the customer experience. New Postmaster General Pat Donahoe kicked the meeting off with this message, stating that they plan to focus more on smaller mailers, and expand their definition of “customer” beyond the retail desk. He introduced the new VP of Consumer and Industry Affairs, Susan LaChance, who was very visible throughout the meeting. She will be looking at the entire USPS supply chain, and analyzing customer pain points throughout the organization. When asked about recent issues, including submission problems during SOX testing, Susan was quick to add these topics to her list. Many of the presenters repeated this message, which was welcomed by the MTAC crowd. If you continue to have trouble with your mailings, you can email Mail...@usps.gov to escalate your issue.

Taking a second look at Full-Service Intelligent Mail

After removing the May 2011 requirement for Intelligent Mail barcodes, the USPS is re-evaluating Full-Service. With only 631 sites certified to use Full-Service, the overwhelming response from the mailing community is that Full-Service is too complicated, and the current benefits do not outweigh the work involved to become certified. Chief Marketing Officer Paul Vogel put it this way: “nobody is liking the ‘stick’ approach to Intelligent Mail. Mailers need more ‘carrot’.” Several possible “carrots” were mentioned, including removing the BMEU (Business Mail Entry) requirements for Full-Service, revising the Start-the-Clock definition, improving ACS distribution, providing piece or container scans for free, and streamlining entry and payment. While they decide on the changes, USPS will offer a  refund for Full-Service ACS charges from October 2010 to the present.

The bad news

Unfortunately, USPS is still struggling to make ends meet. The huge retirement payments (CSRS and FERS) mandated by congress prevent them from breaking even, and the increasing cost of fuel is hitting hard at the bottom line. In addition to the elimination of all Senior Vice Presidents, USPS will be cutting administrative roles by an impressive 20% and consolidating districts, removing ten in the process. Trouble with Start-the-Clock definitions has taken its toll on service performance measurement; service standards were below target across the board, even after making improvements over last year. After reviewing the 2011 Q1 results, Chief Operations Officer Megan Brennan said “we’re not pleased with Q1 service performance.”

Looking forward

In addition to the new customer focus, USPS will be releasing new products and services in the next few years. A new TV ad, featuring “Al the Postman”, advertising direct mail will be released in the next month or so, and representatives have been sent out to various advertising companies to emphasize the benefit of print. For drop ship mailers, a new, electronic submission process will be available next winter, and more tools will be available online for mailers to create, prepare, send and review their mail. The Postage and Payment process is evolving as well — VP Pritha Mehra hinted at a new Universal Payment system to replace existing permits, and possibly replacing postage statements with an invoicing system. Details were vague, but this new system could be available as early as 2012.

barcodes · Full-Service · Intelligent Mail · mail preparation · MTAC · POSTNET · SOX · USPS

Each quarter, a group of representatives from the mailing industry meet with USPS personnel to get an update on where USPS is going and how it did over the past year. The Mailers Technical Advisory Committee (MTAC) is a great place to meet people from all parts of the mail stream. For more information about MTAC, and a link to presentations given at the conference, see the MTAC page on RIBBS. Here is a summary of some of the topics covered in the Fall 2010 meeting.

Potter set to retire, Donahoe takes the reins

The current Postmaster General, John Potter, was all smiles as he talked with MTAC members. With his retirement only weeks away, he praised the members of MTAC as an important role in developing USPS going forward. He also stated that, while they may not have always agreed on his actions, that he was “always acting in the best interest of the mail.”

On December 4, Deputy PMG Pat Donahoe will become Postmaster General. He was a bit late to MTAC after meeting with key members of congress that morning. Donahoe said that his main focus for 2011 will be to create a “better customer experience” for those that use the USPS. Additionally, he wants to grow mail volume by at least 5 billion pieces over the year, and to help create a “leaner, faster, smarter” postal service.

Mail volume is down, efficiency is up

It’s no secret that USPS is struggling financially. With a reported $8.5 billion dollar loss for 2010, USPS is only $3 billion away from its borrowing cap from congress. Without major changes to retirement funding and pricing laws, they will run out of money in 2011. It is notable that the majority of the USPS deficit is due to the retirement pre-funding that congress requires. Without this pre-funding, USPS would have only lost $0.5 billion in 2010.

One of the key issues facing USPS is the decline in mail volume. In the past year alone, First-Class Mail has declined an astonishing 6.9%. In contrast, Standard Mail has increased an impressive 8.9%, which shows that advertisers have faith in direct mail. Meanwhile, USPS has continued to cut where they can, chopping operating expenses by 50% in the last year alone.

USPS passes SOX testing

One of the requirements of PAEA stated that USPS must be Sarbanes-Oxley compliant by the end of 2010. Some mailers felt the effects of this testing as USPS tightened the reins on mail acceptance. Fortunately, after one of the largest SOX testing efforts in history, USPS received a clean bill of health from the testing efforts.

Intelligent Mail has unexpected results

One of the reasons USPS has been pushing Full-Service Intelligent Mail is the additional benchmarking it can provide. Unfortunately, due mostly to varying definitions of “start-the-clock”, less than 25% of Full-Service Intelligent Mail is valid to count for service performance. Incomplete or incorrect drop times are used when mail is deposited after the posted Critical Entry or Critical Acceptance times. However, the biggest reason for these ineligible pieces is that 42% of the containers used in these mailings are not associated with an appointment. USPS did not say how they will handle this, as they have recently removed the mailer requirement to associate each container with a FAST appointment.

Otherwise, USPS is happy with the adoption of Full-Service Intelligent Mail by mailers. Over 600 mailers have passed TEM testing, and over 400,000 postage statements containing over 40 billion mail pieces have been processed using Full-Service.

Problems continue with PostalOne!

USPS updated the PostalOne! system again on November 7 — and the upgrade was not as smooth as they had planned. There were periods of slowness and times when users were unable to log into the Business Customer Gateway. VP Tom Day stated that the changes in this release were necessary to ensure the stability and reliability of the system going forward, and that we shouldn’t see several-day outages like those in February earlier this year. IT has modularized the system with this update, and is backing up everything three times daily.

MTAC · PostalOne! · SOX · USPS

While the Postmaster General and Congress debate the fiscal future of USPS, other communication from the Postal Service has been quiet. What’s going on behind those closed doors?

Required SOX compliance

Part of the Postal Accountability and Enforcement Act (PAEA) of 2006 requires that USPS be compliant with Sarbanes-Oxley section 404 by the end of the 2010 fiscal year. This means that by the end of September, the Postal Service must have its internal accounting ducks in a row.

What SOX means for mailers

In theory, SOX section 404 only describes the internal accounting measures the USPS must apply. However, some acceptance facilities incorrectly interpreted the new rule, and started applying SOX regulations to mailers’ paperwork as well. Fortunately most of those misinterpretations have been corrected. Mailers can continue to process their mailings as they have in the past. However, any manual corrections to the printed paperwork should follow standard accounting procedures. This means drawing a single line through the incorrect information, writing in the correct value, and initialing the change. However this does not apply to Form 8125 for drop ship mailings – the 8125 must be submitted without any manual corrections.

In order to get their financial house in order, USPS has enacted a “change freeze”. This means that sorting rules, prices, and other regulations will not change until the freeze is over, likely in October. With the current state of USPS, expect a big list of changes to be announced as fall approaches.

PAEA · SOX · USPS