• on Sep 17th, 2012 in Finances: Cost & Revenue | 9 comments
    Many international postal operators pay corporate income taxes to their national treasuries. Similar to a private company, these payments appear in the postal operators’ financial statements. Countries whose postal operators pay corporate income tax have essentially made a policy decision: They want their postal service to behave like a private business. This may not be surprising in solidly capitalist countries, such as the United Kingdom, Japan, or Taiwan, but many of these posts are from countries with long histories of centrally controlled economies, such as Armenia, Slovakia, and Croatia. The concept of a corporate income tax is not entirely foreign to the U. S. Postal Service. The Postal Accountability and Enhancement Act requires the Postal Service to compute its assumed federal income tax on the income earned from its competitive products each year. Rather than paying that income tax to the Treasury, however, the Postal Service essentially pays itself. The money is transferred from the Competitive Products Fund to the Postal Service Fund, and can be used to fund the postal network as a whole. Corporate income tax does not necessarily imply privatization either. The postal operators of Germany, the Netherlands, Malta, and Singapore all pay corporate income tax and all are publicly traded corporations. The remaining operators that pay corporate income taxes are, in essence, state-owned. One advantage of the use of corporate income taxes is that the payments to the national treasury are tied to the financial performance of the postal operator. Corporate income tax payments decline during downturns in the business cycle and increase during periods of prosperity. Another advantage is the fact that these national governments have a stake in the sound financial management of their postal operators. In short, they have skin in the game. What do you think? Should the Postal Service pay a corporate tax? Would such a tax encourage a more business-like approach to managing the Postal Service? Or does its public service mission and its current universal service obligations make a corporate income tax unworkable?
  • on Sep 10th, 2012 in Products & Services | 0 comments
    More than 1.4 million Americans serve in the military, with about 200,000 of those troops serving overseas. Members of the armed forces can feel isolated while deployed, often in dangerous conditions. The military discovered long ago that mail boosts the morale of troops serving in other parts of the world, so it has made military mail a high priority. Military mail provides members of the armed forces with a vital link to their communities. As the “Mail Call” exhibit on military mail at the Smithsonian’s National Postal Museum notes: Mail call is the moment when the frontline and home front connect. The U.S. military mail service requires the coordinated efforts of the U.S. Postal Service and the armed forces. The current system has essentially been in place since World War II. The Postal Service is responsible for transportation of mail from U.S. postal facilities to overseas military facilities, between domestic postal facilities and air or surface carriers, while the Department of Defense manages and pays for transportation abroad and the operation of overseas military post offices. The military mail system is an extension of the domestic postal system, meaning senders of mail to Army/Air Force Post Offices (APOs) and Fleet Post Offices (FPOs) pay domestic postage rates. Over the years, the government has granted free mail services for soldiers serving in active combat sites. With the same goal of boosting morale, the U.S. Department of State, under Congress’ authorization, began establishing diplomatic post offices (DPOs) in the early 2000s. Initially, DPOs were set up for diplomats serving in hardship posts, but the State Department has since expanded the DPOs beyond such posts. Like APOs and FPOs, the Postal Service is responsible for the domestic portion of the service. The anniversary of the September 11 terrorist attacks reminds us of the importance of the armed forces and the diplomatic corps to the country’s well-being and standing in the world. The long and rich history of the military mail service is a unique, collaborative effort among parts of the government, working together to serve their public mission. For the Postal Service, military mail is an exemplary depiction of binding the nation together. To the troops and diplomats who serve overseas, it is more simply “mail call” – it is their connection to home.
  • on Sep 3rd, 2012 in Products & Services | 9 comments
    As the U.S. Postal Service remakes itself into a leaner organization in the face of a communications revolution, it still remains a powerful medium and an important part of the nation’s infrastructure. A smaller Postal Service will still be huge, with more than $60 billion in projected revenue. It will not disappear tomorrow. A lingering concern remains, however, that the Postal Service is becoming less relevant to younger Americans. A recent public opinion poll by The New York Times and CBS supports this conclusion. According to the poll, only 30 percent of people under 45 say they use the mail “all the time.” While daily reliance on the Postal Service is still high for older generations, these poll results raise questions about the organization’s long-term future if physical mail does not play a role in the lives of younger Americans. A Pew Research study shows these younger generations turn to the Internet and smart devices for their news, entertainment, and to connect with friends and family. The Postal Service and traditional hard-copy communication vehicles will find it hard to win customers that have grown up as digital natives. Still, other polls suggest that hard copy and direct mail remain an important part of the media mix, even for those under the age 35. A 2011 survey by Pitney Bowes indicated that marketers under the age of 35 are more likely to use direct mail in their marketing mix than their older counterparts. Package delivery also remains an opportunity for the Postal Service as younger Americans are more likely than older generations to shop online. What do you think is the best way for the Postal Service to serve a younger demographic? Should it attempt to promote its traditional products to younger Americans and tout the benefits of hard copy as a complement or supplement to digital? Should the Postal Service instead focus on expanding its digital offerings? Is there another strategy?

Pages