As published in the December 1, 2011 Toledo Business Journal
Dan Davis,
Toledo Postmaster
Postal service examining
local changes
Toledo Business Journal recently interviewed Toledo Postmaster Dan Davis. He shared the following thoughts.
Toledo Business Journal: Can you discuss the issue of possible post office closings in the Toledo area?
Dan Davis: We have identified five finance stations – small retail branches of post offices – within Toledo that are under review. Should the offices be closed, the workload will be absorbed by other operations of the overseeing post office. Those offices are Manhattan 43698, Midtown Toledo 43607, Old West End Station 43620, Point Place Station 43611, and Station A 43605.
These actions are being taken as a result of an intensive management review of all postal operations in an attempt to maximize efficiencies and hold down operating costs. Economic conditions have placed the Postal Service in a serious financial position. Continuing weak business growth gave us a $5.1 billion loss this past fiscal year.
We have an obligation to postal ratepayers to be prudent with our expenses while providing the best possible service.
These particular units have been chosen for a variety of reasons, including the proximity of other postal retail units and our ability to provide alternative services, limited hours of operation, general costs, the ratio of expenses to revenues, and the amount of customer usage. Additionally, each of these facilities is leased by the Postal Service.
We will contact local business users and consumers to ensure we get input and feedback as to how we can continue to meet their postal needs in view of these changes.
Delivery of mail is in no way impacted, except for those few customers who rent post office boxes in these facilities. They will be given the option to retain their PO box number and ZIP code for two years, while having their physical box located in the next nearest location.
TBJ: Can you discuss the issue of the possible closing of the mail processing facility in Toledo and its impact?
DD: The Postal Service is facing the most critical period in its history. With the economic downturn and increased diversion to the Internet, mail volumes have dropped drastically. Even when the economy recovers, mail volume is not expected to return to previous peak levels. The mail volume decline has left the Postal Service with a mail-processing network that is too large for the amount of mail it now processes.
The Postal Service is continually improving efficiencies by making better use of space, staffing, equipment, and transportation to process the nation's mail. Improving efficiencies has become increasingly important, given the significant reduction in the amount of first-class mail that enters the postal system. In fact, since 2006, first-class mail has declined by over 22%. During this same time period, deployment of state-of-the-art automated mail-processing equipment has enabled more efficient processing than ever before. In many cases, mailers are increasing sortation and entering into the postal system closer to its final delivery point, thereby bypassing many postal processing and transportation operations.
These factors have created considerable excess processing capacity at many postal facilities where mail is canceled and sorted, which is why the Postal Service is actively looking into opportunities to increase efficiency by consolidating mail-processing operations.
For decades the Postal Service expanded its network and infrastructure to accommodate a growing nation and an exponential increase in mail volume. The nationwide expansion resulted in more vehicles, processing facilities, processing equipment, and employees. Through network optimization, the Postal Service can adapt its network and infrastructure to the realities it’s facing today – that for the first time in its history, the Postal Service must significantly reduce capacity across the board. To that end, the Postal Service is conducting area mail processing (AMP) studies across the nation to evaluate the consolidation of mail-processing operations.
An AMP study involves reviewing mail-processing facilities to determine the feasibility of consolidating operations to improve overall operational efficiency and/or service. An AMP study may involve the consolidation or closure of a mail-processing facility in order to increase efficiency with regard to equipment, facilities transportation and work hours.
We recognize the significant employee and community concerns associated with any potential change in postal operations. As we go forward with our AMP studies, you can be assured we will seek the public’s input and give full consideration to any concerns before making a decision.
TBJ: Can you explain the postage increase that is set for January 2012? Which rates will change?
DD: Postal Service shipping services prices will increase by 3.6%, on average. Some prices will increase more than 3.6% and some less. Unlike other mailing and shipping companies, the Postal Service does not impose surcharges for fuel, residential, or Saturday delivery.
TBJ: Can you discuss plans for the implementation of the Intelligent Mail barcode and its benefits?
DD: Intelligent Mail products and services use machine-readable codes, such as barcodes, to uniquely identify mail. This enables large mailers to follow the progress of their mail through the many stages of processing all the way to delivery. This information can help businesses better manage their resources, reduce operating and marketing expenses, adapt to market conditions, increase efficiencies, and be more responsive to customers.
Confirm Service, the Postal Services' first Intelligent Mail service, is being used today to meet the business needs of the mailing industry. Financial institutions, credit card companies, and retailers are using Confirm Service to know when their customers receive fulfillment orders, increase customer response rates, and know in advance who is returning payments.
TBJ: Are there any new products or services being planned for business customers of the post office?
DD: Commercial base pricing is a newer product available to shippers who use online and other authorized postage payment methods. Commercial base prices are available for express mail, priority mail, global express guaranteed, express mail international, and priority mail International products.
Compared to retail prices, commercial base pricing can save shippers from 5-10%, depending on the product.
Greater discounts are available through commercial plus pricing, which applies to large-volume shippers who qualify for commercial base pricing. For example, an express mail customer must ship more than 5,000 pieces in the previous four quarters or have a customer commitment agreement with the Postal Service to receive the discount.