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Mailers react to USPS’s veto of rate relief

Posted by | Jun 26, 2007 | |

The mailing community is disappointed that the Governors of the U.S. Postal Service failed to provide relief for the millions of commercial mailers who are being hit with massive, unplanned increases in postage costs.

The Postal Regulatory Commission’s “Second Opinion and Recommended Decision on Reconsideration,” issued May 25, established a transitional temporary rate reduction of 3 cents for all Standard Mail Regular flats and 2 cents for Standard Regular nonprofit flats. In a vote during the Board of Governors’ closed meeting on June 19, the Governors decided not to implement the temporary change.

On March 19, the Governors asked the PRC to reconsider some of the prices originally recommended on Feb. 26 and implemented on May 14 because they were concerned that price increases recommended by the PRC may impose an unnecessary degree of “rate shock” on the catalog industry and small businesses particularly. The recommended increase for some catalog mailers is as much as 40 percent, which is more than double what the USPS proposed.

Mr. Cerasale noted that a ripple effect is already being felt by flat-shaped mailers as well as by the downstream companies that provide mailing services and supplies.

In its reconsideration proposal, the USPS had asked for a 3-cent reduction in piece rates for Standard Regular flats offset by a 0.7 cent increase in piece rates for most Standard Mail Regular letters. The USPS reasoned that this was appropriate because under the breakeven requirement of the Postal Reorganization Act, lower rates for similar categories must be offset by higher rates for others.

James C. Miller, chairman of the USPS Board of Governors said the approach suggested by the [PRC] would result in breakeven within the test year, if the effective dates for selected rate changes were changed outside of the test year.

Mr. Miller said the PRC estimated that the cost to the USPS of its recommendation would be $100 million.

Another issue was the difficulty in implementing the PRC’s recommendation.

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UK regulator must balance competition and obligation

Posted by | Jun 26, 2007 | |

Postcomm, the regulator created in 2000 to oversee the postal market’s opening up to competition, has two tasks to balance.

The first is to develop a competitive market and ensure that Royal Mail, the former monopoly, does not stifle rivals. The second is to preserve the universal service obligation, allowing anyone in the UK to post letters and parcels to any other part of the country at the same affordable rates.

So far, it has managed to meet both these targets.

Postcomm’s strategy re-view, set up last summer, is examining policy options and is expected to publish its preliminary thoughts within a few weeks.

These will include whether it should require the separation of Royal Mail’s retail arm, which collects and sorts post, from the wholesale operation that delivers the mail for it and other postal operators.

It is also asking whether changes are needed to the universal service obligation, which covers more than half the post – including much of the bulk mail sent by business users.

This guarantees daily delivery of mail for every UK household and business, six days a week, and one collection per day, every day except Sunday.

Royal Mail has already requested a change in its licence in order to limit the obligation to stamped mail, which is about 10 per cent of the total, saying the present rules hinder its ability to compete with private sector operators.

Sarah Chambers, Postcomm’s chief executive, appeared sympathetic to the request in her address to Institute of Economic Affairs conference on the future of the postal services.

The strategic review is considering reducing the number of products covered by the obligation as growing competition begins to increase the choices available to users.

She said Postcomm was exploring reducing the obligation to deliver to the front door six days a week. Such changes would require amendments to the Postal Services Act, which opened the mail to competition.

The European Union directive on postal services specifies that countries should maintain a universal service every working day, but other European countries have limited their coverage to Monday-to-Friday.

Ms Chambers told the conference that lifting the requirement to deliver on Saturday would not stop weekend deliveries, while retaining it could fetter the development of better services – including, possibly, Sunday deliveries by some mail companies.

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Small pay increase for transport and logistics managers

Posted by | Jun 26, 2007 | |

Transport and logistics managers in Britain received the lowest pay increases of any sector last year, with an average rise of just 2.6 per cent, new figures reveal.

The survey of managers in Britain found that the country is facing an ‘executive recruitment crisis’, that places the growth prospects of businesses at risk.

According to the Chartered Management Institute, the number of managers in the UK choosing to quit their jobs to seek alternative employment rose by 50 per cent last year.

The report on an annual poll of 42,000 managers claims that low wage rises are to blame for poor management retention rates at UK companies, with 81 per cent of firms reporting problems with recruitment.

Jo Causon, Chartered Management Institute director of marketing and corporate affairs, said: “The steep climb in organisations reporting recruitment difficulties, mixed with an increasing number of resignations should be ringing alarm bells for employers.”

Average earnings across all sectors rose by 5.3 per cent over the past 12 months to GBP 47,449, down from 5.7 per cent the previous year and the lowest pay rise in Britain since 1996.

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