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USPS consultant to divine future of stamps under $500K+ contract

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What might the future hold for the humble postal stamp? The financially challenged U.S. Postal Service is paying a New York consulting firm named Faith Popcorn’s BrainReserve more than a half-million dollars to find out.

“Who will be buying stamps in 2019, 2024 and 2034? What will they be used for?,” reads the company’s description of the $566,000 task order awarded last month. “How can we embed innovation and new thinking into stamps, to engage America’s coming generations and the [USPS’s] existing and new customers?”

After starting the job early last month, BrainReserve–whose website touts its consulting specialty as “applied futurism”–is supposed to finish up work by mid-October, the statement indicates. Faith Popcorn, the company’s CEO, is billing the Postal Service at an hourly rate of $836. Labor fees for other BrainReserve staff involved in the project range from $91 to $334 per hour.

According to the description, a copy of which was obtained by Federal Times, BrainReserve is to devise strategies both to slow the “predictable decline” in stamp use and to “reinvent and reimagine” stamp relevance to promote growth. While sales of the adhesive-backed paper squares and rectangles have been steadily waning as Americans turn to the Internet to pay bills and stay in touch, they still garner $8 billion annually for the Postal Service, the company says.

“This is a complex, multi-dimensional issue,” it concludes. “The methodology requires in-depth investigation, analysis and ideation in order to Trend-correct the current decline in USPS Stamp volume and begin to structure powerful mechanisms for growth.”

A BrainReserve employee referred questions to the Postal Service, where spokeswoman Toni DeLancey said the firm was hired in January under a competitively awarded indefinite-delivery/indefinite-quantity contract to support product innovation and brand management. BrainReserve, which had not previously done business with the Postal Service, was founded in 1974 and has worked for American Express, Campbell Soup Co. and other Fortune 500 firms, DeLancey said in an email.

It is “important to note,” she added, that BrainReserve’s “statements of work” for this and other assignments are not USPS documents. The “terms and conditions of any task order awarded may be different from what is reflected in these documents.” Nagisa Manabe, the Postal Service executive vice-president in charge of sales and marketing, was not available for an interview late last week.

The stamp project is one of five task orders that BrainReserve has so far received, DeLancey said. Another is an almost $1.1 million endeavor to explore the possibility of using letter carriers to provide paid home visitation services to the elderly and ill. Those services could include a daily personal visit and regular checks to make sure that customers are using medical devices or taking prescribed medications, according to the company statement of work for that task order.

Since its founding, the Postal Service has connected people, often going beyond the call of duty to provide “caring personal connections in times of crisis,” the document adds. The home visit concept “builds upon and formalizes this powerful aspect of the USPS heritage.”

At the National Rural Letter Carriers’ Association, one of two unions representing the workers who would play a central role in any such visitation program, a spokesman said the group is not currently involved in the project, but would “very much” like to be. Efforts to get comment from the National Association of Letter Carriers were unsuccessful.

For anyone who’s interested, you can check out the statements of work for the two task orders here.

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For letter carriers, new contract certain to show the strain of tough times

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As early as this week, members of the National Association of Letter Carriers could get the terms of a new contract. Whatever a three-man arbitration panel decides, the outcome is sure to furnish fresh evidence of the painful tradeoffs facing labor as the embattled U.S. Postal Service presses to cut personnel costs.

NALC members “understand that difficult things were necessary,” Jim Sauber, the union’s chief of staff, said in an interview today. “But on the other hand, we also want to reward the people who are working harder and have harder jobs.”

The NALC, for example, is proposing to create a new class of lower-paid, non-career employees dubbed “city carrier assistants” that would replace an existing classification known as transitional employees.  Although those carrier assistants would earn less than today’s transitional employees, they would get first shot when it comes to applying for career letter carrier jobs, Sauber said.

Under the NALC’s proposal, “both sides kind of get what they wanted,” Sauber said. “Even though the pay is lower, we think it’s going to be a better result for the people who take these jobs.”  But in written testimony to the arbitration panel, union President Fredric Rolando underscored that the organization is only reluctantly pursuing this option. “We trust that the panel will appreciate that, but for the present crisis, the concept of a lower paid, non-career letter carrier workforce would be totally unacceptable to the NALC,” he said.

For the arbitration panel, Sauber said, the key issues are now how many non-career employees to allow and how much to pay them. The Postal Service, he said, wants more such employees with lower compensation than the union has proposed.  According to Rolando, the Postal Service also wants to freeze wages, eliminate cost-of-living increases and cut benefits for career employees. All three are “completely unacceptable” to the NALC, he said in his testimony posted on the union’s website.

A USPS spokesman, citing standard policy, declined to discuss labor negotiations.

But the NALC isn’t just up against postal leaders intent on more payroll reductions as the agency continues to hemorrhage red ink. The organization is also battling precedent set by previous contract decisions involving two other postal unions. In 2011, the American Postal Workers Union agreed to a two-tier wage system that pays new career employees less. Last July, the National Rural Letter Carriers’ Association had to swallow a similar arrangement under a new contract set by a separate arbitration board.

With about 180,000 employees in its bargaining unit, the NALC is among the largest of the four major postal unions. It has so far successfully fought the Postal Service’s efforts to eliminate most Saturday delivery, a move the agency estimates would save about $2.7 billion a year. But Sauber stressed the union’s work with management to slash the number of routes as mail volume has declined—a step that puts more work on remaining letter carriers.

“We feel like we’ve been a very responsible bargaining partner with the Postal Service,” he said. “We didn’t stick our head in the sand when the crisis hit.” The new contract will replace an agreement that formally expired in November 2011. Rolando’s testimony, incidentally, is noteworthy for the disappointment expressed with the Obama administration, which has endorsed five-day delivery.

The White House, he said, “is like a deer frozen in the headlights on postal issues.” Despite the union’s political support, Obama “has not been of any great help on our critical issues, and we have to own up to that.”

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Postal union political spending up this election

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Organized labor may be hurting, but it would be hard to tell from the amount of money that the four big postal unions are spending on this year’s presidential and congressional races.

According to their most recent disclosure reports filed earlier this month, the four–through their political action committees–had shoveled about $9.6 million into the 2012 election cycle, already ahead of the $8.9 million total for 2010, a non-presidential election year, according to data compiled by the non-partisan Center for Responsive Politics.

Accounting for more than half of the 2012 sum was the National Association of Letter Carriers, followed by the American Postal Workers Union, the National Rural Letter Carriers’ Association and the National Postal Mail Handlers Union.

The stepped-up giving comes as Congress is struggling to find a fix for the U.S. Postal Service’s myriad problems that could have far-reaching consequences for rank-and-file employees, particularly if lawmakers agree to the agency’s plan to end most Saturday mail delivery.

In regard to campaign contributions, the bulk of union giving has been directed to Democratic candidates and party organizations, although an occasional Republican does turn up as a recipient. Most notably, the rural letter carriers’ PAC gave $8,500 to Rep. Darrell Issa, R-Calif., the House Oversight and Government Reform Committee chairman who wants to eliminate layoff protections from future Postal Service labor contracts.

Here’s the spending breakdown for 2012 and 2010:

Union            2012                    2010

NALC:       $5,751,165       $5,407,918

APWU:     $2,136,855       $2,070,352

NRLCA:   $1,258,708       $1,255, 141

NPMHU:    $429,575           $198,359

TOTAL:   $9,576,303       $8,931,740

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Showdown over mail delivery looming on Capitol Hill (but not this month)

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One way or another, it looks like a major congressional battle is headed our way over the U.S. Postal Service’s long-sought goal of ending most six-day mail delivery. One possible flash point is the postal overhaul bill (H.R. 2309) sponsored by Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., which would allow postal officials to begin moving to five-day delivery within six months of the legislation’s being signed into law.

The House’s Republican leadership had hoped to bring the Issa measure to the floor this month; earlier this week, the National Association of Letter Carriers said its “most urgent goal is to prevent this devastating bill from ever becoming law” and announced that it was setting up a toll-free number for members to contact individual lawmakers in opposition.

With mail volume in steady decline, curtailing six-day delivery is at the top of the Postal Service’s cost-cutting agenda. The projected savings are close to $3 billion per year. But the NALC, whose members obviously have a lot to lose, says that step would “destroy” 200,000 jobs. In today’s fractured Congress, this is one of those rare issues that can bring lawmakers together across party lines, raising questions about whether the Issa/Ross bill can pass. A slim bipartisan majority of 222 House members have signed on to a non-binding resolution sponsored by Rep. Sam Graves, R-Mo., urging the Postal Service to stick with the status quo.

And late Wednesday, a Ross spokesman confirmed an online report by The Hill newspaper that chances of action on the bill this month are now slim. “It appears, although we have the votes, leadership does not intend for postal reform to come to the floor before [the] August recess,” the spokesman, Fred Piccolo, told FedLine in an email.

But there’s another front in this fight.  Even though the Postal Service receives no tax dollars for operating expenses, it still has to abide by the wishes of congressional appropriators. And both the House and Senate versions of the fiscal 2013 financial services and general government spending bills would require continuation of six-day delivery.

Six-day delivery “is one of the most important services provided by the federal government to its citizens,” the Senate Appropriations Committee wrote in an explanatory report accompanying its version of the bill. “Especially in rural and small-town America, this critical postal service is the linchpin that serves to bind the nation together.”

The Senate bill would also put new restrictions on the Postal Service’s freedom to close mail processing plants, raising alarms from the Coalition for a 21st Century Postal Service,  a mailers’ group. Although individual members have different views on the potential benefits of cutting mail service, “we are united in our  conviction that the Postal Service must reduce its operational capacity,” the coalition said in a letter to top members of the appropriations committees this week. “Bringing in additional issues can only generate additional uncertainty and potential delay in the passage of reform legislation that is so critical to returning the Postal Service to financial stability.”

[This story has been updated]

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Rural letter carriers’ contract concessions follow APWU precedent

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When American Postal Workers Union members agreed to a contract last year that included wage and benefit concessions, they were obviously binding themselves for the life of the agreement with the U.S. Postal Service. Less obvious—at least to FedLine–was that they were also setting the stage for similar givebacks by other postal unions.

That’s a lot clearer now, however, with the award of the three-member arbitration board charged with setting the terms of a new contract between Postal Service and the National Rural Letter Carriers’ Association.

The APWU agreement “provided precedent that would have been very difficult to ignore,” wrote Joey Johnson, the board’s NRLCA-appointed member, who partially dissented from the final decision announced yesterday.

Just like the APWU contract, for example, the new agreement for the rural letter carriers includes creation of a two-tier wage system that will pay new career employees more than 10 percent less, according a USPS summary. The deal also means lower wages for new non-career rural carrier associates to the tune of more than 20 percent, the summary says. Rural letter carriers will also shoulder an increasing share of the cost of their health insurance premiums, exactly along the lines of the APWU contract.

It could have been worse, of course. The Postal Service apparently wanted deeper concessions than those agreed to by the APWU on the grounds that its financial condition had deteriorated since last year. That line of argument didn’t persuade the arbitration board’s chair, Jack Clarke. The big problem, Clarke wrote, is Congress’ failure “to address the overall mission and financing of the Service in a time of deteriorating mail volumes and reduced public demand for hard-copy postal services.”

The new contract does contain modest wage and cost-of-living adjustments. It also suggests what’s ahead for members of the National Association of Letter Carriers and the National Postal Mail Handlers Union, the other two postal unions whose contracts expired last November. Following the failure of negotiations with the Postal Service, both are proceeding with binding arbitration.


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Arbitrators to decide terms of three postal union contracts

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Now that the U.S. Postal Service and the National Postal Mail Handlers Union are officially arbitration-bound, it seems time for an overview of the state of USPS labor negotiations that will affect both the mail carrier’s bottom line, not to mention the incomes and working conditions of tens of thousands of postal workers.

More than a year has passed since members of the American Postal Workers Union ratified a new contract that will run through 2015. But the Postal Service has yet to sew up agreements with its other three bargaining units.

Its last contract with the National Rural Letter Carriers’ Association, for example, expired in November 2010; after the two sides couldn’t reach a successor deal, arbitration hearings wound up in April. NRLCA members are now waiting to hear the outcome from the three-member panel headed by neutral arbitrator Jack Clarke.

Contracts with the mail handlers union and the National Association of Letter Carriers both played out last November. After a failed bid at mediation earlier this year, the NALC announced a few weeks ago that Shyam Das will  chair the arbitration panel, with discussions under way to set a hearing schedule that could last several months. Last but not least, the mail handlers union announced last week that it’s also headed to arbitration after mediation also proved unsuccessful.

Both labor and management tend to be tight-lipped about the exact issues that lead to hangups in contract talks. There’s little doubt, however, that this round has been particularly arduous, as the Postal Service seeks to win cost-saving concessions.  The terms of last year’s APWU contract, for example, were such that the union’s immediate past president, William Burrus, opposed ratification.

In a posting on its web site last week, the mail handlers union suggested that one factor in the failure of mediation in its case was Congress’ slowness in acting on legislation “to support the long-term financial well-being of the Postal Service as an ongoing institution and government agency.”  In addition, “the status of the bargaining agreements for our three sister postal unions clearly could have an effect on what is already an exceedingly complicated process regarding the NPMHU-USPS contract dispute.”

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Arbitration ahead for Postal Service and National Association of Letter Carriers

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Well, that didn’t take long. Less than a month after National Association of Letter Carriers President Fredric Rolando said the union was “committed” to reaching agreement on a new labor contract through mediation, it’s now headed to binding arbitration with the U.S. Postal Service, according to a release posted on a USPS site. The arbitration process will wrap up later this year, the Postal Service said.

A NALC spokesman had no immediate comment this morning.

The news comes three months after impasses were declared in the Postal Service’s negotiations with both the NALC and the National Postal Mail Handlers Union. Although the unions’ previous contracts officially expired in November, the terms remain in effect until new agreements are reached. After an impasse, the next step is normally mediation, followed by arbitration. Talks with the mail handlers union remain in mediation, according to the Postal Service.

Although both USPS and union negotiators are typically tight-lipped about the status of contract talks, there’s no question that the latest round has been exceptionally difficult. The National Rural Letter Carriers’ Association and the Postal Service are already in arbitration. Although the Postal Service clinched a new contract last year with the American Postal Workers Union, the final deal created a two-tier wage system that means new hires will make 10.2 percent less on average.

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Postal union consultant calls on Postal Service to think bigger

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Six months after its hiring by the National Association of Letter Carriers, the Lazard Group is out with recommendations for turning around the U.S. Postal Service. Not surprisingly, the Wall Street firm doesn’t see salvation in USPS management’s current strategy, which involves cutting lots of jobs, post offices and processing plants.

“Instead of focusing on shrinking its network and capabilities, the Postal Service needs an ambitious rethinking of its business model,” says the six-page “white paper.”

As an alternative, Lazard calls on the Postal Service to exploit its “last mile” delivery advantage to keep expanding its parcel business and offer new products and services. While recently announced initiatives like expansion of direct mail offerings to small business customers are a start, they “will require far more aggressive roll-out and many more such ideas to better leverage the Postal Service’s last-mile advantage,” according to the paper.

Along the same lines Lazard also urges the mail carrier to get into new lines of business. Although the paper doesn’t say whether changes to existing legal restrictions should be considered, it notes that the German postal service has privatized and moved into logistics and freight forwarding. Finally, Lazard suggests that–in the context of “shared sacrifice”–the Postal Service have more freedom to raise rates (you can be sure that’s gotten the attention of the mailing industry).

The paper was released Tuesday, the same day the Senate took up S. 1789, the first major piece of postal legislation to make it to the floor of either chamber since passage of the 2006 Postal Accountability and Enhancement Act. Lazard called the bill a “stop-gap measure that facilitates the Postal Service’s ‘shrink to survive’ plan.”

That critique brought a chilly response from Sen. Tom Carper, D-Del., one of the measure’s sponsors. In a statement, Carper labeled the Lazard paper “thin on data, analysis or fresh ideas for modernizing the Postal Service.

“Rather, it’s thick with tired attacks on the Postal Service and mischaracterizations of the bill before the Senate . . . which, I might add, is the only bipartisan proposal in Congress that stands a chance of preventing a total collapse of the Postal Service in the coming months.”

The NALC announced the hiring of Lazard, as well as that of former presidential adviser Ron Bloom, in October.


Postal Service and mail handlers heading into mediation

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For those keeping track of the three-ring show known as U.S. Postal Service labor negotiations, the National Postal Mail Handlers Union reports that a federally appointed mediator is now in place to help the two sides settle on a new contract. The mediation process can take 60 days; if it fails, the next step will likely be binding arbitration.

An impasse was declared in late January in the Postal Service’s contract talks with both the mail handlers union and the National Association of Letter Carriers. The NALC announced the appointment of a mediator last month. “We’re working hard,” President Fredric Rolando said in a statement today. “We’re committed to reaching an agreement through the mediation process.”

But the National Rural Letter Carriers’ Association is already in arbitration. In an update posted earlier this month on its web site, the NRLCA reported that both sides had concluded their introductory cases before a three-member arbitration panel. As a matter of policy, USPS officials don’t publicly discuss labor negotiations. By the NRLCA’s telling, however, the Postal Service attempted to persuade the panel that its financial condition “requires dramatic actions to curb or reduce wages, COLA allowances, paid leave, health and other benefits that rural letter carriers and this union have worked hard to achieve.”

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U.S. Postal Service labor negotiations collapse

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This probably comes as a surprise to just about no one, but an impasse was officially declared today in contract talks between the U.S. Postal Service and two unions: the National Association of Letter Carriers and the National Postal Mail Handlers Union.  The next step will presumably be mediation or binding arbitration.

The impasse comes two months after prior contracts with both unions officially expired Nov. 20. All sides kept talking after that through two extensions,  but could not agree on another extension to keep negotiations alive past today.  The parties “currently are discussing how they will proceed,” USPS spokesman Mark Saunders said in a news release. “The existing contracts will be followed until terms of a new contract are resolved.”

The Postal Service is already in arbitration with the National Rural Letter Carriers’ Association. Members of its fourth union, the American Postal Workers Union, ratified a new contract last year that will run until May 2015.

No official word on what triggered today’s breakdown, but the Postal Service has made no secret of its desire for cost-cutting concessions, at least some of which labor was bound to resist. In  a news release, NALC President Fredric Rolando said it was the Postal Service’s decision to end negotiations.  Calling the decision a disappointment, Rolando said the union “will pursue a negotiated agreement through mediation and prepare to vigorously defend our members in  interest arbitration, if it reaches that step.”

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