Postal Reform in the United States

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Postal Reform in the United States. Chairman Dan G. Blair Postal Regulatory Commission June 9 , 2009 Tokyo, Japan. U.S. Postal Eras. Post Office Department (1775) Postal Service (1970) Postal Reorganization Act Postal Service (2006) Postal Accountability and Enhancement Act.
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Postal Reform in the United States Chairman Dan G. Blair Postal Regulatory Commission June 9, 2009Tokyo, Japan U.S. Postal Eras
  • Post Office Department (1775)
  • Postal Service (1970)Postal Reorganization Act
  • Postal Service (2006) Postal Accountability and Enhancement Act
  • Postal Reorganization Act of 1970
  • U.S. Postal Service: Independent agency of executive branch of government
  • Break-even mandate: Funded by postal revenues
  • Merit system: For hiring and promotion
  • Postal Rate Commission: Oversight of rate-setting
  • Work-share discounts introduced in rate-setting process
  • Social compact: To bind the nation together through the personal, educational, literary and business correspondence of the people
  • Postal Accountability and Enhancement Act (PAEA) of 2006
  • Flexibility to compete, innovate and respond to the market
  • Postal Service may earn and retain profits
  • Postal products defined: Market-dominant or Competitive
  • Greater Postal Service transparency and accountability
  • Postal Regulatory Commission with strengthened regulation and oversight
  • Postal Regulatory Commission
  • Independent Federal Agency
  • Regulator of the U.S. Postal Service only
  • Five Commissioners appointed by the President and confirmed by the U.S. Senate
  • Our mission: Ensure transparency and accountability of the U. S. Postal Service and foster a vital and efficient universal mail system.
  • How we are organized Role of the PRC under the PAEA
  • Postal transparency and accountability
  • Modern system of rate regulation
  • Postal financial performance
  • Service standards and measurement
  • Complaints
  • Role of the PRC under the PAEA
  • New enforcement tools - Subpoena power - Authority to direct Postal Service to adjust rates and take other remedial actions - Authority to levy fines
  • Annual reports on performance and regulatory process to the President, Congress and the public
  • Role of the PRC under the PAEA
  • International Responsibilities - Coordination with State Department - Federal Advisory Committee - Universal Postal Union engagement - Postal Regulatory Dialogue
  • The “New” Postal Service
  • Flexibility balanced by oversight - Reporting rules- Service improvement and measurement - Postal and non-postal services- Complaint resolution
  • The “New” Postal Service
  • Growth- Customized solutions- Innovative products
  • Modern operating model - Efficient pricing and fair competition - Market-dominant and Competitive categories - Future reform?
  • “Market Dominant” Products(Monopoly)
  • Postal Service: MAILING SERVICES- First-Class Mail (letters, bills, statements, personal)- Standard Mail (Advertising, product offers, non-personal)- Periodicals (publications)- Single-Piece Parcel Post - International Single Piece First-Class Mail
  • Price cap- 45 day review of proposed rate adjustments
  • “Competitive” Products(Full Competition)
  • Postal Service: SHIPPING SERVICES- Express Mail (domestic and international/EMS)- Priority Mail (domestic and international)- Parcel Select- Parcel Return- International Air Parcels
  • Price floor and pricing flexibility- 30 day review of proposed rate adjustments
  • “Partition” Between Shipping and Mailing Services
  • Separate accounting rules and reports for Mailing Services and Shipping Services
  • Prevent cross-subsidy by “monopoly” Mailing Services
  • Imputed federal income tax on Shipping Services
  • Profit from Shipping Services to pay for modernization and Universal Service Obligation
  • Separate customs treatment for competitive products
  • Universal Service Obligation(USO)
  • Comprehensive - Mailing Services and - Shipping Services
  • Monetary Value - Estimated value of monopoly: $3.5 Billion - Estimated cost of USO: $4.4 Billion
  • Everyone, everywhere, everyday
  • Universal Service Obligation(USO)
  • Seven Aspects - Geographic scope - Range of products - Access to postal facilities - Prices/affordability - Quality of service - Users’ rights - Delivery frequency
  • U.S. Postal Service Performance
  • Financial Crisis - FY 2008 Mail loss : 9.5 billion pieces (-4.5%) Net income: - $2.8 Billion - FY 2009 (mid-year) Mail loss: 12.7 billion pieces (14.9%) Net income: - $2.3 billion - FY 2009 (full-year*) Mail loss: 20-25 billion pieces Net income: - $6 Billion
  • Regulatory window on performance - Monthly reports, regular consultations, annual reviews* USPS forecast
  • www.prc.gov
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