From FALL 2002 CONFERENCE
Grassroots Postal Reform Action

A “How-to” Guide for Effective Action in Your Area
By Chris Bradley
cbradley@cuddledown.com
September 2002

Background: 
The USPS is experiencing an unprecedented decline in postal volume in a period of increasing costs.  Postal rates have been increasing at 3 to 4 times the rate of inflation due to inefficiencies in the system and declining volume.  Productivity gains have been very slow to come and political consideration hamper management’s ability to cut costs.  Postal reform is a complex issue with no obvious solutions and many well-funded opponents.  The DMA, Post Com, and the lobbying efforts of the big mailers have yet to make real progress in representing to Congress the interests of all companies that depend on a functional and affordable postal service.  The average citizen believes that the postal system is working just fine and is not aware of any crisis.

Legislative Outlook (as of Sept. 2002):
· John McHugh’s H.R. 22 Postal Modernization Act of 1999 was defeated in committee this year and the prospect of new legislation is poor.
· The current rate relationships are wrong (for example, non-commercial First Class prices are too low) and the USPS needs to move toward market-based rates.
· The new PMG Jack Potter has developed a “Postal Transformation Plan” that contains some bold plans for reforming the USPS.
· Reform of the postal system is seen as “anti labor,” yet there are many more jobs on the mailer side that are dependent on a functional and affordable USPS.
· There is a strong need to get administrative backing for any proposed solution. If a bipartisan presidential commission could be formed, similar to the successful commission formed during the last postal crisis in the 1970’s, possible legislative solutions could be developed.
· The Bush administration needs to feel a groundswell of pressure before they will engage this politically charged issue and appoint a commission.
· The newly announced change to the funding of the USPS pension liabilities is a huge financial help to the service and may allow rates to remain unchanged until 2006, but it does nothing to improve the efficiency of the organization.  It may give mailers some breathing room, but postal reform still needs to proceed in order to safeguard the future of our industry.
· Senators and representatives need to be educated and convinced that status quo at the USPS is a threat to a large sector of the economy.  They need to be transformed into advocates for postal reform so they can both support the formation of a presidential commission, as well as vote for the legislation that is crafted by the commission.

Getting Involved: 
If you are like me, you have plenty to do with your current responsibilities and do not feel compelled to take-on something as daunting as postal reform.  This sort of politically charged quagmire is best left to the professional lobbyists and Washington insiders – or at least that’s what it first looked like from where I sit.

In January 2002 I attended a DMA meeting that included a presentation on the current USPS situation.  I was struck by both the seriousness of the situation, and by how little success the big mailers were having in getting reform started.  I became convinced that a different approach was needed, that grassroots work was needed, and now I have seen how effective that different approach can be.

I established the Maine Postal Reform Committee and organized meetings in Maine with Congressman Tom Allen and Senator Susan Collins. The result of these meetings was to educate both of them on the issue and its impact on jobs in the state.  They both became advocates for postal reform, and Senator Collins introduced a bill to establish and fund a presidential commission.  This success validates the effectiveness of our approach, but it obviously can’t end with the state of Maine.  To actually achieve meaningful postal reform we need to organize grassroots efforts in every state.

How to Take Grassroots Action in Your Area:
1. Form a group of interested mailers that include mail order retailers, printers, magazines, letter shops, list brokers, color separators, financial companies, photographers, data service bureaus, and paper mills.  The objective is to get a broad selection of companies that illustrate how big an issue this is, and to represent a lot of jobs because to a politician jobs mean votes.  Printers are an excellent source of mailers – contact me if you need help building your group.

2. Decide which of your representatives and senators will have the most influence on this issue and prioritize them.  The DMA can help with this decision, as can the government affairs people at any very large mailer in your area.

3. Start with your highest priority representative or senator and organize a meeting to discuss postal reform.

4. Hold your meeting at a printer, letter shop, paper mill, list broker, or anywhere you can give the feeling of related postal dependent work being done and the jobs that are at risk if the USPS continues to slide into financial trouble.  You also want to give the impression that this issue affects many industries, and all sizes of companies, so you may want to avoid meeting at the biggest mail order company in your area – for example, we met in Maine at The Dingley Press, not LL Bean, because Bean had already been very vocal on this issue and we wanted to show how many other companies were affected.

5. Outline the emerging crisis, as well as proposed action, so your congressional representative will have a comprehensive overview.  (See examples of “Agenda”  “USPS Financial Condition” and “Request For Action” included in this kit.)

6. Be sure to give your representative a listing of the companies in your group, as well as the number of jobs at each company.  Once again, emphasizing the number of jobs that are dependant on a functional and affordable postal service will go a long way to offset the political arguments against reform that are coming from labor unions and UPS.  (See “Example of Attendee List Handout” included in this kit.)

7. Develop a few presentations from attendees that will specifically illustrate the impact of the last postal increase on that company.  These should be simple and frank discussions in terms of dollars and jobs.  The objective here is to give the senator or representative a feeling for the magnitude and the dynamics of the problem that each of us face. Having several different industries (such as mail order, printing, publishing, etc.) make presentations is also helpful.  Mailers can specify the amount of the last postage increase for their company and what that would represent in terms of jobs or employee bonus.  In the case of printers and paper mills, a simple analysis of the impact of dropping postage volumes and related print and paper manufacturing declines (the impact on jobs of each 5% decline in manufacturing volume).  (See example, “Impact on Cuddledown” included in this kit.)

8. Be sure to ask your senator or representative to be an advocate in Congress for postal reform.

9. Ask them to help pressure the Bush administration to form a presidential commission to reform the postal system.

10. Ask them to keep your group informed as to the actions they take on this matter. (See the “Request for Action” example in this kit.)

Tips On Organizing Your Group:
1. Recruit one or two other professionals to help form the group and do the legwork. Make sure that you have a staff member to help – if not, recruit someone that does.

2. Contact your printer, separator, paper merchant, list broker, data service bureau, etc. to help identify companies in your area that are being hurt by high postage rates.

3. Be sure to get people that are actually working in your state.  You want the mill manager of the paper mill in your state, not someone from the home office – this applies to large mailers, printers, data service bureaus, list brokers, etc.

4. Concentrate on building an email list of the contacts for your group.  You will be organizing meetings, often with last minute information changes, so email is the best contact method.  Copying all of the addresses to a Word document is a simple way to do a mailing because you can just copy all the addresses and paste them into your email message.

5. Have someone at the meetings with your senator or representative take photographs with a digital camera and email then to you.  Photos tell so much of the story and will be useful for telling other people about your efforts and success.

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Example of an Agenda for your Meeting

Maine Postal Reform Committee
Meeting with Congressman Tom Allen
April 22, 2002
10:45 AM to Noon
At The Dingley Press, Lisbon, Maine

Agenda

1. Introduction to the attendees
· A handout that lists all of the companies and Maine jobs that this group represents

2. Introduction to the problem
· Financial situation at the USPS
· Brief presentations from Cuddledown, Down East Enterprises, Sturbridge Yankee Workshop, and The Dingley Press to give an illustration of how postal rate increases have impacted our companies ($ amounts, number of jobs, etc.)

3. Action Requested
· Outline of what Congressman Allen can do to help reform the postal system

4. Discussion
· Open forum where Congressman Allen can respond and other attendees can speak

5. Adjournment

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Example of Attendee List Handout

Maine Postal Reform Committee
April 22 Meeting with Congressman Tom Allen
10:45 AM at The Dingley Press in Lisbon, Maine

Table Showing Company Name, Number of Jobs, Attendee Name:
 
Berkeley Mailings                 35   John Holt
Cedar Works Inc.                45  Kirby Kramer
Cuddledown Inc.                  80   Chris Bradley
Delorme Mapping Co.        160  Caleb Mason
Down East Enterprise          79  Deb Dodge
GG Direct                           15  Ted Woodward
Howell Ltd.                         11  Regina Farren
Johnny’s Selected Seeds   140  Bruce Herrington
Lighthouse Depot                50  Don Devine
LL Bean                         4,500  Carolyn Beem
Madison Paper Industries   300  Mike Luciano
Maine Printing Company (MPX)                  172  Carl Harris
Maine Pulp and Paper Association              7,000  John Williams
Pinetree Garden Seeds         52  Richard Meiners
Planet Dog                           13  Elissa Schreck
PublishExperts, Inc.                1  Janie Downey
Sappi Fine Paper             1,450  Doug Daniels
Spenser Press                     650  Stephen Spenlinhauer
Stonewall Kitchens              160  Joan Walsh
Sturbridge Yankee Workshop, Inc.                             75  John Alexander
The Dingley Press                400  Chris Pierce
Thomas Moser Cabinet Makers                     144  Gretchen Kruysman
Wright Express                    600  Peggy Watson

Total Maine Jobs Represented  16,132

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Example of Meeting Handout Outlining Problem
(this should be updated for your meeting – contact me if you need help)

USPS Financial Position

· In the fiscal year ended 9/30/01, the Postal Service reported a net loss of $1.7 billion on revenues of $66 billion.

· USPS is now projected to have a net loss of $2 billion for the fiscal year ending 9/30/02
- In summer 2001 this loss was projected to be $1.3 billion
- This was before 9/11, anthrax, the decline in volume (7% for ad mail relative to last year) and the postal rate case settlement which will increase rates on average 7.8% starting 6/30/02.

· We are facing our third rate increase in 18 months.  We have had rate increases in January 2001, July 2001, and now, June 30, 2002.  While varying across the several classes of mail, for “Standard Mail,” the class used most often by direct marketers, the average rate increases have been:
- 8.8% in January ’01
- 1.4% in July ’01
- 7.8% this coming June 30 ’02

· These increases have come at a time of some of the lowest inflation rates our Nation has enjoyed in the last forty years.

· As postal rates increase, volume declines.  As volume declines, revenue drops and the Postal Service enters a “death spiral.”

· Nationally, 9 million jobs and $778 billion in revenue is generated by businesses that are dependent on an affordable, universal postal system1.

· Maine’s First Congressional District has 22,692 jobs and $3.1 billion in revenue.

· Maine’s Second Congressional District has 16,126 jobs and $2.1 billion in revenue.

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Example of Request for Action Handout for your Meeting
(this should be updated for your meeting – contact me if you need help)

Request for Action

1. Be an advocate for reform of the USPS
· House Committee on Government Reform

2. Spread the word to Senators Collins and Snowe, Congressman Baldacci
· Senate Governmental Affairs Committee to meet with PMG Potter

3. Support interim legislation that will keep reform action moving forward
· McHugh Waxman compromise due in mid-May
· Cap rate increases to be no more than inflation, flexibility within rate classifications
· Sunset provision will force congress to solve issue when commission report is complete

4. Help establish a presidential or congressional commission to study issue
· Examine number of post offices, processing facilities, six-day delivery, market-based rates, etc.

5. Support legislation that will result in long-term solutions for USPS crisis

6. Keep this group informed of the actions you take on this issue

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Example of Outline for Presentation from Meeting Attendee

Impact on Cuddledown

· Cuddledown is a relatively small business – 80 employees right now, last year we had more than 90

· We print and mail more than 10 million catalogs each year

· We use about 2,000 tons of paper

· Our postage bill is around $3 million

· An 8% increase in postage is about $240,000

· That equals 8 good jobs at $30,000 per job – we have lost more jobs than that in the past year

· Our circulation has stopped growing due to the economy and postage rates

· So why are postage increases such a big problem for catalog companies?
Why not just pass the extra costs on to our customers? 
As postage rates increase we can only do two things:
- raise our prices to raise gross margin – this puts us at a competitive disadvantage to retail stores
- or print and mail less catalogs, shrinking sales, and cut as much in expenses to offset the lower sales – this means less jobs