Industry Updates

Postal Service Leadership Changes

Postmaster General and Chief Executive Officer, Megan J. Brennan, has announced the following leadership changes:

  • Isaac Cronkhite has been named as Chief Human Resources Officer (CHRO) and Executive Vice President (Acting) effective January 19. Jeff Williamson, prior CHRO has returned to the private sector.
  • Jeff Johnson, Vice President, Information Technology has been named Vice President, Enterprise Analytics (Acting) effective January 19.
  • Pritha Mehra, Vice President, Mail Entry and Payment Technology, has been named Vice President, Information Technology (Acting) effective January 19.
  • Marc McCrery, Director, Delivery and Retail Technology, has been named Vice President, Mail Entry and Payment Technology (Acting) effective January 19.
  • Ed Phelan, Vice President, Northeast Area Operations, has announced his retirement effective February 3.
  • Eric Chavez, District Manager, Suncoast, has been named Vice President, Northeast Area Operations (Acting) effective February 3.

USPS Annual Compliance Report Filed

As required by law, the has USPS filed their Annual Compliance Report.

The report is typically followed by a series of questions by the Postal Regulatory Commission, PRC, and comments from the public.

The report provides insights in what we may see as focus items for the postal service in 2019 and their rate planning efforts for 2020. The PRC will follow this report with an Annual Compliance Determination report that confirms compliance with the Postal Accountability Enhancement Act, PAEA.

 


USPS Vice President, Area Operations, Great Lakes Area – Erica Brix

The Postmaster General and Chief Executive Officer, Megan J. Brennan, announced Erica Brix as Vice President, Area Operations, Great Lakes Area.

For the past year, Erica has served in this role on an acting basis. She led major safety initiatives that resulted in an 8.5 percent reduction in total accidents.

Erica will lead a workforce of more than 77,000 employees, with responsibility for all aspects of operations, marketing, and customer engagement. The Great Lakes Area serves more than 36 million customers across five states and has an operating budget of more than $7 billion.

She was previously the Western Area Manager, Operations Support, and oversaw mail processing and distribution, customer service, and administrative operations. A postal manager for over 30 years, she has held a number of positions of increasing responsibility including Senior Plant Manager, Northland District, with a responsibility for 11 plant facilities and Acting District Manager in Portland, Oregon.

A graduate of the Postal Service’s Advanced Leadership Program, she is also Lean Six Sigma Green Belt Certified. Erica holds a bachelor of science degree in business management from Metropolitan University.


Kubayanda Confirmed for PRC

On January 2, 2019, the Senate – via voice vote – confirmed Michael Kubayanda to fill the open Postal Regulatory Commissioner position formerly held by Ruth Goldway. Mr. Kubayanda’s confirmation hearing can be seen here:  https://www.c-span.org/video/?452363-1/census-bureau-postal-regulatory-commission-nominees-testify-confirmation-hearing. The appointment runs until November 22, 2020.

Mr. Kubayanda serves as a board member and privacy officer for a digital health startup.   Michael previously worked with the Office of Inspector General (OIG) of the U.S. Postal Service, ending as director of government relations, in which he worked with OIG officials to support the work of inspectors general in data analytics.  In the OIG’s research group, he oversaw research on technical issues and wrote reports addressing postal economics and price regulation, intellectual property, and public-private partnerships, while serving as an advisor to colleagues on issues such as privacy, knowledge management, and innovation.  Prior to the OIG, he served on the staff of the House Committee on Oversight and Government Reform.  Michael holds degrees from Georgetown University, Northwestern University, The Ohio State University, and studied at the Graduate Institute in Geneva, Switzerland.

Background: The Commission is composed of five Commissioners. They are appointed by the President, by and with the advice and consent of the Senate, for a term of six years. Not more than 3 of the Commissioners may be adherents of the same political party.

Current Commissioners Term Expiration Date
Chairman Robert G. Taub (R) Oct. 14, 2022
Vice Chairman Tony Hammond (R) Oct. 14, 2018
Commissioner Mark Acton (R) Oct. 14, 2022
Commissioner Nanci E. Langley (D) Nov. 22, 2018
Vacant Nov. 22, 2020

White House Task Force Report on USPS Released

The U.S. Department of the Treasury has released the White House Task Force report on the United States Postal System.  The report, United States Postal System: A Sustainable Path Forward, provides a series of recommendations to overhaul the United States Postal Service’s (USPS) business model in order to return it to sustainability without shifting additional costs to taxpayers.

Below is a summary provided in the U.S Department of Treasury news release. It is unknown if or when the report findings will result in any changes for the United Stated Postal Service.

“The USPS is on an unsustainable financial path which poses significant financial risk to American taxpayers,” said Treasury Secretary Steven T. Mnuchin. “President Trump tasked us with conducting a thorough evaluation of the USPS, and today’s report contains achievable recommendations that fulfill the President’s goal of placing the USPS on a path to sustainability, while protecting taxpayers from undue financial burdens and providing them with necessary mail services.”

Between fiscal year (FY) 2007 and FY 2018, the USPS experienced net losses totaling $69 billion. The USPS is forecast to lose tens of billions of dollars over the next decade. The USPS’s business model—including its governance, product pricing, cost allocation, and labor practices—must be updated in light of its current operating realities.

On April 12, 2018, President Trump issued the Executive Order on the Task Force on the United States Postal System. The Executive Order established a Task Force on the United States Postal System, chaired by the Secretary of the Treasury and including the Director of the Office of Management and Budget and the Director of the Office of Personnel Management.  The Task Force was directed to evaluate the operations and finances of the USPS and to develop recommendations for administrative and legislative reforms that will enable the USPS to create a sustainable business model.

The Task Force’s recommendations include, but are not limited to:

  • Improving governance by strengthening the Board of Governors and developing enforcement mechanisms to ensure financial commitments and reforms are met;
  • Clearly defining the Universal Service Obligation by specifying what are “essential postal services,” or types of mail and packages for which a strong social or macroeconomic rationale exists for government protection;
  • Developing a new pricing model that removes price caps and charges market-based prices for both mail and package items that are not deemed “essential postal services”;
  • Modernizing the USPS’s cost standards and cost allocation methodology;
  • Pursuing cost-cutting strategies that will enable it to meet the changing realities of its business model;
  • Reforming USPS employee compensation in a manner consistent with proposed reforms to the broader federal workforce;
  • Restructuring retiree health benefit liabilities with a new actuarial calculation that is based on employees at or near retirement age;
  • Exploring new services that will allow the USPS to exact value from its existing assets and business lines, but that present no balance sheet risk.

USPS Announces Operations Plan for National Day of Mourning

The United States Postal Service has released the following Industry Alert:

President Donald J. Trump has proclaimed Wednesday, December 5, 2018 as a National Day of Mourning in remembrance of former President George H.W. Bush.  Out of respect for the 41st President of the United States and to honor his vast contributions to our country during his lifetime, and consistent with the Presidential Proclamation, the United States Postal Service will suspend regular mail deliveries, retail services and administrative office activity on December 5.

December 4, 2018

USPS Announces Operations Plan for National Day of Mourning

Updates highlighted below:

President Donald J. Trump has proclaimed Wednesday, December 5, 2018 as a National Day of Mourning in remembrance of former President George H.W. Bush.  Out of respect for the 41st President of the United States and to honor his vast contributions to our country during his lifetime, and consistent with the Presidential Proclamation, the United States Postal Service will suspend regular mail deliveries, retail services and administrative office activity on December 5.

The following are details for USPS business mailers and shippers:

Delivery – Regular mail delivery will be suspended, however there will be limited package delivery consistent with our Peak Season Sunday schedule.

Delivery Destination Units (DDU) – Will accept drop shipments at our Sunday Peak DDU offices only.

Priority Mail Express Mail – Will be delivered as addressed for delivery on December 5.

Retail – All operations will be suspended. Post Offices will be closed.

Collections – Mail will be collected from boxes in front of Post Offices and high volume boxes that have a potential to overflow, while other collections will be suspended.

Package Pickup – We will conduct scheduled commercial mailer pickups. We will not pickup from Contract Postal Units (CPU) and large volume residential shippers should work through their local Post office for arrangements.

Plants – All plant operations , including Network Distribution Centers (NDC) and Sectional Center Facilities (SCF), will operate as scheduled except delivery point sequence (DPS) processing. FAST appointments will be accepted.

Transportation – Air and Surface transportation operate as scheduled, and scheduled dispatches to Post Offices will occur.

Business Mail Entry Unit (BMEU) – The BMEU/Detached Mail Unit (DMU)  in plant locations will be open, while BMEU operations will be suspended at Post Office locations.

Call Center – In operation but may have reduced staffing.

Administrative Offices including Headquarters – These offices will be closed.

Caller Service / Remittance Mail – Is available for pickup at plant locations only.

If you have additional questions, please send them to the Industry Alert mailbox: IndustryAlert@usps.gov where a response will be provided.


Tammy L. Whitcomb Appointed as Third Inspector General

It has been announced that Tammy Whitcomb, acting Inspector General, has been appointed by the USPS Board of Governors as the third Inspector General of the U.S. Postal Service.

The following press release was issued:

WASHINGTON – The Governors of the U.S. Postal Service today announced the appointment of Tammy L. Whitcomb as the third Inspector General of the U.S. Postal Service. The Office of Inspector General conducts audits and investigations to promote efficiency, and detect and prevent fraud, in Postal Service programs and operations.

Ms. Whitcomb has been acting Inspector General since February 2016 and served as Deputy Inspector General since November 2011. She also served as the Assistant Inspector General for Audit. Tammy joined the Postal Service in November 2005 as an Audit Director.

Ms. Whitcomb began her government career at the Internal Revenue Service (IRS) Inspection Service, and transitioned with them as a part of the Treasury Inspector General for Tax Administration (TIGTA), established in early 1999. During her career at TIGTA, she was an Audit Manager in Dallas, TX for several years before coming to Washington D.C. as the Director of the Office of Management and Policy. Ms. Whitcomb holds a bachelor’s degree in Accounting and Business Administration and is a Certified Public Accountant and Certified Information Systems Auditor.

“Ms. Whitcomb has two decades of experience in the IG community, and brings great vision and tenacity to the role of Inspector General of the U.S. Postal Service,” said Robert M. Duncan, Chairman of the Board of Governors. “We look forward to working with her in her role to help safeguard the integrity of the postal system, and in identifying opportunities to improve and enhance the operations of the Postal Service.”


Canada Post Rotating Strike Continues – Impacts to Service

Since October 22, CUPW’s rotating strikes have shut down Canada Post’s operations in more than 200 communities across the Canada.

The “rotating” strike, which are legal strikes that are isolated to one or two specific locations at a time, have started to affect service beyond the anticipated 24-hour period.

While Canada Post has been working hard to maintain service to Canadians, Toronto is a key processing hub for mail and parcels in Canada, causing a significant impact and backlogs for mailers entering mail into Canada.

For the latest information on the strike, and the impacted areas of Canada, visit Canada Posts site at https://www.canadapost.ca/web/en/blogs/announcements/list.page?cattype=announcements&cat=newsreleases


U.S. Postal Service Reports Fiscal Year 2018 Results

On November 14, the United States Postal Service released their fiscal year results for 2018.

In their press release, they stated there was an overall volume decline of 3.2 billion pieces and a net loss of $3.9 billion.

They showed an operating revenue of $70.6 billion for fiscal year 2018 (October 1, 2017 – September 30, 2018), an increase of $1.0 billion compared to the prior year. The higher revenues were driven largely by continued growth in the Shipping and Packages business, where revenue increased $2.0 billion, or 10.1 percent, which more than offset revenue declines in First-Class and Marketing Mail as a result of declining volumes in that segment of its business.

In 2018, First-Class Mail volumes declined by approximately 2.1 billion pieces, or 3.6 percent, while package volumes grew by 394 million pieces, or 6.8 percent, continuing a multi-year trend of declining mail volumes and increasing package volumes. Although mail volume declines were partially offset by growth in package volume, overall volume for the year declined by 3.2 billion pieces.

Similar to the last several years, the Postal Service was unable to make the $6.9 billion in payments that were due to the federal government at the end of fiscal year 2018 to pre-fund pension and health benefits for postal retirees, without putting its ability to fulfill its primary mission at undue risk.

Compared to Prior Year
The following presents revenue and volume by service category for the year ended September 30, 2018, and 2017:


January Postal Rate Change Approved by PRC

The Postal Regulatory Commission has approved the rates filed by the Postal Service at the beginning of October. The rate increase is planned for January 27, 2019. See our previous posting for details on the rates and USPS Promotions.

CP2019-3 Order No. 4876 – Order Approving Price Adjustments for Competitive Products
Link: https://www.prc.gov/docs/107/107057/Order4876.docx
https://www.prc.gov/docs/107/107057/Order4876.pdf

R2019-1 Order No. 4875 – Order on Price Adjustments for First-Class Mail, USPS Marketing Mail, Periodicals, Package Services, and Special Services Products and Related Mail Classification Changes
Link: https://www.prc.gov/docs/107/107054/Order%20No.%204875.docx
https://www.prc.gov/docs/107/107054/Order%20No.%204875.pdf


Canada Post – Rotating Strike Continues

In mid-October, Canada Post began a “rotating” strike which means: “legal strikes may be isolated to one or two specific locations at a time, affecting those areas for a period of 24 hours. In that situation, Canada Post would continue to accept, process and deliver mail and parcels in all other areas. Once the temporary disruption ends, we would return to normal operations in the affected locations.”

For the latest information on the strike, and the impacted areas of Canada, visit Canada Posts site at https://www.canadapost.ca/web/en/blogs/announcements/list.page?cattype=announcements&cat=newsreleases


USPS has filed a CPI Rate Increase – Effective January 27, 2019

The Postal Service has filed a CPI based rate increase for Market Dominant products. It is based on August CPI of 2.419% plus a small amount of banked authority. The filing also included six promotions.

The USPS has also filed 2019 rates for Competitive products.

The USPS will also host a webinar to communicate changes on Friday, October 12, from 1 p.m. – 2 p.m. See end of this post for details on how to register.

Market Dominate Summary

Promotions

First Class: The Postal Service is offering six promotional discounts in Calendar Year 2019, four of which apply to eligible First-Class Mail: Emerging & Advanced Technology; Earned Value Reply Mail; Personalized Color Transpromo; and Informed Delivery. The Informed Delivery promotion is new, while the other three were offered in previous years.

Marketing Mail: The Postal Service is offering six promotional discounts in Calendar Year 2019, five of which apply to eligible USPS Marketing Mail: Tactile, Sensory and Interactive Engagement; Emerging & Advanced Technology; Mobile Shopping; Informed Delivery; and Earned Value Reply Mail. Except for Informed Delivery, all of these promotions were offered in previous years.

Overall Increases

First Class Mail

Marketing Mail

Periodicals

 

USPS Web Event Details

Friday, October 12 at 1 p.m. (EDT)

Registration required. Click on the attendee direct URL below to complete registration.

ATTENDEE INFORMATION

Toll-Free Attendee Dial In: 844-480-7651
Conference ID: 1132268

Attendee Direct URL: https://usps.webex.com/usps/onstage/g.php?MTID=ea116cee3f1f972218fafeb199f85e74b

If you cannot join using the direct link above, please use the alternate logins below:
Alternate URL: https://usps.webex.com
Event Number: 995 167 248

Browser Test: Join Test Meeting


Informed Delivery Update – Enrollment Numbers and Flats Improvements

Informed Delivery provides eligible residential consumers with a morning digital preview of their household’s incoming mail scheduled to arrive that day. Users can view greyscale images of the exterior, address side of incoming letter-sized mailpieces (not the inside contents) via email or an online dashboard. USPS systems do not provide images of flats, but mailers can provide color images of letters and flats (plus additional content and a URL), along with date ranges and Intelligent Mail identifiers, to enhance the Informed Delivery user experience and improve campaign results.

The Postal Service has continued to build out this service but there have been barriers to interest by mailers: number of mail recipients enrolled, knowing which addresses are enrolled in Informed Delivery, representation of flats in Informed Delivery and ease of setup for the multiple versions marketers us to target their audiences.

Number of Mail Recipients Enrolled

In early October, the USPS announced that there were 12.8 million registered users. They have a target goal of 40 million by 2020. Of the current 12.82 million, 10.76 million are Registered Households and 8.17 million are email-enabled users. They shared that there have been over 4,000 campaigns create and maintain a 65% email open rate.

Identification of Addresses Enrolled

Marketers have asked for a method to identify who is enrolled prior to a mailing. This will allow them to perform true market tests. The Postal Service has stated due to privacy they are not able to provide a pre-mailing flag to indicate enrollment.

Representation of Flats

Through the Mailers’ Technical Advisory Committee meetings (MTAC), the Postal Service also shared the increase in Flat Visibility. Flat shaped pieces such as catalogs and magazines were seldom represented in Informed Delivery because of USPS process flow (most carrier route flats receive no scans). They have started providing assumed scans based on eDocumentation to report on pieces inside bundles to increase the representation of flats in Informed Delivery.

These changes have increased flat mailpieces in emails from 13.6% in July of 2018 to 56.6% in August 2018. 62.4%. was reported for early September.

Ease of Setup

Currently the tools in place make it difficult to create multiple test panels. 2019 upgrades to the system should improve the user’s ability to customize the reader’s experience.


August CPI Announced – Indication of Rates for Early 2019

Postal Service leaders have publicly stated that they are preparing a CPI-based rate increase for January 2019, based on August CPI. An August CPI of 2.419% has now been released.

With two board members in place, we expect the Postal Service to move forward with the CPI-based rate filing. Most mailers are planning on an increase of 2 – 3% in January or February with an additional increase later in the year of 2 – 3% in anticipation that the PRC will move forward with a variation of their original 10-Year Rate Review findings.

It is unknown at this time if the USPS will include promotion programs for 2019 in their filing.

Actual rates do vary. For example, expect drop-shipped Marketing Mail letters to go up much more than inflation for the third consecutive year. This is due to the USPS finding that it has been overly generous in passing through its cost-savings to the mailers who do the work-sharing.


Robert M. Duncan Elected Chairman of the USPS Board of Governors

The United Stated Postal Service released the following update on the Board of Governors:

WASHINGTON — During an open meeting of the Temporary Emergency Committee (TEC) of the Board of Governors of the U.S. Postal Service today, Robert M. Duncan of Kentucky was elected chairman of the Board of Governors. David C. Williams of Illinois was elected vice-chairman of the Board.

Also during today’s meeting, Williams was elected chairman of the TEC. Duncan will serve as vice-chairman of the TEC.

Both Duncan and Williams were recently confirmed as governors by the U.S. Senate following their nomination by President Donald J. Trump.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.


Hurricane Update

We are committed to providing our customers with the most up to date service interruption alerts as possible.

As a result of the impending landfall of Hurricane Florence on the east coast of the United States, we have placed a service embargo on all shipments delivering to and/or picking up in the state of Virginia, South Carolina, and North Carolina.

This service embargo will ensure the safety of your product as well as our employees, and drivers; which is our highest priority.

We have made all necessary arrangements to provide product storage at our York, PA consolidation facility until such time as it can be delivered.

We anticipate that shipment deliveries to these areas will resume on Monday – September 17, 2018. This is subject to change as the storm progresses.  Additional updates will be sent as the situation evolves and the hurricane nears US borders.

In addition to the service embargoes listed above, we are closely monitoring deliveries to the state of Maryland.  Late this afternoon the state of Maryland and Washington DC were added to the list of states that have declared state of emergencies. Delays are also anticipated to this area; however we have not yet implemented a service embargo at this time.

Please contact your Client Service Manager for any additional information.

The USPS has closed and ceased operations at many facilities on the east coast due to the hurricane.  Please use the link provided below for the most up to date USPS facility closures. https://about.usps.com/news/service-alerts/

As a courtesy we have provided the link below for the most up to date weather information. https://www.accuweather.com/en/hurricane


Hurricane Florence USPS Impacts

In preparation for Hurricane Florence, the United States Postal Service has started communications concerning East Coast Post Offices impacted by the approaching storm.

To see the latest USPS Alerts concerning Post Offices impacted, go to http://about.usps.com/news/service-alerts/welcome.htm.

The following was issued yesterday:

Greensboro District
Due to potential impacts from Hurricane Florence Priority Mail Express and Marketing Mail will be temporarily embargoed beginning at 8 a.m. on Tuesday, September 11 for the following offices.

  • Rodanthe 27968
  • Rodanthe 27972
  • Rodanthe 27982
  • Avon 27915
  • Frisco 27936
  • Buxton 27920
  • Hatteras 27943

As always, we reach out to clients that are directly impacted.

 

 


USPS BOG Nominees Confirmed (Possible January CPI Rate Increase)

In an evening session on August 28, 2018, the United States Senate confirmed both nominees for the USPS Board of Governors: https://www.senate.gov/legislative/LIS/floor_activity/floor_activity.htm.

We anticipate that the Postal Service will seek a rate increase for January 2018. Over the summer, USPS leaders publicly stated that they were preparing a CPI-based rate increase for early 2019. The barrier to filing was the lack of board to approve a rate increase.

The cycle of filing in October, based on August CPI, with a January implementation has become the typical timeline over the last years.

As a point of reference, CPI in March was 2.051%, 2.073% in April, increased by .2% in May and June CPI came in at 2.254%. Note that the rating authority is not necessarily applied as a flat charge across rate cells, instead, some rates may be greater than CPI and others lower.

New Board:

  • David C. Williams of Illinois, for the remainder of a seven-year term expiring December 8, 2019. Williams was sworn in as the second independent Inspector General (IG) for the U.S. Postal Service on August 20, 2003.
  • Robert M. Duncan of Kentucky, for the remainder of a seven-year term expiring December 8, 2018, and an additional term expiring December 8, 2025. A 40-year political strategist and veteran of Republican politics, served as the 60th chairman of the Republican National Committee (RNC) from 2007-2009.

There is also additional breaking news regarding the USPS Board of Governors. President Donald J. Trump today announced his intent to nominate the following individuals to key positions in his Administration:

  • Ron A. Bloom of New York, to be a Member of the Board of Governors of the United States Postal Service, for the remainder of a seven-year term expiring December 8, 2020.
  • Roman Martinez IV of Florida, to be a Member of the Board of Governors of the United States Postal Service, for the remainder of a seven-year term expiring December 8, 2024.

USPS to resume billing for ACS-related notifications and forwarding services effective August 24, 2018

The USPS released the following Industry Alert:

ACS customers will receive invoices for all ACS-related notifications and forwarding services effective August 24, 2018. The invoices will contain charges for the fulfillment of ACS-related notifications and forwarding services for the period of July 25, 2018 through August 24, 2018.

On September 24, 2018 invoices will be issued for all ACS-related notifications and forwarding services that were provided between March 25, 2018 and July 24, 2018. ACS customers who submitted Full Service-eligible mailings during this timeframe may request preliminary invoices for review by sending an email to the ACS Support department with a Subject line containing “ACS Invoice Review Request”. The email message must include the ACS account number, found on either a recent ACS invoice or from the Electronic Product Fulfillment site where ACS records are retrieved.

For additional information or assistance please contact the ACS Support department at 877-640-0724 (Option 1) or email acs@usps.gov.


White House Task Force: Waiting for Findings to be Released

Friday, August 10, marked the 120 day deadline for the Task Force on the United States Postal System report to be completed.

Over the last months, many industry associations have met with the Task Force. Indications are that President Trump will be briefed on the report this week when he returns to the White House.


PRC Approves USPS Petition to use Internal Measurement System

Postal Regulatory Commission issued a ruling in PI2015-1 that grants the Postal Service’s petition to use internal measurement systems to measure service performance on its products.

This will replace the External First-Class (EXFC) measurement system used to measure delivery performance. The internal measurement system includes a greater volume of mail than the sampling method.

It was on January 29, 2015, that the Commission established Docket No. PI2015-1 to consider a Postal Service proposal concerning new internal service performance measurement systems for several of its market dominant products, including products within domestic First-Class Mail, Periodicals, Marketing Mail and Package Services. Over the duration of this docket, the Postal Service has progressed from presenting an “idea” for new measurement systems, to developing and implementing systems that report service performance for a variety of market dominant products.

Over that time, the Postal Service proceeded with the development and implementation of these new measurement systems for its own internal purposes. The Postal Service did not base its proposals on costs. However, the increase in costs due to implementing and operating the internal service performance measurement system will be offset by the retirement of the legacy EXFC measurement system. This includes the EXFC end-to-end measurement system applicable to First-Class Mail, single-piece letters and flats. It also includes the use of EXFC reporters for generating Last Mile data for other mail products.

In the docket, the Postal Service asks the Commission to consider whether or not the Commission would accept data generated by these systems for the purpose of service performance measurement reporting as required by regulation and statute. 39 U.S.C. § 3652 requires that the Postal Service provide an annual report to the Commission analyzing the quality of service “for each market dominant product provided in such year” by providing “(B) measures of the quality of service afforded by the Postal Service in connection with such product, including— (i) the level of service (described in terms of speed of delivery and reliability) provided; and (ii) the degree of customer satisfaction with the service provided.”

 


Important Web Event for Catalog Mailers – Life After Quill

ACMA’s Attorneys To Explain Ramifications of Supreme Court Ruling in S.D. v. Wayfair 

No doubt, there’s been plenty of confusion since the Supreme Court’s June 21st decision in South Dakota v. Wayfair overruled the Quill physical presence standard of sales tax collection requirements​. Although there’s still not complete clarity on what to do next, ACMA’s attorneys from Brann & Isaacson, who defended Wayfair in the Supreme Court case, will lead an industry conference call on Tuesday, July 10th at 1:00 pm E.T.

There is no charge to dial in and the call is open to both ACMA members and non-members. Our attorneys will attempt to answer the following questions:

  • When will the SCOTUS ruling take effect? When is the decision final?
  • What will happen next?
    • What are the states doing?
    • What is the industry doing (ACMA/NetChoice, Brann & Isaacson)
    • What is Congress doing?
    • What can you do to support a workable outcome?
  • When should catalogers & remote retailers start collecting sales taxes from customers?
  • Should catalogers change their order forms in their next catalogs? Click here to register. This is an off-the-record event and no press will be allowed.

Registration Required

Click here to register. This is an off-the-record event and no press will be allowed.

The Lineup

Come armed with your questions for Brann & Isaacson’s partners George Isaacson and Martin Eisenstein. They will be joined by ACMA President & Executive Director Hamilton Davison and NetChoice Executive Director Steve DelBianco, who will explain what becomes of the lawsuits the tandem of associations has taken over the past year against several states, and what is needed to ensure that the SCOTUS ruling doesn’t turn remote commerce into complete chaos.

A note from ACMA Leadership

ACMA continues to work diligently following the June 21st Supreme Court ruling in South Dakota v. Wayfair, Inc., which overturned the Quill physical presence standard of sales tax collection requirements.

 

Among other actions, we are putting together the following:

  • an urgent national legislative strategy, recognizing it will be Congress that ultimately resolves this matter;
  • an aggressive public relations strategy, taking advantage of the issue’s visibility in the news cycle to correct widespread myths and half-truths being spread about the so-called “ease” of collection;
  • a review of the current status and strategy of all our lawsuits underway to determine relevance or value in light of the SCOTUS decision; and
  • the options for considering “test case” litigation to back up overly aggressive state actions given the many unresolved issues surfaced by this change and to hopefully set some bumper rails as new requirements and laws come onto the books.Our AskWe are also hearing of a number of threatening letters sent to members by states demanding collection of sales taxes from their customers. While you can and should share these with your tax attorney, it would be most helpful for you to also share these with the ACMA (in confidence, of course).

You can feel free to redact your company name and address if you wish prior to sending us anything. We will handle such items sensitively in any case.How To Handle This
Keeping us apprised of developments in this rather frenetic period will be of great value. Please email details to action@catalogmailers.org or feel free to reach out via phone on 1-800-509-9514 to speak with us live. Again, anything you submit will be treated as confidential.Sincerely,

The fight is far from over. Rather, it has intensified with a new sense of resolve. There is a misperception that it is “game, set and match” concerning remote sales taxes, when in fact nothing has changed until the remanded Wayfair case is finalized in the South Dakota Supreme Court. This is not stopping some jurisdictions from jumping into the deep end of the pool given this apparent opening. It may well be that their bad behavior is exactly the motivation that forces congressional resolution of this longstanding dispute. Help us make sure we are armed with the facts. Thank you.

We will be most effective if we maintain a real-time list of the states and the types of demands they’re making so we can show members of Congress why they must pass a bill now to spare our industry from significant harm. To help spur members of Congress to action, we must show them examples of what states are doing that is unreasonable, overly complex or simply not conducive to good governance.

To do the best job for you, we need to stay well informed about what you are experiencing from states or specific jurisdictions, what challenges or problems you have already identified or encountered as you consider how to respond to this development, and what you are hearing from your customers, attorneys, accountants, investors, etc.

An op-ed we contributed to The Hill last week outlines the many questions raised by the court’s decision and the uncertainty we are now dealing with. Many of the specifics it contains were items our members have shared with us. Things are moving quickly. Our ability to properly communicate on this subject depends on what we’re hearing about the current situation on the ground – the realities you are facing each day.

Hamilton Davison

President & Executive Director

American Catalog Mailers Association

hdavison@catalogmailers.org


Enterprise Payment System (EPS) Informational Series

The United Stated Postal Service has announced a series of informational sessions on EPS and the migration process.

o   Call-in toll-free number (US): 1-855-860-7461

  • Conference Code: 358 251 5082

EPS will replace the current product-centric payment with a centralized account processing system enabling customers to pay and manage their service online using a single account.

EPS allows customers to pay for Postal products and services through a single account, called the Enterprise Payment Account (EPA). EPS supports commercial, domestic and international products and services which includes First-Class Mail, USPS Marketing Mail, Periodicals, Electronic PO Boxes Online (EPOBOL) and Address Quality Products.
  • Trust Account: Allows you to directly deposit funds to your USPS payment account for transactions.
    • Trust Accounts can be funded through:
      • Check, cash, or money order deposited at designated retail units (https://postalpro.usps.com/EPS/RetailLocations). You are no longer restricted to deposit at the Zip Code where your permit/publication is held. Note: As an EPS customer, you must provide your 10-digit EPA number, not your permit/publication number, to make a deposit to your Trust Account.
      • Fedwire Transfer -a service provided by the Federal Reserve bank to electronically deposit funds into your account
      • ACH Credit – electronic method to deposit funds into your account directly from your banking institution.
  • ACH Debit: Allows USPS to withdraw payment transactions directly from your bank account.

The USPS has posted a Fact Sheet that walks the user through how to enroll, create an account, migrate CAPS Account, setup payment methods and link account. To keep up to date on the latest regarding EPS, visit the USPS Enterprise Payment System site on PostalPro.

USPS representatives are also reaching out to mailers to help them through the upgrade process. For CAPS users, the Postal Service has announced the retirement of CAPS on April 1, 2019.


Restructure the Postal Service? Privatization?

The White House has released their Reform Plan and Reorganization Recommendations for Delivering Government Solutions in the 21st Century.

This Reform Plan is an annual report that started based on an Executive Order (EO) 13781, entitled “Comprehensive Plan for Reorganizing the Executive Branch”. It highlights the need to evaluate the organizational constructs that support today’s mission delivery objectives. Building on a history of bipartisan Government reform initiatives, the EO focuses specifically on the role of organizational alignment in reducing “duplication and redundancy,” and improving “efficiency, effectiveness, and accountability of the executive branch.”

The report outlines the Administration’s analysis and recommendations for structural realignment of the Executive Branch to better serve the mission, service, and stewardship needs of the American people. While some of the recommendations identified in this volume can be achieved via Executive administrative action, more significant changes will require legislative action as well.

The section on changes to the United Stated Postal Service begins on page 68 and contains the following:

United States Postal Service
Summary of Proposal: This proposal would restructure the United States Postal System to return it to a sustainable business model or prepare it for future conversion from a Government agency into a privately-held corporation. Like many European nations, the United States could privatize its postal operator while maintaining strong regulatory oversight to ensure fair competition and reasonable prices for customers. The President’s Task Force on the United States Postal System will make recommendations on reforms towards this goal in August 2018.

Again, the report is a group of recommendations that are based on the Administration’s analysis. Recommendations that are significant in nature typically require legislative action. The chances of seeing a privatized Postal Service in the near future are extremely low.


Supreme Court Rules Against Wayfair in Online Sales Tax Battle

In a 5-4 decision, the Supreme Court ruled in favor of South Dakota on South Dakota vs Wayfair.  South Dakota was seeking to upend the 1992 Quill ruling which prevented states from imposing sales taxes on companies that did not maintain a physical presence within their borders.

Consequently catalog shippers and others may now be required to collect tax on shipments irrespective of where they are located physically. As the United State has a number of different local and tax regimes, this ruling could have important cost implications for catalog mailers.

The following was provided by the American Catalog Mailers Association. It provides additional insight into the fact that it is not about avoiding tax, but rather the complexity of its management:

“Small catalog and online retailers with little or no presence beyond their headquarters will be hurt the most – some will be forced out of business,” said ACMA President & Executive Director Hamilton Davison. “Rural Americans, shut ins and older consumers will be particularly hard hit by this decision.”

By ruling against remote sellers and customers all across America, the High Court’s decision means companies who sell only 100 orders a year must now collect sales taxes for every South Dakota order. “This is a ridiculously small threshold,” Davison said. “A merchant might sell only 100 $20 orders and now be forced to comply with laws well outside its capacity and be subject to horrendous complexity.”

This opens the door to more than 12,000 separate taxing jurisdictions who are now free to impose virtually any requirement on businesses nationwide. Gone too are the protections from unreasonable and countless compliance burdens on companies without a physical presence; in fact there may be no end to what politicos attempt to impose on those who do not vote for them. “The dizzying array of differing state and local tax laws presents an impossible array of complexity for both remote sellers like catalog companies and their customers,” Davison added.

Congress must now work quickly to clarify exactly what burdens are acceptable to interstate commerce before things devolve into chaos unleashed by this decision. “Given the lack of restraint historically shown by regulators and tax administrators willing to impose virtually any burden on companies outside their borders,” Davison said, “the Court’s decision is sobering and troubling.”

Adding to the absurdity of the High Court’s decision, a recent Government Accounting Office report found that forcing all remote sellers to collect sales tax adds only 2%-3% new revenue but would impose significant additional costs to collect. In essence, it will take only a small drop to employment and corporate profitability to offset any new sales tax revenues this generates.

Other information provided by ACMA stated that “Based on our analysis of nearly 1,000 Internet retail companies, we estimate that about 80 percent of the potential revenue from requiring all Internet retailers to collect is already collectible. Many of the largest Internet sellers are established retail chains or consumer brands with a physical presence, such as retail stores, in all, or nearly all, of the 45 states (plus the District of Columbia) that have a statewide sales tax. As noted earlier, under current law, if a remote seller has a substantial presence (referred to as nexus) in a state, the seller is required to collect.”