FRIDAY JUNE 19, 2009

THE 2009 POSTAL FORUM BIG HIT WITH DELEGATES
Delegates to Canada’s Postal Forum held June 11 at the Intercontinental Toronto Centre,
voted overwhelmingly in favor of making this an annual event, according to written exit polls that ranked content, relevancy, engagement, and potential for positive action. The Forum attracted delegates from the United States and Canada, across all business sectors.

Participants from Canada Post and industry addressed issues of common interest, and working together was a common theme throughout the Forum events. Opening remarks set the stage, as NAMMU President, Kathleen Rowe, noted that tough economic hardships are the reality, and tough business decisions are being made: “This Postal Forum is about the business of mail, and everyone in this room is a stakeholder. We need to work together to achieve success.” She noted, however, that all advertising revenues are down – not just mail volumes – and the mail medium holds a “customer preference” winning hand. “The mailing industry is poised for recovery, and we know that recovery won’t return us to the old picture – there will be a new normal. Sharing our visions and business priorities will help us all skate to where the puck will be,” said Rowe.

Action points and the Executive Round Table Wish Lists will be circulated to attendees in the Forum recap, and have already been prioritized for action by Forum delegates. This success would not have been possible without the goodwill and expertise of all presenters and discussion leaders. NAMMU is also very grateful to the 2009 Corporate Sponsors, as well as the Forum event sponsors. We are particularly appreciative of the support shown by the Presenting Sponsor, the Canadian Gas Association.
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USPS UNDELIVERABLE AS ADDRESSED VOLUME UP – COSTS DOWN
PostCom reports the USPS at the recent National Postal Forum shared data comparing Undeliverable-as-Addressed (UAA) mail volumes and costs between FY 2004 and FY 2008. The data revealed that while UAA volume has gone up since FY 2004...USPS costs for handling UAA have gone down.

USPS manager of address technology Jim Wilson told Forum session attendees that total UAAvolume has grown from 9.724 billion pieces in FY 2004 to 10.076 billion pieces in FY 2008, but the USPS’ UAA costs have declined from $1.856 billion in FY 2004 to $1.639 billion in FY 2008.

The Postal Service’s costs for forwarding UAA mail were $326 million for FY 2008, compared to $422 million for FY 2004, he said, but the volume of forwarded UAA had dropped from 1.985 billion pieces in FY 2004 to 1.789 billion pieces in FY 2008.

The volume of return-to-sender UAA mail also dropped from 1.603 billion pieces in FY 2004 to1.436 billion pieces in FY 2008, Wilson reported, with the USPS’ costs declining accordingly from$822 million for FY 2004 to $727 million for FY 2008.

The volume of UAA pieces treated as waste by the USPS grew from 6.135 billion pieces in FY 2004 to 6.851 billion pieces in FY 2008, with costs also increasing, from $270 million in FY 2004 to $365 million in FY 2008.
Wilson did not provide volume data for “other” UAA pieces, which cost the USPS
$343 million in FY 2004 compared to $221 million in FY 2008.

The FY 2004 data source was a Christiansen UAA study commissioned by the USPS, and the FY 2008 volumes and costs were drawn from the FY 2005 estimates made by Christiansen in the study, taking into account projected mail volumes, labor costs, full deployment of the USPS’ Postal Automated Redirection System (PARS), and other factors.
The study is available on the Postal Regulatory Commission web site as part of the USPS’ R2006-1 rate case library references (USPS-LR-L-62). The costs represent USPS costs of UAA mail only and do not take into account the mailer’s costs of producing and mailing the piece, or the cost of lost sales.

Delegates to Canada’s Post Forum during the 100 Per Cent Deliverable Mail plenary session hosted by Alexis Zamkow, General Manager, Direct Marketing Data and Services; and Ross McKenzie, Mailing Innovations; asked if Canadian numbers could be estimated. These delegates think that Canadian numbers will carry more weight with mailers and suppliers they are trying to convince to upgrade the quality of their mailing files, by using the new and existing tools available to them.

$1-BILLION IN AID FOR PULP INDUSTRY
A report by the Conference Board of Canada says Canada’s paper industry is expected to lose $513 million in 2009, the seventh consecutive year of losses. The main drivers making matters worse for the Canadian industry are the strengthening Canadian dollar and the U.S. black liquor tax credit, which the Board estimates is pumping $6 billion into the U.S. pulp and paper sector. (The Gazette June 12) Yesterday, the Canadian government unveiled a $1-billion aid program for the struggling forestry industry, a package narrowly crafted to rescue the sector from damage caused by the U.S. subsidies, without sparking a trade war. (The Globe and Mail June 18)

It is estimated that only 27 of the 71 Canadian mills produce black liquor and would be eligible to claim the aid. Those that use a thermomechanical process instead of chemicals to make pulp are not eligible. However, Avrim Lazar, President and CEO, Forest Products Association of Canada, (FPAC) thinks the government got it right with support for environmental advancements in the pulp and paper sector. “This announcement is smart policy and smart spending. It will help mills become more energy and cost efficient, While making them more competitive and better able to keep pulp and paper jobs in Canada,” says Lazar.

FINANCIAL EXECS SEE PROFITABLE 2010
According to a study conducted by Canadian Financial Executives Research Foundation (FEI Canada) and sponsored by Ernst & Young, the worst of the earnings slump may be over for Canadian companies. Fifty-four per cent of senior financial executives surveyed expect higher or unchanged revenue this year. Over half the executives surveyed thought the economy would return to normal growth rates in early 2010, while 30 per cent expect a recovery in 2011. Liquidity and cash management were the two top financial issues.According to reports in The Gazette June 18, 68.6 per cent of respondents had implemented or were planning cost reductions, about half said they planned to cut staff, and 62 per cent anticipated a freeze on executive compensation. 65 per cent of companies said they would defer capital investments. Other cost-reduction initiatives included payroll rollbacks, more outsourcing, and reducing discretionary spending, travel, trade show participation, and advertising.

GOOD NEWS – THE 2009 NAMMU AWARDS
You could win a NAMMU Award! It’s NAMMU Season – answer the call today!
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