Mailing Industry Rails Against New Letter Carriers Deal

The mailing industry has had it up to here with the USPS.

According to D. Edward Tree, three groups that represent the industry had some harsh words for the USPS after they reached a new labor contract with the National Association of Letter Carriers.

The words come as part of a joint statement from The Association for Postal Commerce (Postcom), The Association of Magazine Media (MPA), and the Alliance of Nonprofit Mailers, which Tree analyzes in his blog.

“Rather than bringing compensation more in line with the private sector – as required by postal law – the tentative agreement with NALC worsens the problem,” the statement says.

“The NALC contract confirms that the Postal Service cannot be trusted to make the tough decisions needed to control its own costs,” the statement continued, calling the USPS a “spendthrift monopolist.”

Tree, as usual, gives a precise and perceptive breakdown of the issue:

“The collective bargaining agreement released May 12 would give career letter carriers three pay raises totaling 4.7% over the 40-month life of the contract in addition to seven cost-of-living adjustments,” Tree explains. “The three mailers groups indicated that the Postal Service didn’t get anything in return for the generous pay package, such as the ability to save money by filling openings with more low-paid non-career employees.”

This was, of course, a hot topic of discussion between peers at the recent National Postal Forum (NPF) in Baltimore. Freeport Press’ Mailing and Distribution Manager Tom Watry attended the event.

“This was a sensitive subject, as the USPS played host for the event,” Watry explains, “but it is hard to not put this in the ‘another Government agency overspending and underperforming’ category.”

It’s not the first time this year that the mailing industry has been up in arms. We’ve argued for a long time that the USPS should look internally to clean up some of their issues rather than always complaining postage rate are too low.  Spending more and charging more in hopes of solving your issues has never been a good business plan.

“The USPS, in fact, has often said that increasing wages – along with the mandate to pre-fund pensions and declining mail volumes — are part of what leads to the need for postage increases,” Watry continues. “Then they turn around and give what seems to be a lucrative offer to their workforce. The USPS’s claims that it needs the higher rates ring hollow; this is the same argument they have been having for the last few years, just coming at it from a different angle.”

From what we understand about the deal, postal workers could receive up to 10 possible pay raises in the 40-month deal. If you look at the private sector, how many people have actually received any raise at all in the last five years? Indeed, how many people took pay cuts or had their hours or benefits reduced to help save their company money?

For many at the NPF and throughout the industry, this was a very surprising deal, especially when the USPS is trying to take off the caps on the CPI [Consumer Price Index] rate increase as well as reinstate the exigent rate increases.  (The CPI agreement, in simple terms, means that the USPS can raise rates once a year as long as the increase does not go over the CPI rate of increase. Seems reasonable.)

“In theory,” Watry explains, “this agreement was made to help the USPS’s ability to keep costs in line with annual revenues. But it now seems this has made the USPS turn to find new forms of revenue rather than improve internal processes or structuring.”

With industry sentiment toward the USPS running low, you’d think they’d be more careful to be good stewards of the money they make from mailers. Are they tone deaf to this, or simply don’t know how to fix the problem? Either way, the stage is certainly set for an interesting and likely contentious battle for the next postage increases coming in 2018.