5-Day Delivery: Cost Cutting or Congressional Gambit?

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the 5-Day Delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the five-day delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here.

We all know that it is Congress and the White House—as a whole, not any lawmaker in particular—that largely caused the Postal Service’s recent default and current fiscal mess. Their inability or unwillingness to stop the mandating of 75-year pre-funding of USPS retiree benefits, and the subsequent raiding of those funds for the federal government’s own spending sprees elsewhere, deserves much of the blame.

Cost-cutting and diminishing services to U.S. citizens have been forced on the Postal Service, because a “fiscal cliff” already has arrived at L’Enfant Plaza.

Yes, there are other macroeconomic issues in play at the Postal Service—the digital migration of First-Class Mail, electronic payments and the Great Recession’s most recent effects and after-effects, for example. All the same, forcing such draconian budget mandates on the Postal Service is a serious miscalculation that was (unfortunately) included in the 2006 postal reform law. No other federal agency is held to the same pre-funding benchmark, and even fewer responsibly financed and accountable private pension schemes (there are still a few around) ever look to seven decades to the future.

This needed fixing five years ago, when the economy started to teeter and such rosy views of postal finances quickly began to sour. Here we are in 2013, and we’re still waiting for Congress to act.

The White House hasn’t been helpful either.

Now we’re faced with five-day delivery come August—and we’re left wondering if it can be stopped, reversed, prevented or mitigated, even if Congress and the White House were able and wished to intervene.

Will the reported $2 billion in said-savings really transpire—and make a difference? Has anyone considered the economic trade-offs? We all know many weekend advertisers that relish a spot in the mailbox on Saturdays—and this generates a lot of commerce. Can it all be simply pushed to a Friday?

The reality is that the Postal Service, as much as it seeks to manage itself as a business, remains a quasi-public institution, a part of our Constitution, and subject to both cycles of Congressional meddling and Congressional relief, the latter now being in short supply.

It’s quite amazing that the Postal Service is as efficient and as affordable as any postal service in the world, public or private—delivering communications to our homes six days a week. Still, it must deal with political representation that well may be intended, but which only seems to punt from crisis to crisis—or worse, after each crisis has rendered its most devastating effects.

Here we are in a downward cycle … again. This time our daily mail—and direct mail advertising along with it—is being expedited, by Congress, to the dilemma faced by dying daily newspapers in stagnant metropolitan markets—going, going, gone, at least on Saturdays.

Except this is our Postal Service, belonging to the citizens of the United States on paper. Is this squeeze on hardcopy communication inevitable—and our only choice? Or will some in Congress and the Obama Administration wake up to the fact that the Postal Service is a secret weapon for many brands (and political candidates), as well as a service to its citizens, and, therefore, do all their Constitutional best to ensure a viable future here?

By the way, I LOVE this recent piece in Esquire—required reading for our lawmakers: http://www.esquire.com/print-this/post-office-business-trouble-0213?page=all.

USPS ‘Green Teams’ Net $58 Million – If Only Government Postal Policymakers Were So Innovative

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer. Posted Feb. 24, I include the full text of the press release here, followed by some commentary: Green Teams Help Postal Service Save Millions

The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.
—USPS Press Release (February 24, 2012)

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer.

Posted Feb. 24, I include the full text of the press release here, followed by some commentary:


Green Teams Help Postal Service Save Millions

WASHINGTON, Feb. 24, 2012 /PRNewswire-USNewswire/ — The U.S. Postal Service saved more than $34 million and generated $24 million in 2011 by reducing energy, water, consumables, petroleum fuel use and solid waste to landfills, conservation efforts encouraged by the Go Green Forever stamps. The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.

“Across the country, postal employees are participating in more than 400 lean green teams. Motivated by our sustainability call to action, ‘leaner, greener, faster, smarter,’ they are producing significant results in energy reduction and resource conservation,” said Thomas G. Day, Chief Sustainability Officer.

Lean green teams are another way the Postal Service fosters a culture of conservation, and builds on the agency’s long history of environmental and socially responsible leadership. The teams help identify and implement low- and no-cost sustainable practices to help the Postal Service meet the following goals by 2015:

— Reduce facility energy use by 30 percent,

— Reduce water use by 10 percent,

— Reduce petroleum fuel use by 20 percent, and

— Reduce solid waste by 50 percent.

According to Day, the Postal Service plans to deploy lean green teams nationwide in 2012 to help achieve these goals.

“With more than 32,000 facilities, a presence in every community, and the largest civilian fleet in the nation, we know how important our efforts are to make a positive impact on the environment,” Day added. “Our lean green teams are an important part of our conservation culture, and the effort to reduce our carbon footprint.”

The Postal Service buys sustainable materials and works to reduce the amount of supplies it purchases. The agency first developed a “buy green” policy more than 13 years ago, and has a goal to reduce spending on consumables 30 percent by 2020. Additionally, the Postal Service is working to increase the percentage of environmentally preferable products it buys by 50 percent by 2015. Environmentally preferable products are bio-based, contain recycled material, are eco-labeled and are energy and water efficient.

In its shipping supplies, the Postal Service uses post-consumer recycled content materials, which are diverted from the waste stream, benefiting the environment and helping customers go green.

The Postal Service has won numerous environmental honors, including the U.S. Environmental Protection Agency’s (EPA) WasteWise Partner of the Year award in 2010 and 2011, the EPA’s National Partnership for Environmental Priorities award in 2011 and the Climate Registry Gold award in 2011.

USPS is the first federal agency to publicly report its greenhouse gas (GHG) emissions and receive third-party verification of the results. For more information about the Postal Service’s sustainability initiatives and the Go Green Forever stamps, visit usps.com/green and the usps green newsroom.

USPS participates in the International Post Corporation’s Environmental Measurement and Monitoring System, the global postal industry’s program to reduce its carbon footprint 20 percent by 2020 based on an FY 2008 baseline.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 151 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, the U.S. Postal Service was ranked number one in overall service performance, out of the top 20 wealthiest nations in the world, Oxford Strategic Consulting. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

SOURCE U.S. Postal Service

Thank you very much Thomas Day and thank you to each member of the 400 lean green teams at USPS.

Further, the $58 million in bottom-line gains were an improvement over the $27 million in such benefits reported by USPS a year ago. That’s more than double the financial improvement.

As a blueprint for other businesses, many with “green teams” of their own, this USPS announcement offers item-by-item suggested areas of operation companies might focus on to accrue bottom-line gains: facility energy use, water use, fuel use and solid waste generation and diversion.

Perhaps too many business leaders and marketing practitioners still equate sustainability initiatives with “do-good, feel-good” activities that are nonetheless costly or associated with premiums. They best start thinking otherwise. The more quickly brands can leverage green teams for operational gain, and incorporate sustainability as the next great wave of business cost-savings and innovation, the better off their bottom lines will be.

USPS is proving to all of us that there is a “lean” in “green,” and that waste and inefficiencies are cost centers that must be managed. The environmental gains that are driven by such successful management are numerous, and very well may engender good will among employees and customers. Nothing wrong—and everything right—with that, particularly when the financial bottom line benefits are so demonstrable.

Some skeptics might still say, with billions in deficits, USPS cost-savings announcements tied to sustainability are akin to rearranging deck chairs on the Titanic. I believe, however, that USPS management does have a business-like approach to fixing its finances in a digital age, has put forth a credible path to do so, and Congress and The White House need to be facilitating these decisions instead of standing in the way.

Unfortunately, Congress and The White House happen to be two U.S. institutions that are very challenged by balancing budgets.

The Congressional cry of “not in my backyard” over post office closures is part of that symptom, particularly when the USPS has proposed many retail outlet alternatives that are more convenient to citizens, and far less costly to postal ratepayers. The recent Congressional moratorium until May 15 toward consolidation of mail processing facilities is another cog in the cost-savings wheel. Meanwhile, the White House just can’t seem to let go of forcing through a 2010 “exigency” postal rate increase (in its current, proposed federal budget) that, in effect, undermines the entire rationale and integrity of indexed rate caps built into the 2006 postal reform law.

Perhaps there needs to be “lean green teams” at work inside the policymaking offices of Congress and the White House, too. Certainly, sustainability concepts—environmental, social and financial—could work to extraordinary effect inside government, just as it’s doing in forward-thinking businesses everywhere, and trying to do with great success inside the U.S. Postal Service.

Helpful Links:
USPS Press Release covering Green Teams in 2011

USPS Press Release covering Green Teams in 2010