Pat Donahoe

As direct marketers, we're closely watching the changes at the United States Postal Service. Discussions about full-service requirements, the consolidation of facilities, elimination of Saturday delivery, proposed exigent rate increases on top of the annual CPI-capped increases, and the ongoing battle over postal reform continue. The decisions made on these issues will have a lasting impact on mailers.

The U.S. Postal Service reiterated this past week—in hearings before the House Oversight and Government Reform Committee—just how crucial it is that Congress undertake reforms that are necessary for the USPS to accrue the savings to restore its fiscal state. There should be no "half measures," Postmaster General (PMG) Pat Donahoe stated

The U.S. Postal Service has slated three post offices in the Capitol building and the surrounding House offices for closure by the end of August, citing declining revenue and mail volume at the offices. USPS issued final determinations Wednesday to close three Capitol Hill post offices by August 23, which is expected to save about $2 million over the next 10 years. That's only a drop in the bucket in the agency's stretched-thin budget, but top House Republicans on the Administration and Oversight and Government Reform Committees hailed the move for sending a strong message. "Congress should lead by example

The U.S. Postal Service reported a fiscal 2012 net loss of $15.9 billion, 6 percent greater than its own projection of $15 billion. Overall mail volume fell by 5 percent, primarily in First Class. The USPS also has noted Oct. 15, 2013, as the date it will run out of cash. ... During the USPS’s Board of Governors meeting ... Postmaster General Pat Donahoe said the big financial loss “has nothing to do with the value of the mail—only due to our restrictive business model. Ideally, comprehensive legislation [Postal Reform] can be accomplished in this lame duck session.”

The Postmaster General at the 2011 Postal Forum acknowledged that as mail volumes grew during the 2000’s there was an underlying weakness in market fundamentals that postal management didn’t recognize. I believe the deteriorating market fundamentals he mentioned were the massive loss of small and medium sized mailers (SMMs) from the mail stream. As financial services companies ramped up direct mail marketing campaigns that drove mail volumes higher, the total number of customers substantially decreased.

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