"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 21 st
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 21 st
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
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.
Presidential Postal Commission News page
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