From the Corner Office - The Postal Accountability and Enhancement Act

 

Can You Name a 74 Billion Dollar Company or Organization:

 

  1. Whose major competitors were able to have a strong voice in setting pricing? 
  2. Who are not allowed to lobby or contribute funds to politicians at all levels of government?
  3. Where rank and file employee wages are set by arbitrators or negotiated under threat of arbitration, and whose benefits are set by law?
  4. Where their retail pricing is mandated by law to be less for non profit entities and subsidized by the “for profit” customers?

 

If you guessed the United States Postal Service, you are right.  The business model has long been recognized as broken.  The Postal Service is suppose to act like a business, but it can’t when it is layered in bureaucracy, governed by a regulatory body, constrained with oppressive reporting requirements and restricted pricing models.

 

The Post Office desperately wanted the ability to act more like a business and they, along with their partners, aggressively pushed for changes.  Unfortunately they didn’t get what they asked for; in fact the political process transformed the cause into what we now refer to as the Postal Accountability and Enhancement Act (PAEA).  The Act’s final form was so far from what was requested that the Post Office and the Board of Governors withdrew their support.   

It didn’t matter, the legislative train wreck was on a roll and the PAEA was signed into law on Dec 20th of last year with much fanfare as “Rescuing the Post Office”.  In reality it is going to be a huge challenge for the Post Office to operate within the Act’s guidelines.  I hope that common sense will prevail and the Act will be amended to allow the Post Office to better manage itself - one of the largest operations in the world. 

 The Postal Regulatory Commission (PRC) has just released the new rate setting guidelines early! 

What is now very clear to me is that the USPS will have little choice and will be forced to raise rates on Market Dominate Products at every opportunity.  My reasoning is the faster they enact the rate increases the greater the return.  It is the same reason we want our savings to have its interest compounded daily.   It is the same reason we like our Accounts receivables to be collected quickly:  to take advantage of the time value of money.  The USPS will need every penny it can to conform with the PAEA.

 

If you currently do not have Rate Change Insurance on your Mailing System, you should get it now!  It will save you a lot of time and money while keeping your system current.  Our newest models can get their updates electronically and can be billed as part of their meter rental bill. 

 

If you would like to learn more, give us a call 800-545-0437 or email Sales@SDPostal.com

-Gordon Glazer is the President and Founder of San Diego Postal and Shipping Equipment, Inc., - celebrating their 21st Anniversary.  Mr. Glazer is a nationally recognized Expert in Document Handling, Addressing, Mailroom Design and Mail Processing Systems. He is currently only one of a handful of Vendors to earn the CMDSM certification and is also MQC and CMDSS certified. He is currently the VP of Education for the local MSMA chapter, and is active on the National Education committee for MSMA and is in charge of the Redevelopment of the CMDSM exam.  A graduate of San Diego State University with a Degree in Marketing.

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