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EcommerceBytes-NewsFlash, Number 2825 - June 13, 2012 - ISSN 1539-5065    3 of 3

Despite Financial Woes, Postmaster General Hopeful for USPS Future

By Kenneth Corbin
EcommerceBytes.com
June 13, 2012




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WASHINGTON - Postmaster General Patrick Donahoe on Tuesday offered a cautiously hopeful vision for remaking the U.S. Postal Service into a sustainable entity for the digital age, so long as it can win the blessing of Congress and its employee unions to restructure its crippling labor costs.

In a keynote address here at the second annual PostalVision 2020 conference, Donahoe touted the key role the agency he oversees plays in an array of industries, ranging from paper products and forestry to logistics and printers. Much of his optimism for the future of the Postal Service is staked on the growth in the agency's parcel business that has been a more or less direct byproduct of the surge in online shopping.

"The whole value chain is extremely important to this American economy," he said. "And when you add the opportunities for the big, explosive growth in ecommerce with the package business, we think that we still will play an extraordinary, important role in that going forward."

But at a conference devoted to reimagining the Postal Service for the long term, Donahoe acknowledged that any realistic vision of sustainability will require significant changes, many of which will take an act of Congress.

Donahoe has been appealing to lawmakers to enact legislation that would reduce the Postal Service's obligation to prefund employees' retirement health benefits and to gain access to an overpayment to the Federal Employee Retirement System. The Postal Service is also proposing to scale back its delivery schedule to five days a week.

"We've just lost way too much in First Class mail to sustain six-day delivery," Donahoe said.

However, he said that the Postal Service is actually considering expanding its delivery options for packages, suggesting that the agency could offer night-time and even Sunday delivery.

"We are in an excellent position to make that happen," he said. "We have the largest reach in the world as far as packages go."

At the same time, the rise in the package business, where the Postal Service both partners and competes with commercial providers, has not been enough to offset the sharp decline in First Class mail, the agency's most profitable product.

The Postal Service scored something of a victory when the Senate passed a sweeping reform bill that would ease its financial obligations, but progress has been slow on the House side. Speaking with reporters after his speech, Donahoe said that House Majority Leader Eric Cantor (R-Va.) had indicated the members of the lower chamber could resume consideration of proposals to overhaul the Postal Service as early as this month.

Donahoe also put in an emphatic plug for the mail as a medium for marketers. Amid a diverse media mix that includes television, radio and the Internet, Donahoe argued that mail remains an indispensable vehicle for reaching potential customers.

"The mail is still the most direct way to get in front of a customer's eyes. Period. Exclamation point," he said. "There is a tremendous opportunity and upside of putting a really nice piece of mail in a person's mailbox."

About the Author
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects for more than four years, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here .

About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.

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