Credit When It’s Due
Productivity is alive and well and residing in — of all places — the U.S. Postal Service (USPS).
In fact, according to Richard Strasser, CFO at USPS, 2004 marks the fifth consecutive year of increased productivity at the agency.
Now I know the USPS is not the most popular government agency among those in the direct marketing world. And heaven knows, the USPS certainly did burn bridges in past years by deciding to raise rates in swift succession — hitting catalogers and direct mailers particularly hard.
But I’ll give credit (albeit grudgingly) when it’s due. Listen to these statistics, as recently noted by Strasser and Postmaster General John Potter:
1. An aggressive cost-cutting campaign undertaken during the last three years has shaved $8.3 billion from the agency’s expense column.
2. Postal employment numbers are the same as they were in 1984, yet the agency handles 65 billion more pieces annually and delivers to 43 million more addresses.
3. Since 1999, the USPS has reduced its total work hours by a cumulative 728 million.
4. The agency expects to balance its $68 billion budget in fiscal year 2005, despite higher fuel costs and a decline in first-class mail volume.
Boosting productivity and reducing costs always are good places to begin an organizational turnaround. And Potter and his team deserve credit for doing just that.
Eventually, any newly lean supplier will have to start increasing its prices to keep up with inflation and other business costs. USPS is no exception. Potter still is cautioning direct mailers that a rate increase may be coming in 2006. I don’t know about you, but personally, I’m impressed that the agency appears able to hold off increases until then, especially given the rising costs of doing business these days.