<ul><li>An Overview of the Postal Accountability and Enhancement Act </li></ul><ul><li>April 2008 </li></ul>
Agenda <ul><li>What the new law says and how we got to this point </li></ul><ul><li>Why Congress wrote this law </li></ul>...
Background: What is the Postal Service? <ul><li>A government agency, but run like a business </li></ul><ul><li>No taxpayer...
Background:  Postal Reorganization Act <ul><li>Governed Postal Service from 1971-2006 </li></ul><ul><li>Independent, busin...
Postal Act of 2006 <ul><li>Postal Service has the same mission – universal service at affordable prices </li></ul><ul><li>...
Postal Act of 2006: Products <ul><li>Creates 2 product categories – Market Dominant and Competitive, or “Mailing Services”...
Postal Act of 2006: Products, cont. <ul><li>No price cap  </li></ul><ul><ul><li>Market forces keep prices competitive </li...
Postal Act of 2006: Transparency  <ul><li>Quarterly and annual financial reporting, like a publicly traded company </li></...
Postal Act of 2006: Transparency, cont. <ul><li>Service Standards issued in December 2007 </li></ul><ul><ul><li>USPS requi...
Postal Act of 2006: Oversight <ul><li>PRC has expanded powers </li></ul><ul><ul><ul><li>Can subpoena records </li></ul></u...
Postal Act of 2006: Impact on Postal Service <ul><li>Need to control costs </li></ul><ul><ul><li>CPI Cap </li></ul></ul><u...
Postal Act of 2006: Impact on Customers <ul><li>Work with customers to reduce costs </li></ul><ul><ul><li>Address hygiene,...
Postal Act of 2006: More Issues/Studies <ul><li>Universal Service study </li></ul><ul><li>Monopoly </li></ul><ul><li>Look ...
Postal Act of 2006 <ul><li>Questions? </li></ul>
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April 18th Presentation To Northern Ohio Pc Cs Pl 109 435

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An Overview of the Postal Accountability and Enhancement Act

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April 18th Presentation To Northern Ohio Pc Cs Pl 109 435

  1. 1. <ul><li>An Overview of the Postal Accountability and Enhancement Act </li></ul><ul><li>April 2008 </li></ul>
  2. 2. Agenda <ul><li>What the new law says and how we got to this point </li></ul><ul><li>Why Congress wrote this law </li></ul><ul><li>What it means for the Postal Service </li></ul><ul><li>What it means for you, our customers </li></ul><ul><li>Bottom line – same mission for the Postal Service </li></ul>
  3. 3. Background: What is the Postal Service? <ul><li>A government agency, but run like a business </li></ul><ul><li>No taxpayer money for operations, funded by you, our customers </li></ul><ul><li>700,000 employees </li></ul><ul><li>Hundreds of processing facilities, over 30 thousand Post Offices </li></ul><ul><li>Deliver to every address in the nation – universal service </li></ul><ul><li>Challenge of postal policy: provide universal service, maintain network, and keep prices down </li></ul>
  4. 4. Background: Postal Reorganization Act <ul><li>Governed Postal Service from 1971-2006 </li></ul><ul><li>Independent, business-like organization, phased out subsidies </li></ul><ul><li>Break even mandate - a requirement and guarantee </li></ul><ul><li>Model – increasing mail volume + monopoly to support universal service </li></ul><ul><li>1990’s – model started to break down </li></ul><ul><li>Postal Service cut costs through automation and worksharing but policymakers wanted longer term change </li></ul>
  5. 5. Postal Act of 2006 <ul><li>Postal Service has the same mission – universal service at affordable prices </li></ul><ul><li>More businesslike </li></ul><ul><li>Main aspects of law </li></ul><ul><ul><li>Incentives to control costs </li></ul></ul><ul><ul><li>More flexibility in pricing </li></ul></ul><ul><ul><li>More transparency </li></ul></ul><ul><ul><li>More oversight </li></ul></ul>
  6. 6. Postal Act of 2006: Products <ul><li>Creates 2 product categories – Market Dominant and Competitive, or “Mailing Services” and “Shipping Services” </li></ul><ul><li>Priority Mail </li></ul><ul><li>Express Mail </li></ul><ul><li>Bulk Parcel Post </li></ul><ul><li>Bulk International Mail </li></ul><ul><li>First Class Mail </li></ul><ul><li>Periodicals </li></ul><ul><li>Standard Mail </li></ul><ul><li>Single Piece Parcel Post </li></ul><ul><li>Media Mail </li></ul><ul><li>Bound Printed Matter </li></ul><ul><li>Library Mail </li></ul><ul><li>Special Services </li></ul><ul><li>Single Piece International </li></ul>Shipping Services Mailing Services
  7. 7. Postal Act of 2006: Products, cont. <ul><li>No price cap </li></ul><ul><ul><li>Market forces keep prices competitive </li></ul></ul><ul><li>30 days notice required by law </li></ul><ul><li>Price floor – must make reasonable contribution to overhead costs </li></ul><ul><li>Regulated with price cap </li></ul><ul><ul><li>No longer a break even requirement </li></ul></ul><ul><li>Price Cap based on CPI </li></ul><ul><li>45 days notice required by law prior to price changes </li></ul>Shipping Services Mailing Services
  8. 8. Postal Act of 2006: Transparency <ul><li>Quarterly and annual financial reporting, like a publicly traded company </li></ul><ul><li>By 2010, must comply with Sarbanes Oxley, section 404 </li></ul><ul><ul><li>Requires USPS to document processes and controls </li></ul></ul><ul><li>Annual compliance report, evaluated by the PRC </li></ul>
  9. 9. Postal Act of 2006: Transparency, cont. <ul><li>Service Standards issued in December 2007 </li></ul><ul><ul><li>USPS required to issue proposed service standards for mailing services </li></ul></ul><ul><ul><li>With a plan for how to measure performance </li></ul></ul><ul><ul><li>Issued after working with customers through MTAC – Mailers Technical Advisory Committee </li></ul></ul><ul><ul><li>Intelligent Mail is important for measurement </li></ul></ul><ul><ul><li>By June 2008, USPS will issue plan for how to meet these standards, including any changes in the network </li></ul></ul>
  10. 10. Postal Act of 2006: Oversight <ul><li>PRC has expanded powers </li></ul><ul><ul><ul><li>Can subpoena records </li></ul></ul></ul><ul><ul><ul><li>Enforcement: may levy fines for noncompliance </li></ul></ul></ul>
  11. 11. Postal Act of 2006: Impact on Postal Service <ul><li>Need to control costs </li></ul><ul><ul><li>CPI Cap </li></ul></ul><ul><ul><ul><li>Can lose money on mailing services if costs are higher than inflation </li></ul></ul></ul><ul><ul><ul><li>Costs going up faster than cap – fuel, benefits </li></ul></ul></ul><ul><ul><ul><li>Retiree Health Benefits Fund </li></ul></ul></ul><ul><ul><ul><ul><li>Payments of $5.4 billion to $5.8 billon per year for 10 years </li></ul></ul></ul></ul><ul><ul><li>Need to work with customers to reduce costs </li></ul></ul><ul><li>Implementation </li></ul><ul><ul><li>Price changes approved – May 12, 2008 implementation </li></ul></ul><ul><ul><li>Service Standards </li></ul></ul>
  12. 12. Postal Act of 2006: Impact on Customers <ul><li>Work with customers to reduce costs </li></ul><ul><ul><li>Address hygiene, reduce UAA mail </li></ul></ul><ul><li>Predictability of price increases – more frequent, smaller changes tied to CPI </li></ul><ul><ul><li>Avoid rate shock </li></ul></ul><ul><li>Transparency – service standards and measurements </li></ul><ul><li>More innovation – respond to market changes and your needs by rolling out new products faster </li></ul><ul><ul><li>Innovative pricing and products, contract pricing </li></ul></ul>
  13. 13. Postal Act of 2006: More Issues/Studies <ul><li>Universal Service study </li></ul><ul><li>Monopoly </li></ul><ul><li>Look for announcements on the PRC’s website, PRC.gov </li></ul><ul><li>PRC will hold hearings and invite public comment </li></ul>
  14. 14. Postal Act of 2006 <ul><li>Questions? </li></ul>

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