Out with the old; in with the new. It’s a common saying at the start of the New Year. In the postal world, however, some old things go out at the end of the year, only to return again in the New Year, like postal reform.
And, of course, some things never go away completely, which is a good thing. For example, we continue to get mail delivery to our doors at least 6 days a week no matter what is happening with the U.S. Postal Service’s financial condition.
Come to think of it, though, maybe that’s why the loss of the last independent governor to term limits in December has not resonated more with the American public. Even without a governing body, mail gets delivered. (Spoiler alert: this topic made our top 10 list.)
In any event, there was no shortage of news in 2016 about the Postal Service, the mailing and shipping industries, and innovations that affect the postal world. To that end, Office of Inspector General (OIG) staff sifted through the news and put together a top 10 list of postal stories, in reverse order of importance. Share your thoughts on what you think is the top story of the year.
10. The Show Goes On —The Universal Postal Union held its quadrennial Congress in Istanbul despite instability in Turkey in the weeks leading up to the event. And while most countries sent only bare-boned delegations, plenty of work got done, including a terminal dues agreement that includes a new compensation category for small packets.
9. Keep on Truckin’ — A shortage of truckers has implications for the Postal Service, which relies on highway contract route drivers to move mail between post offices. Autonomous trucking, which one day might ease the driver shortage, got its first real-world commercial use in October when Uber and Anheuser-Busch teamed up to deliver 45,000 cans of beer to a warehouse after traveling over 120 highway miles in a self-driving truck.
8. Driving Ahead — The USPS awarded contracts totaling $37.4 million to six suppliers to design 50 prototype vehicles as part of its Next Generation Delivery Vehicle (NGDV) acquisition process. The NGDV will replace the workhorse long-life vehicle delivery trucks.
7. Look! Up in the Sky! — It’s a bird. It’s a plane. It’s a game changer. Amazon’s first branded cargo jet — designated Amazon One — made its debut in August at a Seattle air show. Earlier in the year, Amazon inked a deal with Air Transport Services Group (ATSG) to lease 20 Boeing 767 freighter aircraft operated by ATSG's airlines. Pundits say these amount to further evidence that the ecommerce giant is building its own shipping network.
6. Political Mail’s Moment — It may have been an ugly election cycle, but political mail came up smelling like roses. The Postal Service set an aggressive goal of doubling its previous election cycle revenue and snagging $1 billion of the $12.3 billion in expected ad spend. It might hit that goal when all the counting is done. And in polling, nearly six in 10 respondents said campaign mailers are either “very” or “somewhat” helpful in deciding how to vote, narrowly beating out television, online and email ads.
5. Has It Really Been 10 Years? — The Postal Accountability and Enhancement Act of 2006 turned 10 years old in December. The anniversary triggers some major events for the postal industry: the USPS’s payment schedule into the Retiree Health Benefits Fund ends and any remaining unfunded liability is to be paid over 40 years; and the Postal Regulatory Commission (PRC) started its statutorily mandated review of the ratemaking process in December.
4. Labor Rebounds — A stronger economy in 2016 seemed to swing the pendulum back toward labor on business issues. Workers in various industries — ranging from colleges and universities to digital news media — started to organize, while old-time unions, such as the United Auto Workers Union, secured higher wages and more generous benefits. In the postal arena, the American Postal Workers Union landed a favorable 40-month contract with the USPS from a neutral arbitrator, who also took the unusual step of issuing a short moratorium on plant closings.
3. Service Is Key — Early in the year, the PRC reported in its annual review that most measured products failed to meet their delivery service performance goals. Later in the year, an OIG report chronicled the service problems resulting from the 2015 operating window change and also noted how elusive cost-savings from network consolidation have been. While mail service improved in 2016 over the previous year, it remained a hot topic for much of the year.
2. Price Rollback — The Postal Service rolled back prices on its market-dominant products by an average of 4.3 percent, including dropping the price of a First-Class stamp 2 cents to 47 cents. This unprecedented move was known as the exigency rollback and was a result of USPS hitting the revenue threshold of $4.6 billion it was allowed to generate under the exigent price increase that took effect in 2014.
1. And Then There Were None — For the first time, the $70 billion, 240-year-old Postal Service is without any independent governors on its Board of Governors, calling into question the board’s authority to complete a wide range of activities, including changing postage prices and introducing new products and services.