STRATEGIC VIEW

USPS ends third quarter deep in the red.
The Postal Service released its unaudited third quarter financials for Fiscal Year (FY) 2012 which showed a $5.2 billion net loss, compared to a $3.1 billion net loss for same period last year (SPLY). The Postal Service reassured all stakeholders that it will continue to make payment to all employees and suppliers while delivering to every address every day. It also promised coverage to all current retirees.

Liquidity concerns plague the USPS
The USPS said in its quarterly report that “even without making $11.1 billion of scheduled PSRHBF payments in the fourth quarter of 2012, current projections indicate that the Postal Service will have a low level of cash and liquidity at September 30, 2012. This position will worsen in October of 2012, when the Postal Service is required to make its annual reimbursement payment of approximately $1.4 billion to the Department of Labor (DOL) for workers' compensation, in addition to paying its normal operating expenses. Although the cash position is projected to improve slightly for a few months during the fall mailing season, current projections indicate that, by spring 2013, the Postal Service will again have a low level of cash and borrowing capacity. Further, these projections also indicate that the Postal Service will be unable to make the $5.6 billion prefunding payment due by September 30, 2013.

RULES AND REGULATIONS

PRC approves Valassis NSA
The PRC has approved the Valassis Negotiated Service Agreement (NSA). Although most of the 44 intervenors were against this NSA, the Commission moved forward with approval, addressing each of the concerns raised by newspapers and various Congressman. The Commission, in its analysis, found that this NSA will improve the Postal Service’s net finances, will not cause unreasonable harm to the marketplace, and that the terms are available to similarly situated mailers. The Valassis NSA will be added as a new product on the market dominant product list.

OPERATIONS MADE EASY

USPS price change.
The USPS upcoming price change, according to its 2013 Release Schedule, will be implemented on January 27, 2013. The price announcement will be made sometime in October 2012 for both Mailing and Shipping Services.

USPS publishes new MTEOR agreements
The Postal Service has published a new MTEOR agreement that the industry will have to agree to prior to using the new MTEOR system for the first time.