Dozens of post offices in north Georgia are open on Presidents Day (February 17th), even though it is a federal holiday. The U.S. Postal Service is making up for the loss of two days last week due to the winter storm.

President Obama is nominating Vicki Kennedy, the widow of Sen. Edward M. Kennedy (D-Mass.) to the U.S. Postal Service Board of Governors. The 59-year-old attorney also serves on the Kennedy Center for the Performing Arts board, and is an activist for gun control. She has been asked to run for her late husband’s Senate seat, but has refused. Sen. Kennedy endorsed Mr. Obama for President in 2008; Mrs. Kennedy endorsed him in 2012.

The USPS Board of Governors functions like a board of directors in a private corporation, appointing the CEO (Postmaster General) and overseeing the agency’s operations and policies.

[press release]
U.S. Postal Service Records Loss of $354 Million in First Quarter, Underscoring Need for Comprehensive Legislation
·     Revenue Increases by $334 Million, Driven by 14.1 Percent Growth in Shipping and Package Services; First-Class Mail Continues to Decline
·   Operating Costs decreased by $574 Million
·   Liabilities of $63 Billion Exceed Assets by Approximately $40 Billion

WASHINGTON — The U.S. Postal Service ended the first quarter of its 2014 fiscal year (Oct. 1, 2013 – Dec. 31, 2013) with a net loss of $354 million. This marks the 19th of the last 21 quarters that it has sustained a loss. Though the Postal Service has been able to grow revenue by capitalizing on opportunities in Shipping and Package Services and has aggressively reduced operating costs, losses continue to mount due to the persistent decline of higher-margin First-Class Mail, stifling legal mandates, and its inflexible business and governance models.

“The Postal Service is doing its part within the bounds of law to right size the organization, and I am very proud of the achievements we have made to reduce costs while significantly growing our package business,” said Postmaster General and CEO Patrick Donahoe. “We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation. We appreciate the efforts of the House and Senate oversight committees to make this happen as soon as possible.”

Without legislative change, the Postal Service will be forced to default on another required $5.7 billion retiree health benefits prefunding payment due by Sept. 30, 2014, because it will have insufficient cash and no ability to borrow additional funds at that date.

The Postal Service will continue to have a low level of liquidity through October 2014. In the event that circumstances leave the Postal Service with insufficient cash, the Postal Service would be required to implement contingency plans to ensure that all mail deliveries continue. These measures could require the Postal Service to prioritize payments to its employees and suppliers ahead of some payments to the federal government, as has been done in the past.

Citing that the Postal Service could not wait for legislation indefinitely, the Postal Service’s Board of Governors directed management in 2013 to accelerate alignment of its operations to further reduce costs and strengthen its finances. The Postal Service leveraged employee attrition and increased use of non-career employees — as provided by new labor agreements — which allowed for better alignment of staffing and workload levels, resulting in reduced labor costs.

“We grew revenue by over $300 million through aggressive marketing and improving service, and we reduced operating costs by $574 million in Quarter 1, partially due to the separation of approximately 22,800 employees in 2013 under a Voluntary Early Retirement program and improved efficiency in our workforce,” said Chief Financial Officer and Executive Vice President Joseph Corbett.

First Quarter Results of Operations Compared to Same Period Last Year

• Total mail volume of 42.0 billion pieces compared to 43.5 billion pieces
• First-Class Mail volume declined 4.6 percent.
• Standard Mail volume declined by 2.8 percent.
• Shipping and Package volume increased 10.3 percent.
• Operating revenue of $18.0 billion, an increase of $334 million or 1.9 percent
• Operating expenses of $18.3 billion compared to $18.9 billion, a decrease of 3.0 percent

Revenue from First-Class Mail, the Postal Service’s most profitable service category, decreased $209 million, or 2.8 percent from the same period last year, with a volume decrease of 817 million pieces, or 4.6 percent. The most significant factors contributing to this decline were the ongoing trends in the mailing behavior of consumers and businesses emanating from the recent recession, and the continuing migration toward electronic communication and transactional alternatives.

The Postal Service’s shipping business continues to show solid growth. Shipping and Package revenue increased $479 million or 14.1 percent over 2013 first quarter results, fueled by the growth of online shopping, Sunday deliveries in limited U.S. markets and the ongoing success of Postal Service campaigns to promote the value of Postal Service shipping services. The Postal Service continues to capitalize on its competitive advantage in providing “last mile” service, resulting in a 34.3 percent increase in revenue from Parcel Return and Parcel Select Service over the same period last year.
Complete financial results are available in the Form 10-Q, available online.

According to Linn’s Stamp News, the U.S. Postal Service will auction “sports themed philatelic products” later this month its eBay store at www.ebay.com/stamps.

More details will be announced the day the auction opens, February 16th.

Well-known stamp collector Janet Klug has been named chair of the U.S. Postal Service’s Citizens’ Stamp Advisory Committee, reports Linn’s Stamp News. Klug is a past president of the American Philatelic Society (and probably holds the record for the longest-serving Immediate Past President), a member of The Virtual Stamp Club, and has described herself as a lifelong collector. She lives in suburban Cincinnati.

If confirmed (and Bill McAllister of Linn’s is almost always accurate), this will mark the first time in recent memory that a “pre-existing” stamp collector (that is, someone who collected stamps before being named to CSAC) has chaired the panel.

Added: The USPS later in the day confirmed the Linn’s article:

Postmaster General Announces New Chairman of the Citizens’ Stamp Advisory Committee

WASHINGTON — On a telephone conference this morning with the Citizens’ Stamp Advisory Committee (CSAC), Postmaster General Patrick Donahoe enthusiastically appointed Janet Klug, past president of the American Philatelic Society, to become chairman of the committee, beginning Jan. 16, 2014.

“I am pleased to appoint Janet Klug chairman of the Citizens’ Stamp Advisory Committee. Janet has already made her presence felt on the committee, having served since 2010. She continually champions ideas that are contemporary, timely and relevant,” Donahoe said.

“As Janet takes on this leadership role, the Postal Service will benefit from her wealth of expertise and knowledge of philately as she helps the Postal Service develop exceptional stamp topics that represent the best of America,” said Donahoe.

A lifelong stamp collector, Klug writes regular columns about stamp collecting for Linn’s Stamp News. Her work has also appeared in American Philatelist, Stamp Collector and Global Stamp News. Her recent publications include Smithsonian Guide to Collecting (2008) and 100 Greatest American Stamps (2007), which she co-authored with Donald Sundman.

Klug also served as chair of the New Initiatives Committee on the Smithsonian National Postal Museum’s Council of Philatelists.

Klug studied computer science and history at the University of Cincinnati and worked in the computer departments of several corporations, including EDS (Electronic Data Systems). Now retired, she is a firm believer in continuing education and loves taking courses at community colleges. “I can see myself as a 90-year-old woman taking yodeling for beginners,” she says. Her considerable volunteer work centers on philately and adult literacy.

Janet will lead her first meeting on January 16th, in Washington D.C. when the group meets for the first of their quarterly scheduled meetings.

Donahoe expressed his appreciation and thanks to outgoing chair Jean Firstenberg, who served on the committee since February 2002.

“Jean brought passion to her work on the committee and served with great distinction and the utmost dedication. She often referred to her work developing stamps as a noble cause and we echo that sentiment ,” Donahoe said.

Firstenberg championed many interesting and unique stamp subjects over the years, including the Legends of Hollywood series, Film Directors, American Journalists, Pixar, Disney and Classic Comic Strips. Other memorable and highly successful stamps issued under her leadership included such topics as Thanksgiving Day Parade, Negro Leagues Baseball, Baseball All-Stars, United States Supreme Court Justices, and several Black Heritage stamps.

Prior to joining CSAC, Firstenberg was the director and chief executive officer of the American Film Institute.

Established in 1957, CSAC is tasked with evaluating the merits of all stamp subjects suggested by the public. The committee’s primary goal is to select subjects of broad national interest for recommendation to the Postmaster General that are educational, contemporary, relevant and timely. Also, the members review and provide guidance on artwork and designs for stamp subjects that are scheduled to be issued.

The Postal Service encourages individuals with stamp ideas to submit their suggestions in writing to:

Citizens’ Stamp Advisory Committee
475 L’Enfant Plaza SW Room 3300
Washington, DC 20260-3501

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

Linn’s Stamp News reports one of the four Jenny Invert Reprint souvenir sheets with the airplane rightside up that have been reported as found has been sold to Ideal Stamp Co. for $25,000. More details at Linns.com

Besides the 3¢ increase to 49¢ for a letter, the Postal Regulatory Commission also approved:

• 21¢ for additional ounces
• 34¢ for postcards
• $1.15 to all international destinations

It’s interesting that the PRC is granting this increase “to offset losses suffered as a result of the Great Recession of 2008-2009.” It calculates that as 25.3 billion pieces of mail, which would have brought in another $2.8 billion. The agency calls this more-than-inflation rate increase a “surcharge that will last just long enough to recover the loss.” That’s two years.

After that, prices are supposed to go back to the present rates, or the present rates plus inflation — and, with the Federal Reserve eases its controls on the economy to keep inflation low, that could be just about the same as the rates that start in 2014.

[UPDATED] A surprise from the U.S. Postal Service and the Nickelodeon children’s television channel, announced on the same day they were first available — and they’re only going available in 25,000 post offices.

They’re not “postal cards,” or postal stationery, as we first thought. They’re available for free.

Here’s the press release:

 [Nickelodeon press release]
Nickelodeon And The United States Postal Service Team Up For “SpongeBob Mailpants” Letter Writing Program

Campaign Encourages Kids to Write and Mail Letters


30 Custom-Wrapped SpongeBob Mailboxes Placed in 13 Cities Nationwide, as Program Rolls Out in 25,000 Post Office Locations

NEW YORK, Dec. 5, 2013 /PRNewswire/ — Today Nickelodeon and the United States Postal Service are launching “SpongeBob MailPants,” an educational letter-writing program that uses SpongeBob SquarePants to show kids the fun of writing, sending and receiving mail this holiday season. Now through Jan. 4, 2014, kids can get special postage-paid, customized SpongeBob postcards at more than 25,000 Post Office locations nationwide to connect with their loved ones using the U.S. Postal Service.

In addition to the postcards, 30 mailboxes are being wrapped in a custom SpongeBob design in cities, including Atlanta, GA; Boston, MA; Charlotte, NC; Chicago, IL; Dallas, TX; Hollywood, FL; Kirkwood, MO; Los Angeles, CA; Miami, FL; New York, NY; Orlando, FL; Philadelphia, PA; and Washington, DC, adding a blast of color and comedy to sidewalks this winter.

“This program is a great way to inspire kids to write and send cards and letters because it’s done with the fun, positivity and humor of the one and only SpongeBob SquarePants,” said Pam Kaufman, Chief Marketing Officer and President of Consumer Products for Nickelodeon. “SpongeBob MailPants is a terrific partnership between Nickelodeon and the Postal Service, and we’re thrilled that kids and families across the country can go to their local Post Office for some SpongeBob-inspired holiday cheer.”

“We’re excited to partner with Nickelodeon. This is a great, fun way to teach kids to write postcards. What better way to encourage kids to experience the excitement of sending personal correspondence than teaming up with SpongeBob, who is adored by children of all ages,” said Nagisa Manabe, Chief Marketing and Sales Officer at the United States Postal Service. “And the timing is perfect. A postcard is a terrific way to send a holiday thank you.”

Kids, parents, and teachers who want to learn more about letter writing and the “SpongeBob MailPants” program can visit www.nick.com/usps to find the following:

• A step-by-step, interactive video tutorial that guides kids through the process of writing a letter and provides printable practice sheets.
• Customizable and printable SpongeBob stationery that will be updated with new imagery throughout the program.
• Writing-themed SpongeBob video clips.

Since its launch in July 1999, SpongeBob SquarePants has emerged as a pop culture phenomenon.  The series has been the most-watched animated program with kids 2-11 for more than 12 consecutive years, and over the past several years, it has averaged more than 100 million total viewers every quarter across all Nickelodeon networks. As the most widely distributed property in Viacom history, SpongeBob is seen in more than 170 countries and translated into more than 35 languages. The character-driven cartoon chronicles the nautical and sometimes nonsensical adventures of SpongeBob, an incurable optimist and earnest sea sponge, and his undersea friends.

This partnership with the United States Postal Service was created by Nickelodeon’s New Business Development team, which brings family-influenced insights to the marketing community and delivers new, robust partnership solutions to clients.

About USPS
 

The second design

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation: 152 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. With more than 31,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private-sector company, the U.S. Postal Service would rank 42nd in the 2012 Fortune 500. The Postal Service has been named the Most Trusted Government Agency for seven years and the fifth Most Trusted Business in the nation by the Ponemon Institute.

About Nickelodeon
Nickelodeon, now in its 34th year, is the number-one entertainment brand for kids. It has built a diverse, global business by putting kids first in everything it does. The company includes television programming and production in the United States and around the world, plus consumer products, online, recreation, books and feature films. Nickelodeon’s U.S. television network is seen in more than 100 million households and has been the number-one-rated basic cable network for 18 consecutive years. Nickelodeon and all related titles, characters and logos are trademarks of Viacom Inc. (NASDAQ: VIA, VIA.B).

[USPS press release]

Despite Revenue Growth and Record Productivity, Postal Service Loses $5 Billion in 2013 Fiscal Year

·Revenue Increase Driven by 8 Percent Growth in Shipping and Packages, 3 Percent usps_mailboxpickupGrowth in Standard Mail; First-Class Mail Continues to Decline
· Nearly $1 Billion in Savings Driven by Work Hours Reduction of 12 Million Hours and Optimizing Workforce Flexibility
·Substantial Deficit Liabilities of $61 Billion Exceed Assets by Approximately $40 Billion

WASHINGTON — The U.S. Postal Service ended the 2013 fiscal year (Oct. 1, 2012 – Sept. 30, 2013) with a net loss of $5 billion. This marks the 7th consecutive year in which the Postal Service incurred a net loss, highlighting the need to continue to capitalize on growth opportunities, reduce costs, and enact comprehensive legislation to provide a long-term solution to the agency’s financial challenges.
Even though the Postal Service has implemented a number of strategies that resulted in $15 billion in annual expense reductions since the Postal Accountability and Enhancement Act was passed in 2006, the combination of onerous mandates in existing law and continued First-Class Mail volume declines threatens the Postal Service’s financial viability.

“We’ve achieved some excellent results for the year in terms of innovations, revenue gains and cost reductions, but without major legislative changes we cannot overcome the limitations of our inflexible business model,” said Patrick Donahoe, Postmaster General and Chief Executive Officer. “Congress is moving forward with legislation that has the potential to give us greater flexibility and put us back on a firm financial footing, and we strongly encourage that they continue moving forward.”

The legislative requirements put forward by the Postal Service, as outlined in the Five-Year Business Plan, include:
· Restructure the Postal Service health care plan.
· Refund Federal Employees Retirement System (FERS) overpayment and lower future FERS payment amounts to those required.
· Adjust delivery frequency to six-day packages/five-day mail.
· Streamline the governance model (eliminate duplicative oversight).
· Provide authority to expand products and services.
· Require defined contribution retirement system for future Postal Service employees.
· Require arbitrators to consider the financial condition of the Postal Service.
· Reform Workers’ Compensation.

Results of Operations
Highlights of yearly results compared to the same period last year include:

· Total mail volume was 158.4 billion pieces compared to 159.8 billion pieces a year ago. Package and Standard Mail volumes grew by 210 million pieces and 1.4 billion pieces, respectively, while the most profitable product, First-Class Mail, fell by 2.8 billion pieces, led by single-piece volume decline.

· Operating revenue, excluding a $1.3 billion non-cash change in an accounting estimate, was $66 billion compared to $65.2 billion in 2012. While this is the first growth in revenue since 2008, declining First-Class Mail revenue continues to negatively impact financial results.

· Operating expenses were $72.1 billion in 2013 compared to $81 billion in 2012. Approximately $8.2 billion of this decrease resulted from higher, legally mandated retiree health care benefit expenses and higher non-cash Workers’ Compensation expense in 2012. Expenses in 2013 include a required $5.6 billion contribution to retiree health care benefits that the Postal Service was unable to make. Continued lack of legislation will likely force the Postal Service to continue to default on these payments. Savings from plant consolidations, restructuring hours at Post Offices, reductions in delivery units, and workforce optimization resulted in approximately $1 billion of savings in 2013.

· The net loss for the year, which was decreased by a $1.3 billion non-cash change in estimate, was $5 billion. However, this change in accounting estimate has no impact on the Postal Service’s receipt of cash, or cash on hand, nor does it lessen the severity of its current liquidity situation. For more information regarding the non-cash adjustment, refer to the Form 10-K, available online.

The Postal Service continues to grow its Package Services business. From fiscal year 2012 to fiscal year 2013, revenue from Package Services increased by $923 million, or 8 percent, on a volume increase of 210 million pieces (6 percent). By developing innovative services to appeal to the growing parcel delivery market, Shipping and Package Services grew to $12.5 billion, representing approximately 19 percent of revenues. Standard Mail revenue grew by $487 million, or 3 percent, on a volume increase of 1.8 percent.

The growth in revenue from these products is not enough to offset the long-term loss in revenue and volume of our most profitable service, First-Class Mail. First-Class Mail revenue, which peaked in 2007, dropped $704 million or 2.4 percent in 2013. First-Class Mail volume declined 2.8 billion pieces or 4.1 percent.
“Our productivity reached an all-time high in 2013, increasing 1.9 percent, compared to 2012,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “This marks our fourth consecutive year of positive total factor productivity growth since the depths of the recession in 2009.”

Work hours in 2013 decreased by 12 million or 1.1 percent, despite an increase of approximately 774,000 delivery points during 2013.

“The reduction in work hours and the optimization of work force flexibility that we have available to us contributed to a savings of nearly $1 billion in compensation and benefits costs,” said Corbett, “a reflection of our efforts to improve productivity and to respond to the decline in mail volume.” Since 2000, the Postal Service has reduced work hours by a cumulative total of 516 million work hours, equivalent to 293,000 employees, or $22 billion in annual expense savings.”

At the end of the 2012 fiscal year, the Postal Service reached its statutory debt ceiling of $15 billion for the first time, and it remains at the limit at the end of the 2013 fiscal year. “Our liquidity continues to be dangerously low and our liabilities exceed our assets by approximately $40 billion,” said Corbett. “This underscores the need for Congress to pass legislation that improves our financial position and that gives the Postal Service a more flexible business model to improve its cash flow. Despite reaching the debt limit, Postal Service mail operations and delivery continue as usual and employees and suppliers continue to be paid on time.”

Complete financial results are available in the Form 10-K, available after 11 a.m. ET today at http://about.usps.com/who-we-are/financials/welcome.htm