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Harry’s Corner – Here We Go Again – “6-2-5” is Back

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Submitted by Harry Stephens, President/CEO of DATAMATX
June 19, 2017

In my experience, few things are more true than the fact that knowing you need to do something—and then actually doing it—are two very different things. There is perhaps no better example of this than the longstanding (and ongoing) conversation about the financial difficulties of the U.S. Postal Service and what to do about them.

I read two articles on the subject in the Washington Post and The Wall Street Journal this past month, reporting that the latest entrant into this often controversial conversation is President Trump, by way of his 2018 budget plan. The plan leaves the door open for reducing the current six-day mail delivery “where there is a business case for doing so.”  You can expect that if this proposal materializes it will be met with upset, just as it did when then Postmaster General Patrick Donahoe attempted to unilaterally end Saturday mail delivery in 2013. That attempt stirred up strong resistance from members of Congress and the National Rural Letter Carriers’ Association, among others, and ultimately failed. Since then, proposals to address the Postal Service’s financial woes have not included reducing delivery.

Back in 2008, I floated the idea in this column of eliminating Wednesday delivery, recognizing that direct mailers prize Saturday delivery, when most of us are at home and have more time to look at our mail. Then in 2009, I wrote another column urging the need to take a hard look at eliminating Saturday delivery, and to step forward and propose other cost-cutting ideas if you have them.  Mail is important to all of us for many different reasons, so I am sure reducing mail delivery is still a difficult pill for many to swallow. However, I continue to maintain it may be a necessary step to help end the financial struggles of the USPS, which have been a problem for more than a decade now. We need to accept that we are going to have to reach a compromise somewhere. Corporate enterprises as well as postal customers, especially rural America, may have to give up something to keep postage rates affordable.

We all know that having a difficult problem to solve can be overwhelming and even paralyzing. But even taking small steps can make a difference. It reminds me of a story I like about a little boy on a beach littered with washed-up starfish. As the boy was throwing them back in the water one by one, a man came up to him and said, “Son, what are you doing? There are thousands of starfish on this beach. You can’t possibly make a difference.” The boy picked up a starfish and threw it in the water and replied, “It made a difference to that one!”

Of course, eliminating one day of mail delivery—whether that day is Wednesday or Saturday or another option—won’t solve all the financial concerns of the USPS. But when you consider that it will take carriers off the road for one day a week, and the savings that will be realized in terms of labor costs, gas and truck maintenance, it will certainly make a difference. And for that reason alone, I think it is worth talking about again.

My fundamental point has been and still is this: The financial viability of the USPS isn’t just the USPS’ issue to solve. It is an issue for everyone who relies on the mail, whether for business or personally. It is our issue, and I think the one thing we can agree on is that something needs to be done to address it. The problem is that actually doing something, as we all know, is a very different thing.

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations.  He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service.  He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus.  As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers.  Find more information about DATAMATX at www.datamatx.com. 

Harry’s Corner – 47-47-6 Unintended Consequences

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Submitted by Harry Stephens, President/CEO of DATAMATX
November 21, 2016

We held our annual INg meeting at Orlando in conjunction with this year’s Graph Expo in September. One of the speakers at our meeting was a labor attorney and among the many things he spoke to us about was the upcoming Overtime Rule. For those of you that may not know specific details on this new rule, starting on December 1 2016, the salary threshold to avoid paying overtime will move to $913 per week (an annual salary of $47,476) from the current $455 per week.  Right now, hourly workers, lower-wage earners and non-managerial workers must be paid 1.5 times their hourly wage when they work more than 40 hours in a week. Under the new rule, an estimated 4.2 million workers, including those on salary, will be eligible for overtime.

On November 10th, at the Fall Board of Director’s meeting for the Georgia Chamber of Commerce, where I am on the board, the issue came up again. The Georgia Chamber of Commerce represents the unified voice of Georgia’s business community with the motto “What’s good for business is good for Georgia” driving its policy and legislative direction to ensure the future of economic mobility for all Georgians. So it makes sense that business and job creation are always a focus. I brought up this impending Overtime Rule at the meeting, encouraging both the local and national Chamber of Commerce to vocally oppose this type of job creation loss initiative as it will certainly have unintended consequences, hurting the people it intended to help.

For example, in lower-paid jobs where the minimum wage is also increasing, employers are put in the difficult situation of having middle managers making considerably less per working hour than new hires. Think of the restaurant industry where wages may be lower, hours are long and profit margins very thin. While this rule is meant to increase take-home pay, these changes may limit employment and advancement opportunities in this industry and others like it. Another good example—college graduates looking for their first job.  An employer will certainly have to think twice about hiring an inexperienced worker who needs time to “learn on the job” for an annual salary of $47,476.00 or unbudgeted overtime. Jobs are hard enough to get when you don’t have the right experience. This rule will make it even more difficult. Unintended consequences. Hurting the people it intended to help.

For every business, this rule causes a number of consequences as well, particularly when it comes to payroll. We essentially have two choices. If the increased salary threshold creates newly non-exempt employees to stay compliant, we need to either pay employees higher salaries, or pay overtime wages.

In preparation, classifying employees correctly as to whether they are exempt or non-exempt will be extremely important, particularly if you are in a business that has peaks in productivity at times that require employees to work longer hours, like month end or holidays. Because of this, I recommend checking out the Department of Labor or your state’s wage enforcement agency to get the exact requirements. The last thing a business needs is unexpected financial or legal consequences for not clearly stating an employee’s classification, entitlement to overtime and tracking of such.

It will also be important to have clear communication with employees about record keeping. For some who have been proud of being a “white collar worker” now required to keep track of time, this can be difficult. Explaining the rule and how it will affect them and your business will ease any misconceptions they may have about any changes in job description or pay.

Oh, and another piece of “good news.”  The minimum salary threshold will automatically increase every three years based on wage growth. The first automatic increase will happen on Jan. 1, 2020, which means more employees will become exempt as the threshold rises. Now, if you think you are in the clear because you are a small business, I have more “good news.” The Department of Labor FAQ fact sheet does say that “the proposed rule [applies] to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses.” Ok. If your business makes less than $500,000 of annual revenue, is it exempt? It appears the answer is still no. Under the Fair Labor Standards Act (FLSA), individual employees may still be “covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods.”  Like I said earlier – research the information on the Department of Labor’s website or your state’s wage enforcement agency to get the exact requirements of the ruling.

There is no way around the fact that this ruling is bad for business—especially small to medium businesses that have a hard enough time growing their businesses as it is. We need dedicated employees who consider themselves professionals and want to work the long hours often needed to get ahead and grow in their profession. Employers will now have a hard time giving them that choice. Instead of benefiting workers, the rule takes away flexible schedules and maybe even certain career pursuits. For businesses, it places yet another financial burden to manage. Perfect examples of unintended consequences hurting the people it intended to help.

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. He has been active in the Atlanta business community for over 40 years in various professional and trade organizations, most recently as a board member of the Georgia Chamber of Commerce.  As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations.  He serves on the Executive Board of the Greater Atlanta Postal Customer Council,  Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service.  He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus.  As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers.  Find DATAMATX at www.datamatx.com

 

Harry’s Corner – Adding Value with 3-4-1 is Another Win-Win

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Submitted by Harry Stephens, President/CEO of DATAMATX
October 5, 2015

I have just finished my usual round of September travels—starting with the Major Mailers Association, the National Postal Policy Council (NPPC) where I serve on the board, then on to the INg workshop and finally a visit to Graph Expo to see what is new. I always learn a lot on these whirlwind trips and this one was no exception. This year there was a great deal of buzz around inkjet technology and how it makes it more affordable to add color to our documents to keep print alive and relevant. It is a proven fact—color delivers value. Of course we still need to find a way to communicate the value it has in order to charge for it. That’s why the leaders in our industry are gathering as much information as possible on how to produce color at a reasonable cost—and work to make informed decisions on investing in equipment that allows for more affordable full color capabilities.

Delivering value was also the buzz at the NPPC meeting. James (Jim) P. Cochrane spoke to us about the need to make mail more relevant. We have to find ways to add more value to mail in order to keep it in the system. Jim is a 41-year veteran of the USPS and has been acting chief marketing and sales officer and executive vice president (CMSO) since April 2015. He reports to the Postmaster General. What I liked about Jim is that he understands the need to be flexible and change things if needed. He directed the advancement of new mail intelligence, engineering systems, information technology systems, payment technology, secure digital solutions and corporate information security to meet the changing needs of today’s marketplace.

As Jim spoke about relevancy and value, what immediately came to my mind was “2-4-1 and Everybody Wins.” It was the title of a column I wrote for this very publication four years ago. 2-4-1 came about at a Major Mailers Association meeting where Paul Vogel, the president and chief marketing/sales officer for the USPS at the time, spoke about improving the USPS experience for its customers. After his talk, one member brought up the idea that perhaps the USPS would approve allowing business mailers to mail a two-ounce piece at the one-ounce rate. Every major mailer at the meeting liked this idea, the USPS implemented it and it was highly successful.

I began to think about all I have been learning about inkjet technology having been at the recent Inkjet Summit and its ability to lower the cost per page; and if 2-4-1 was a success in increasing mail by making mailing more documents affordable, why build a better mousetrap—just make it larger by now allowing three ounces at the one-ounce rate. That would give business mailers a little more latitude and alleviate the worry of losing the discount to mail at the single piece rate if they were slightly over the two ounces—adding value. It would help support the demand for creating (and mailing) more documents in color—adding value. It would allow mailers to get the mail to the recipient faster as 3-4-1 would be at the threshold of the cutoff for Standard Mail—adding value. Of course, it would require a 6 x 9 envelope, but many folks are used to receiving transactional bills that way already.

As it turned out, adopting the 2-4-1 suggestion on the part of the USPS was easy. First, there were no legal restrictions to worry about and it didn’t need the PRC to rule or Congress to approve, as it was not a rate increase or a mandate. So adopting 3-4-1 could happen just as smoothly.

At these meetings, we openly discuss ways to create more value with printed mail. So after Jim spoke, I made the suggestion that moving up an ounce to ‘3-4-1’would be a serious additional stimulus for marketing via First Class. As I said earlier, I think Jim Cochrane is a person who welcomes changing things if it makes sense—and 3-4-1 certainly does. In 2011, in this very publication, I predicted 2-4-1 would be a win-win for mailers and the USPS and it was. I think 3-4-1 will be a win-win as well—providing the extra value needed to keep printed mail relevant.

What’s your opinion on 3-4-1? I am interested. You can email me at hstephens@datamatx.com. I hope to hear from you!

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service . He is also president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus. As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers. Find DATAMATX at www.datamatx.com.

Harry’s Corner – Star ‘n Cones

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Submitted by Harry Stephens, President/CEO of DATAMATX
May 11, 2015

Anyone who knows me well knows I love everything about the mail. Even when I travel, I like to visit the local post office to see what it is like—particularly in countries outside the U.S. Recently, I was in Italy on a trip that took us from Rome to hilltop towns built up to 10 centuries ago and to Florence. It was quite a trip with our driver (Paulo) who explained the history of things along the way. Of course, my request was always to stop in each town to see how they managed their mail. What I learned was the post offices in Italy don’t resemble any post office we have here in the United States. Unlike here, where we view the post office as a place to buy stamps and send packages, the Poste Italiane is a place where you can accomplish all sorts of tasks.

You can pay certain bills, collect a pension check, renew a passport and even buy health insurance. Seriously—you can. It is also a competitive operator in the area for financial and payment services: savings accounts, interest-bearing bonds, national and international money orders.

Additionally, you can shop for things like books, CDs and even cell phones. There are posters all around promoting these things and there are consultants on site to help you with whatever you need. In Florence, when I entered the door of the Poste, I saw a machine that dispenses numbered tickets based on what you were planning to do there. Then, similar to the DMV, you waited until your number came up on the screen. The Florence post office was a veritable hub of activity.

Standing there I started thinking about our post offices—what may be missing and it sparked an idea (if you read my column, you know I have made several) for an option that might help alleviate some of the financial burden it carries. If European towns use the post office as a hub for other things besides mail, why can’t we? I know we can’t let a government institution go into banking or sell insurance. Private enterprise would not allow it. But how about getting support from private enterprise in another way?

For example, what if a company like Starbucks® stepped up and decided to help out the situation by creating a franchise model that would rent space from the USPS, similar to how the USPS operates within a Staples store? Or a telecommunications provider, like Verizon® or T – Mobile® have a franchise model that rented space from the USPS? If it was the type of products and services people wanted, and the franchise was located within the USPS real estate, perhaps it would spur activity around the post office itself, encourage local involvement and help offset the costs of operating the building.

This idea strikes me as particularly relevant for local post offices in rural areas where services like the ones mentioned are needed and not always available. A model like this might be a good gesture on the part of a company like Starbucks or Verizon and bring in more foot traffic to help keep our smaller post offices open. A few years ago there was a survey that found at least 6,000 post offices in the U.S. served a volume of only 3.3 people each day. 3.3! People in these areas don’t want to lose their post office—or their jobs. So if it’s some of my earlier suggestions, like “no work Wednesdays,” or decreeing “Saturday a day of rest” that might help save the USPS—or sharing space with Star ‘n Cones—the point is we all know something has to change.

Until next time – Harry
Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service . He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus. As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers. Find DATAMATX at www.datamatx.com.