Second Day Report

Daniel G. Blair, administration-appointed chairman of the Postal Regulatory Commission detailed how his 55-person staff has moved mountains in reorganizing the former PRC following congressional mandates in the Postal Accountability and Enhancement Act of (late) 2006. In short order they made progress on an impressive set of goals and milestones which can be found in the all new www.prc.gov. He foreshadowed Spring ’08 changes by USPS in its Network of facilities (BMCs, SCFs and the like), a sensitive review of the subsidy or cost underpinning for periodicals (founding fathers, do you hear us?), and the introduction of new Flat Sequencing System (FSS) machines capable of doing catalog-magazine sortation for mail carriers at the rate of 250,000+ pieces per machine per day.

A panel which followed danced around the likelihood of rate incentives (and counterbalancing rate dis-incentives) which follow the introduction and combination of FSS, Intelligent Mail Barcode (IMB), FAST reservations and eDocumentation. There is a chicken and egg relationship between the adoption of new best practices and the perceived value to do so. This is probably not a Field of Dreams package – in other words, unless rates are set to a perceived advantage, only the philanthropic and beta testers will come. So far no indication of the kind of guidance mailers will get, or the lead time they’ll have prior to a Fall ’08 implementation.

The morning panel on Retail distribution included a mini tutorial on trucking fuel rate surcharges (which do you want – low base rate and high surcharges or higher base rate and low surcharges?). Driver shortages in Canada and the US, coupled with the cost of border delays (post 9/11) between the two largest trading partners. Transportation Safety Administration expansion of surveillance beyond airline passengers to broader freight screening. And a set of magazine newsstand trends that make the aphorism (“Is Flat the New Up?”) particularly appropriate.

Bob Costello, VP and Chief Economist for the American Trucking Association gave a lucid discussion of freight supply and demand in relation to the overall economy. In his and others’ view the congressional rebate stimulus will have a desired effect in the second half of ’08 but further fleet reductions, another round of EPA emissions standards for engines, the reverse relationship of diesel to gasoline prices, fuel costs – abetted by underlying weakness of the dollar and speculation in commodities – will contribute long term to a freight rebound and the consequent effect on the transportation of printed matter.

Ben Cooper, NAPL and DMA’s point man on mail-related legislative affairs described the coalition building which will keep pressure on to defeat state initiatives on Do Not Mail. Though we can’t declare victory on DNM, right around the corner is a national harmonization of sales tax practices including beating down a tax on postage, and also a set of late ’08 early ’09 activities related to Global Warming and in part directed at US paper manufacture and recycling.

Concurrent Breakout Sessions probed retail distribution and sale trends in depth, drilled down on the new postal ratemaking process, and pondered anew how the USPS and industry can articulate measurable and accountable Service Standards, by mail subclass, origin entered or re-entry, with enough completeness and granularity to allow rapid diagnosis, feedback and improvement.

-- Bob Whitton, R&E Council of NAPL