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Rich Gebbie Presents to USPS Board

Written by Midwest Direct

On Thursday, November 14th, our very own Rich Gebbie presented opening comments at the USPS Board of Governors. The following are highlights from the meeting provided by an organization we are proud to be a part of National Association of Presort Mailers (NAPM):

  • Two of the three new Governors were in attendance in addition to Governor Williams and Governor Duncan. Governor Bloom had been in attendance at the closed Board meetings the past 2 days but was unable to stay for the open meeting.
  • The Board has begun a nationwide search for the next Postmaster General, utilizing the services of a search firm.
  • The Board has made committee changes as follows:
    • Governor Barger will chair the Compensation and Governance Committee (which is spearheading the PMG search). This committee also works on succession planning, leadership development, national performance goals, and results, etc.
    • Governor Bloom will chair the newly renamed Strategy & Innovation Committee (formerly called the Governance, Regulatory and Strategic Planning Committee).  This committee reviewed the draft of the USPS 5-year strategic plan, which the full Board later approved (see below)
    • Governor Duncan was re-elected Chair of the Board; Governor Williams was re-elected Vice Chair
  • USPS CFO Corbett presented the USPS’ FY2019 financial statements
    • “A solid year for revenue” with an increase of $514 million
    • Overall volume declined to 3.8 billion pieces. 
    • Packages: less than 1% growth in volume, 6.1% increase in revenue ($1.3 billion increase)
    • First Class Mail volume down 3.1%; Marketing Mail volume down 2.1%
    • Operating Expenses up 2.7% (salaries/benefits up 2%, RHB normal costs up $.5 billion)
    • USPS invested $1.4 billion in FY2019 (vehicles, package processing equipment, tracking enhancements)
    • USPS paid $2.2 billion in debt reduction
    • 4.3 million workhours reduced in last 3 quarters of FY2019
    • “controllable” net loss of $3.4 billion -- $8.8 billion loss if you include workers comp fluctuations
  • The Board approved a new USPS 5-year strategic plan (this is a follow-on from the last published strategic plan, and is different than the 10-year financial sustainability plan the USPS is developing with the Board’s input)
  • The Board also approved the USPS’ FY2019 Annual Report and Comprehensive Statement on Postal Operations.
  • The Board deferred approval of the USPS’ FY2020 Integrated Financial Plan (IFP), said the Board is making adjustments to the IFP
  • COO Dave Williams presented the Q4 FY2019 service performance results
    • First Class Mail: Q4 volume in measurement up 53.3% over SPLY. FCM 9.3 billion pieces in Q4 measurement, 8.7 billion pieces met service targets
    • Marketing Mail: 12.3 billion pieces in measurement; 11.3 billion met service targets in Q4. Average days to deliver decreased from 3.1 days SPLY to 3.0 days FY2019.
  • The next scheduled meeting of the Board is Feb. 6-7, 2020; though the Board may meet between now and then, either in closed or open session.

 

Rich Gebbie, President of NAPM, presented the following remarks at the USPS Board of Governors meeting:

Good morning, I am Richard Gebbie CEO of Midwest Direct, a Mail Service Provider for the past 35 years, delivering over 2 million USPS based and digital messages per day. I would like to briefly share a few things I believe are critical to turn the Postal Service around financially and propel them to the successful company they need to be in the future.

I will begin by saying, any business that cuts service levels and raises prices is a business soon to be out of business. As Larry Page, co-founder of Google once said, “Always deliver more than expected.” I believe with the help of the private sector; we together can make that happen.

Every time I read or hear about the Postal Service’s financial challenges, I am reminded of an industry that not that long ago was faced with almost the exact same challenges the Postal Service faces today. High labor costs, difficult labor contract negations, poor quality, diminishing revenue, and legislative challenges.

I am referring to the auto industry and as a specific example, Ford Motor Company that just a few short years ago was in a financial crisis and on the brink of bankruptcy started working with the vendors with its supply chain and has turned it into the once again great profitable company that it is today.

Ford and other auto manufacturers changed from a thought process of we have to build every part and car we sell, to embracing the vendor community to reduce cost, increase quality, reduce time in building vehicles. They built a multi-tier program for the vendors based on the vendors’ quality and capability. Then, moved to a just in time environment requiring the vendors to produce and deliver key components to the final assembly plants so the vehicle could be completed in the time needed with great success. They even make sure the vendors don’t underprice the products and are profitable in order to ensure no disruption in the final assembly.

In my example, I believe there is a model postal could use to set up a partnership utilizing the current workshare programs to further reduce costs and improve service levels. I believe that the turnaround in the auto industry proved a couple of things; one, you can’t be everything to everybody and two, that many working together can far exceed more than one working alone

I would like to close with a quote by Ken Blanchard, author of the One Minute Manager, “None of us is as smart as all of us” and in the spirit of this quote, we are asking to be part of the solution not the problem. To be part of the solution we need to have a seat at the table as the future direction of the Postal Service is being planned. We believe we have shown success in reduced costs and increased profitability in the workshare programs over the past 30 years and we want to work together to expand these successful workshare programs to enhance and ensure a successful Postal Service for our country for the future.

 

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