Dan G. Blair

Chairman of the Postal Regulatory Commission

A mid fiscal year assessment

As we pass the mid-point in Fiscal Year 2009, the Commission continues making progress in putting into operation the regulatory framework envisioned by the Postal Accountability and Enhancement Act.

The Commission’s Annual Compliance Determination (ACD), released on March 30, provides an in-depth examination of Postal pricing results, service performance, and financial transparency and compliance for Fiscal Year 2008. Importantly, this ACD review was conducted at a time when the Postal Service faced continuing mail volume and revenue declines, while achieving positive service and performance results.

The ACD finds the Postal Service at a critical juncture, with its near-term liquidity threatened by falling demand and revenue declines that are outpacing its cost-control efforts. The Postal Service must carefully balance its budget goals against customer requirements for quality service that provides market value. The recovery and future prosperity of the U.S. postal system depend on mail products remaining attractive and compelling values, especially in a difficult economy and in markets that are under considerable stress.

In particular, the Commission urges the Postal Service to move forward with its network reorganization plan to streamline its infrastructure and reduce costs and to move quickly to leverage the capability of the Intelligent Mail Barcode (IMb) so that mail performance measurement can be expanded to drive service improvements and innovation. The Commission, through its ongoing regulatory oversight of postal operations and finances, will continue to assist the Postal Service in exercising its flexibility as envisioned by the PAEA.

The U.S. mailing community is also doing its springtime best to deal with the economic downturn and prepare for future growth. On April 5, I had the opportunity to speak with mailers at MAILCOM ’09, one the nation’s leading mail forums and exhibitions. As I discussed with the attendees the work of the Commission and the current operating results of the Postal Service, I was impressed by their dedication to the future of the mail. I especially appreciated the many training courses devoted to the IMb, which served as a reminder that an effective partnership among mailers and the Postal Service has long been a key pillar in the success of the U.S. mail system. I expect to see a similar synergy at the National Postal Forum when it opens on May 17 at the Convention Center in Washington DC.

On April 16, the Commission issued final rules on the form and content of periodic reports provided by the Postal Service to the Commission. These regulations foster timely reporting of essential financial and operating information by the Postal Service to enhance transparency under the PAEA.

Piquing recent mailer interest is a proposal being floated by the Postal Service concerning a “stimulus package” for the mail industry. Industry press have reported that the Service is contemplating a filing with the Commission regarding a “summer sale” providing Standard mailers with incentives to mail additional volume during the typically slow volume summer months. The Commission will review the filing subject to the 45-day requirement as provided in the PAEA. Stay tuned, as more details are certain to emerge.

Sincerely,

Dan G. Blair
Chairman