The Biggest Stories of 2012, the Year of No

It's been a year of "no" in this little corner of the universe -- no postal reform, no big paper merger, no more listing on the RISI Top 50, no major bankruptcies. There was even a double negative: no No Print Day.

The hot topic this year for Dead Tree Edition readers has been retirement: Nine of the 10 most-read stories dealt with efforts (or lack thereof) to downsize the U.S. Postal Service workforce by getting more employees to quit.

Here's a brief recap of the year's highs and lows:

• Most popular article: By a landslide it was USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies, with 42,000+ page views, more than double that of any other story.
• Most commented article: 8 Reasons USPS Productivity Is Declining: The Employees Speak Out, with a whopping 74, including many insightful responses from the Postal Service's front lines.
• Most influential article: Some would say it was Greenpeace Sticks It To Toshiba: Company Has No Paper Policy because an embarrassed Toshiba pulled the plug on its hypocritical No-Print Day the next day, but I suspect that was a coincidence. My vote is for 10 Questions About Toshiba's No-Print Day, which nine days earlier brought Toshiba's greenwash effort to the attention of a fairly small audience, but an audience that quickly spread the word to more influential writers and industry leaders. Dead Tree Edition only lit the spark for what became the Yes Print Day! movement. The flames were fanned into a raging fire by the likes of Printing Industries of America and Deborah Corn -- The Social Media Goddess of the printing industry, Intergalactic Ambassador to the Printerverse, The Princess of #Printchat, and an advocate for Girls Who Print (whose unofficial slogan is "We can manage our PMS -- and our CMYK too!").
• Not so influential: In 2010 and 2011, RISI named D. Eadward Tree to its Top 50 list of the most influential people in the global pulp and paper industry because of Dead Tree Edition's work on the black liquor tax boondoggles for U.S. pulp producers. But that changed this year, as explained in Mr. Tree Gets the Axe, one of the least popular articles of the year with only 525 page views.
• Most popular non-postal (mostly) article: Which of These 4 Print-Related Giants Is Headed for Bankruptcy? Cast Your Vote, which explored whether USPS, Barnes & Noble, Quad/Graphics, or Verso Paper would go into the tank during 2012. Despite what the poll predicted, all have made it through the year without a visit to Chapter 11 Land.
• Most studied article: Lessons About the New World of Publishing from an Unlikely Source, on which the average reader spent more than six minutes.
• Most Shakespearean headline: Did Verso Come To Purchase NewPage Or To Bury It? As it turns out, Verso did neither. North America's two largest makers of coated paper will apparently not merge, and NewPage is on the verge of exiting bankruptcy protection.

I'm following the common practice of my industry, magazine publishing, by publishing a year's best/biggest/sexiest/etc. list before the year is even over. There's some danger in that, but I think the main events for the rest of the year are pretty predictable:

• Dec. 21: We will survive the winter solstice.
• Dec. 22: A publicist hired by the Mayans will announce that their calculations were only slightly off: 2012 is not the end of Time but the end of Newsweek. (Technically speaking, they will be wrong; Newsweek is not going away, it's just discontinuing its print edition. Technically speaking, Newsweek died about three years ago.)
• Dec. 25: Millions of Americans will ooh and ah over sheets of coated freesheet paper printed with bright colors (aka Christmas wrapping paper), then promptly shred it with their bare hands. Some of it will get recycled.
• Dec. 31: Despite widespread agreement that 2012 was the year the Postal Service's financial situation needed to be addressed, Congress will go home having done nothing about USPS -- except for taking the heroic step of naming more post offices.

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Postal Service Plans To Sell Magazine Subscriptions

The U.S. Postal Service, at the urging of publishers, is planning to sell magazine subscriptions on its web site and to promote them at post offices.

“The USPS is moving forward on a plan to offer magazine subscriptions for sale on usps.com,” says Idealliance’s summary of the recent Mailers’ Technical Advisory Committee (MTAC), a joint USPS-mailers groups. “Also, the USPS and mailers are developing a plan to have posters in retail sites with QR codes and other ways of linking to magazine subscriptions.”

When the idea originally surfaced at an MTAC meeting early this year, it included selling subscriptions in post office lobbies, as stores including Best Buy do at checkout. But setting up such a program for hundreds or even thousands of publications might not be worth the effort. It will be easier to test the QR-code posters in select locations.

Postal officials’ interest in promoting magazines may seem odd in light of the Postal Service’s claim that the Periodicals class is its most unprofitable type of mail. But that supposed unprofitability is the result of allocations for fixed costs, some questionable cost accounting, and perhaps handling costs that are unique to newspapers and not magazines.

There doesn’t seem to be much question that delivering more magazines would be beneficial for USPS. And magazine subscriptions also lead to additional mail that is more profitable, such as invoices and renewal notices.

Thorny issues
But having the Postal Service sell magazine subscriptions also raises some thorny issues:

• Will there be complaints that USPS is using its monopoly power to compete unfairly with businesses like subscription agents and Amazon? 
• Will the subscription offers only be for the ink-on-paper versions of the magazines, or will combined print-and-digital packages be allowed? How about electronic-only subscriptions? 
• Will publishers have to pay a fee to have their magazines featured on the QR posters? Will the Postal Service get a cut of the subscription revenues? 
• If a magazine distributes some of its subscriber copies via means other than the mail, will it still be eligible for the program? 
• What about newspapers that are delivered primarily by mail? They will complain vociferously if they are excluded. 
• Should people who buy subscriptions via USPS still “expect six to eight weeks for delivery”? 

 Related articles: 

• Don’t Blame ‘Overpaid Postal Workers' for Rising Periodicals Costs  
• Do Postal Execs Want To Lose Money on Periodicals? 
• Thrown Overboard: Publishers Feel Abandoned by the U.S. Postal Service  
• Postal Study Is Bad News For Publishers

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Employee Buyouts Surpass USPS Projection

At least 23,000 APWU-represented employees have signed up for incentives to leave the U.S. Postal Service, according to Postmaster General Patrick Donahoe.

Donahoe provided that number at a "State of the Postal Service" presentation last week to leaders of the Mailers' Technical Advisory Committee (MTAC), according to notes released yesterday by Idealliance, a trade organization of publishers and their suppliers. Postal officials had predicted that 15,000 to 20,000 of the approximately 115,000 eligible employees would take the buyout, which includes $15,000 and for many the chance to take early retirement.

Full-time employees had until yesterday to accept the buyout or to change their minds if they had already signed up. Part-timers' deadline is Jan. 4.

Donahoe also told the MTAC leaders that USPS is urging the lame-duck session of Congress to take action on postal reform and not start over in 2013, according to the Idealliance summary. The key issues are removing the burden of prefunding retiree health benefits and allowing five-day delivery, he said.

Related articles:

• USPS Underestimates How Many Employees Will Take the Money and Run, Poll Says
• Congress Is Fixin' To Fix the Postal Service  
• USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies

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Weeklies' Weakness Pushes Down 3rd Quarter Newsstand Sales

Although the latest statistics on North American newsstand sales look gloomy overall, they also show significant growth for many magazines.

Third-quarter newsstand sales in the U.S. and Canada totaled 874.2 million, down nearly 8% from a year ago, according to MagNet.

“Newsweeklies and especially celebrity titles continue to lead the decline,” the industry consortium reported. But for non-weeklies, MagNet sees signs of “high newsstand consumer demand [for] quality publications that are not providing huge subscription discounts.”

Among major monthly titles experiencing healthy growth were National Geographic (23.8%), Shape (9.5%), and Consumer Reports (7.0%). (Is it just a coincidence that National Geographic and Consumer Reports have also invested heavily in their web sites? Maybe digital and print are not enemies after all.)

Sales for the Top 50 publications, which include most of the celebrity weeklies, were down 8.3%. But the next 50 actually increased their sales 7.4%. Nearly one-third of the Top 100 enjoyed increases, according to MagNet.

Another favorable trend: Less waste. Publishers responded to weakening newsstand sales by distributing 64 million fewer copies than they did a year ago, including a 15.7% reduction for weeklies. But because unit sales did not decline as much as the reduction in draw, the proportion of newsstand copies that were sold increased by nearly 2 percentage points for the weeklies and nearly 1 percentage point for the non-weeklies.

Related articles: 

• Trouble in Magazine Land: We're Running Out of Celebrities!  
• Print Is Dead? Not For This Growing Publication Niche  
• Invasion of the Bookazines, Featuring the Return of the Living Dead  
• 8 Questions About Newsweek's Future

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USPS Underestimates How Many Employees Will Take the Money and Run, Poll Says

The majority of voters in a Dead Tree Edition poll predict that more than 20,000 APWU members will accept incentives to quit.

Of the 1,577 votes in the poll that ended tonight, only 16% agreed with a postal executive's recent estimate that 16,000 to 20,000 of the 115,000 eligible employees would accept the buyout package. Nearly 62% of voters predicted a higher number.

But voters also concluded that the "in the range of 35,000" estimate from William Burrus, former APWU president, is too high. Only one-fifth of voters predicted that more than 30,000 members of the Postal Service's largest labor union would call it quits.

The buyout package includes $15,000 and, for many employees, an even more valuable opportunity to take Voluntary Early Retirement.

Dead Tree Edition estimates that, if successful, the buyout program could reduce the Postal Service's compensation costs by more than $1 billion annually. But USPS seems to be doing little to present the buyout package in the best light, for example sending thousands of employees inaccurately low estimates of their retirement benefits.

Ironically, the APWU, which stands to suffer a significant loss of dues income as a result of the buyouts, is doing more than USPS to clear up the confusion about retirement benefits that may dampen response to the offer.

For example, it sent out a bulletin today informing members about the FERS annuity supplement, about which the Postal Service has been mostly silent. And Burrus urged those considering retirement to "take the money and run" because the Postal Service is unlikely to offer them a similar incentive in the future.

Related articles:

• USPS Seeks 'Soft Landing' For Downsized Employees, Donahoe Says 
• USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies
• Response to Buyout Offer Better Than USPS Expected  
• New Poll: How Many Postal Workers Will Take the USPS/APWU Buyout Incentive?
• The Hidden Benefit of Postal Service Retirement 

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Politicking Leads To Profitable October for USPS

Bolstered by election-related mailings, the U.S. Postal Service experienced something unusual in October -- profitability.

USPS released preliminary financial results late yesterday showing net income of $61 million last month, the first month of Fiscal Year 2013, versus a budgeted loss of $244 million and last year's loss of $139 million.

If not for a $467 million charge for prefunded retiree health benefits, the agency's net would have been $528 million -- a profit margin of more than 8% on revenues of $6.03 billion. Those prepayments have been likened to an interest-free loan to the federal treasury that are designed to obscure the true size of the federal budget deficit. (See Congress Hears the Truth About Postal Service Finances.)

The volume of Standard mail -- derided as "junk mail" by critics -- was up 16% over October 2011. Standard class revenue rose only 10%, evidence that the big volume increase was concentrated in the kind of low-priced mass mailings of letters used by political campaigns.

Also helping the bottom line was better productivity: The Postal Service delivered 9% more mail pieces than in October 2011 but needed only 3% more work hours to accomplish that.

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The Hidden Benefit of Postal Service Retirement

Question: When does $16,638 actually equal nearly $30,000?

Answer: When a U.S. Postal Service employee compares the retirement annuity the USPS says he will receive to the payments he will actually get. Ignorance of the additional payments has hindered employees from accepting early-retirement incentives that are so crucial to the Postal Service’s cost-cutting efforts.

Consider the case of “Joan”, an APWU member who is eligible for Voluntary Early Retirement (VERA) and a $15,000 incentive to quit as part of a major USPS downsizing effort. In early October, as part of the incentive program, USPS sent her a notice that her retirement annuity would be $16,638 annually.

After factoring in her other potential income sources, Joan at first decided she couldn’t afford to quit her $53,000-per-year job. But fortunately, she dug a little further and talked to experts in the arcane world of USPS retirement benefits.

An additional $13,000
That’s how Joan learned that if she took the VER she would be eligible for an additional “FERS annuity supplement” of $13,020 annually when she turns 56 in a few years, says Don Cheney, who for years has been helping fellow APWU members understand their various retirement benefits.

“With this new information, she is taking the VER,” Cheney says.

The FERS annuity supplement is “a quasi-Social Security payment prior to the start of the actual Social Security benefit at age 62,” writes Robert Benson, who runs the FedBens web site that calculates FERS annuity supplements and other federal benefits. (USPS has declined to license the software.)

Contrary to USPS strategy
Although thinning its ranks is one of the Postal Service’s major strategic thrusts, USPS does not tell employees how much their FERS annuity supplements will be until after they make an irrevocable commitment to retire.

“Who in their right mind would sign a Statement of [Retirement] Irrevocability before getting all the facts needed for a decision to retire?” Cheney asks. The failure to provide such information, says Cheney, is dampening response to the current early-out program aimed at approximately 115,000 clerks, mechanics, and other APWU-represented employees. If successful, the buyout program could save USPS more than $1 billion annually, as explained in New Poll: How Many Postal Workers Will Take the USPS/APWU Buyout Incentive?

APWU members who were hired before 1984 “are leaving in droves,” says Cheney. As participants in the CSRS retirement program, “they get accurate annuity estimates.” “FERS postal employees were hired after January 1, 1984 and are hesitant to leave. They get incomplete annuity estimates that omit the monthly FERS annuity supplement.”

“The FERS annuity supplement typically ranges from $700 to $1,000 per month from age 56 to 62,” Cheney says. “It dwarfs the measly $15,000 incentive the Postal Service offers. Employees want to know: Are they eligible for it? When will they start getting it? How much is it?”

Afraid to retire
"I'm always surprised at the incredible misconceptions that our employees have about their retirement plan,” writes Roseanne Jefferson, a retired USPS benefits manager who pens the Postal Retirement column for PostalMag.com. “Particularly in the last years of their employment, they are so sure of their retirement benefits, and are so surely wrong. It has always amazed me how our organization is OK with the understanding that employees are afraid to retire, because they don't trust the HRSSC to get their retirement correct."

Jefferson wrote recently that she is being deluged with emails from APWU-represented employees workers who are considering the buyout. Many are confused about their benefits.

This message exemplifies the confusion, “Roseanne, I am leaving with the early out, I am a FERS employee and I am 58 and have 25 years. I don't know if I can afford to retire, my annuity is only going to be $1400 per month, I have to wait until I am 62 to collect my social security, and then I still have to wait until I am 59 and a half to begin my TSP [Thrift Savings Plan payout].”

Wrong on all counts, Jefferson replied. Immediately upon retirement, this particular employee is also eligible for a FERS supplement of about $800 per month and TSP payments of $397 per month, Jefferson wrote.

Unlike most federal agencies, the Postal Service does not offer individual counseling to employees who are considering retirement, even when it is using incentives to encourage them to retire. What it’s offering retirement-eligible APWU members, says Cheney, is “a group phone seminar with ten people plus their spouses that covers general questions only, not the specific ones that people have.”

Related articles:

• Response to Buyout Offer Better Than USPS Expected  
• Confusion, Misinformation Could Hinder USPS's Early-Retirement Push  
• USPS Retirement Mess: A Major Barrier To Downsizing
• Here's How the Postal Service Can Get Back Its Pension and Benefits Overpayments

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Congress Is Fixin' To Fix the Postal Service

Word is spreading of a bipartisan, bicameral effort among Congressional leaders to fix the U.S. Postal Service. Before anyone gets too excited, let's remember that "fix" can also mean:

• Castrate or spay
• Restore or repair
• Kill and preserve a specimen so that it can be studied under a microscope
• Give someone a dose of an illegal drug
• Take revenge (as in, "I'll fix him!")
• Arrange an outcome dishonestly, such as with a bribe or by stuffing a ballot box
• Establish something in a way that prevents it from changing (such as a fixed rate)

I'm just sayin'.

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Response to Buyout Offer Better Than USPS Expected

Unless a lot of postal workers get cold feet in the next couple of weeks, more employees will accept a $15,000 incentive to quit than postal executives had expected.

About 20,000 APWU-represented employees have already signed up for the buyout, Federal Times quoted Postmaster General Patrick Donahoe as saying today. That's at the top end of the 15,000-to-20,000 expected range the U.S. Postal Service provided last month and then reiterated last week.

Those who have signed up can back out before the Dec. 3 decision deadline, Federal Times' Sean Reilly noted. But it seems unlikely that many who signed up so far in advance would have a change of heart. Among the early sign-ups are some who had decided months or even years ago to leave as soon as a buyout was offered.

Thousands of the approximately 115,000 eligible employees are probably still digging through the complexities of postal pensions, annuities, Thrift Savings Plan payouts, tax implications, payments for unused leave, etc. to decide whether to take the money and run. Thanks to the incomplete information and lack of guidance USPS provides to potential retirees, the more postal workers learn about their various retirement benefits the better retirement usually looks.

So expect the number of employees who take the buyout to exceed 20,000. By Dead Tree Edition's rough calculations, that means the buyout could end up reducing USPS costs by more than $1 billion annually.

A slight majority of voters in a Dead Tree Edition poll so far believe the USPS estimate is too low. As the number of votes reached passed 1,000 this evening, 52% predicted that more than 20,000 would take the buyout. And 20% predicted the number would be above 30,000. Current results, and the chance to cast your own vote, are near the top of the right-hand column.
  
For more information on the buyout offer, see:

• Confusion, Misinformation Could Hinder USPS's Early-Retirement Push  
• Take the Money and Run, Burrus Tells Postal Workers  
• New Poll: How Many Postal Workers Will Take the USPS/APWU Buyout Incentive?

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New Poll: How Many Postal Workers Will Take the USPS/APWU Buyout Incentive?

Offering 115,000 APWU-represented employees $15,000 to quit will clearly be one of the best investments the U.S. Postal Service has ever made.

What's not clear is how big the investment and payback will be. In other words, how many eligible employees will take the buyout? Dead Tree Edition is asking its readers to make their own prediction (the poll is near the top of the right-hand column) on the early-out incentives that could yield $1 billion or more in annual savings.

When it announced the program a month ago, USPS said it expected 15,000 to 20,000 employees to participate.

Former APWU President William Burrus soon countered with his a much higher estimate -- "in the range of 35,000" -- and advised postal workers not to hold out for something better. (See Take the Money and Run, Burrus Tells Postal Workers.) But the Postal Service's chief human resources officer indicated recently that his estimate had hardly changed; it's now 16,000 to 20,000.

Eliminating a position held by a full-time career postal worker probably saves USPS at least $60,000 annually. And a new employee is likely to cost USPS only half of what a veteran career worker does, according to Burrus.

That means that if half of the early retirees are replaced, a total of 15,000 buyouts would save USPS nearly $700 million annually. But if 35,000 take the package, the savings could be nearly $1.6 billion.
So here are the five choices in the poll, with a description of each one:

1. "Fewer than 16,000": Who can afford to retire in this economy?
2. "16,000-20,000": This is what USPS officials predict, so it must be true.
3. "20,001-30,000": USPS has underestimated how badly some employees want out.
4. "30,001-40,000": Bill Burrus nails it on the head.
5. "More than 40,000": Katie bar the door!

Voting ends on Nov. 28.

Related articles:

• Confusion, Misinformation Could Hinder USPS's Early-Retirement Push  
• USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies  
• Postal Service Can No Longer Afford Money-Saving Tactics, Study Says  
• It's Official: Postal Service Has More Older Workers Than Any Fortune 500 Company  
• How Does the Postal Service Discourage Early Retirement? Let Me Count the Ways

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Superstorm Sandy's Seven Lessons About Print Media

Many readers in the mid-Atlantic region report a new appreciation for print media in the wake of Sandy’s mayhem. Among the observations they passed along are:

1. The best photos are still created for print media. Iwan Baan rented a helicopter to capture the stunning image that graced the cover of New York magazine’s post-storm issue. No one goes to those kinds of lengths, or expense, to produce a photo that will only appear in digital media. 
2. Print works just fine when the power is out. 
3. Print’s battery doesn’t die. 
4. If you own a printed product, you don’t need a wifi connection to access it. 
5. This came from a New York reader: "When I awoke to what looked like a war zone Tuesday [Oct. 30], I thought I was completely cut off from the outside world – no power, no Internet, no phone, no battery-operated or hand-cranked radio (since rectified). But when I ventured outside my apartment building, I spotted a newspaper box with an amazing sight: that day’s edition of the New York Daily News. It had obviously ‘gone to bed’ too early the previous evening to have all the news of the storm, but I eagerly dug in. At that moment print was clearly the superior technology for conveying news."
6. A New Jersey resident wrote: "We didn’t get enough rain Monday night [Oct. 29] to cause any flooding, but by the next morning most major roads were blocked by downed power lines and utility poles and practically the whole town had no electricity. The whole region was such a mess that the local daily newspaper didn’t even try to publish that day. Our street was eerily quiet most of the morning until we heard the familiar whirr of a motor. There was our letter carrier coming up the street, delivering mail as if nothing had happened. It was days before UPS and FedEx got their deliveries to our area straightened out, and my neighbor was still complaining a week after the storm about not being able to access the books and magazines she had bought for her e-reader (‘How’s that Kindle workin’ for ya now, sweetheart?’). We received several magazines by mail after the storm and never missed a mail delivery during the week the power was out. 
7. And another Jerseyan: “Our Republican governor pointed out that we seem to be getting a 'Storm of the Century' every couple of years. NOW do you believe in global warming?” Yep, the storm should be a wake-up call that it's time to move beyond simplistic slogans like “Go green, go paperless” and “Paper is all natural” and dig in to the serious work of making our media choices more earth friendly. 

Related articles:

• Print vs Digital: Who Survives The Zombies: A really fun infographic 
• Going Paperless Doesn't Mean Going Green, The New York Times Proves  
• 10 Questions About Toshiba's No-Print Day  
• 12 Telltale Signs That You Are A Printing Geek

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FSS Is Saving Big Bucks, USPS Claims

The troubled Flats Sequencing System is saving hundreds of millions of dollars annually, according to a U.S. Postal Service claim.

Based on information USPS filed recently in a lawsuit, the agency’s $1.3 billion FSS investment will pay for itself after barely three full years of operation.

“The Postal Service saves approximately $325,408 for each month of operation of each FSS machine,” USPS said in response to a lawsuit filed against it by the key FSS vendor, Northrop Grumman. “This is the monthly amount the Postal Service would have to pay employees to manually sort flats to delivery point sequence if the Postal Service did not use the FSS machine, minus the additional cost of operating the FSS machine.”

FSS was supposed to revolutionize the sorting of difficult-to-handle flat pieces like catalogs, magazines, and large envelopes. Mailers hoped the efficiency gains from automating mail sortation that was done by letter carriers would reduce pressure on the Postal Service to increase postal rates for flat mail, but now they fear that FSS isn't paying off. (See FSS Is Increasing USPS's Costs, Expert Says and FSS Machines Running Far Slower Than Planned.)

Because the 100 FSS machines were deployed an average of 12 months later than required by contract, USPS claims Northrop Grumman owes it $393.7 million for lost savings. USPS is seeking an additional $17 million from Northrop for other alleged breaches of contract, such as a lack of spare parts, error-plagued maintenance handbooks, and failure to honor warranty claims.

The USPS filing also denies Northrop Grumman claims that USPS “improperly wrested design control” over the machines from Northrop and thereby caused the delayed implementation and other problems. (For more on Northrop’s claims, see Flats Litigation System: USPS and Vendor Battling It Out Over Huge FSS Machines.)

High rate of return
If the Postal Service’s numbers are accurate, the money it invested in the football-field-sized machines will have a hefty 27% “internal rate of return” if the machines last for only 10 years.

But extensive cost estimates like this rely on assumptions and judgment calls. Because the context of the lawsuit gives USPS the incentive to make the FSS savings seem as large as possible, its estimate begs a few questions:

• Does the net savings of $325,000 per month represent a best-case scenario -- for example, a machine that runs well with no major hiccups -- or is it truly an average for all machines in all months?
• Postal officials stated recently that only 60% of flat mail in FSS zones was being sorted on FSS machines. Is the $325,000 estimate based only on the best-utilized machines or also on the machines that are underperforming their intended capacity?
• As Dead Tree Edition reported in September, FSS machines’ “erratic performance sometimes results in carriers spending just as much time preparing the mail, or even more” and last winter “led to many carriers delivering mail after dark – definitely not a high-productivity environment.” Do the USPS savings estimates include the cost of such downstream disruptions?
• Mailers, especially magazine publishers, report many customer complaints about the “Flats Shredding System” damaging mail. Is the Postal Service factoring in the lost revenue from those customers not renewing or switching to digital media? (If your answer is “Yes”, contact me about a really sweet deal on a bridge I can sell you.)
• Postal officials have recently reported improved FSS operations, especially in regard to machine reliability. Does that mean the monthly savings per machine will be even greater than $325,000?
• Now that the Postal Service has had such a major falling out with the contractor it relied on for such key functions as documentation, training, and modifications, how long will it be able to operate the massive machines effectively on its own? 

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Celebrating Yes Print Day!

In celebration of Yes Print Day!, which was originally called National No-Print Day, we offer a collection of Dead Tree Edition articles about the print medium. Here's information about what makes print special, how printing stacks up environmentally against electronic communications, and how to make print greener:

• 10 Questions About Toshiba's No-Print Day  
• Going Paperless Doesn't Mean Going Green, The New York Times Proves   
• Printed Magazines or Digital Magazines: Do We Have To Choose?  
• 34 Tricks Print Mags Can Do That Apps Can’t
• Smackdown: Printed Editions vs. Digital Editions  
• Google Using Blatant Greenwash To Promote New Catalog App 
• Newspapers Are Greener Than Web News, Says Environmental Expert
• Cutting some trees but saving the forest   
• Three, or Maybe Four, Green Magazine Pioneers
• Green Publishing Quiz

And, finally, for some print-related fun: Phone-Sex Service Gets Boost from Lands' End, International Paper. As of earlier today, eHow and Green City Times were among the web sites still touting (800) 879-9777 as the number to call for information about how to recycle cardboard.

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Without Vision Systems, the Printers Perish

In honor of Oct. 23, which was originally scheduled to be National No-Print Day but turned into Yes Print Day!, Dead Tree Edition offers this update on printing-related technology and what it means for print buyers. (If you’re not familiar with Toshiba’s ill-fated National No-Print Day gimmick, see Toshiba's No-Print Day As Popular As a Turd in the Punchbowl):

Recent developments in postpress technology underscore the importance of looking beyond price when choosing a printer. After all, when an organization buys printing, it isn't just paying to put ink on paper; it's paying to have the right message delivered to the right person on time.

The recent Graph Expo 2012 printing-industry trade show included an impressive array of machine-vision systems on binders, stitchers, and other finishing equipment, reports Don Piontek for Printing Impressions. In the bindery, “vision systems have become more common over the years ... to verify that the correct signature has been loaded into the feeder by the operator,” he notes.

“On co-mailing machines, cameras will verify that the correct mailing address has been applied to the right publication for that recipient.”

To understand the significance of these advances in cameras, processors, and software, let me relate a couple of war stories:

You're screwed
I worked at a publishing company where an advertiser asked about including a personalized insert in magazine copies going to certain VIP subscribers. So I checked with our printer’s customer service rep whether the printer could ensure that, for example, the insert targeted to Dr. Emily Williams went into the copy addressed to Dr. Emily Williams.

“Sure,” said the CSR. “We just print the inserts so that they are delivered to the bindery in the same sequence as the address file.”

“What happens if someone in the bindery drops a stack of inserts or picks up a bundle out of sequence?” I asked.

“Then you’re screwed,” came the reply.

Digital fail 
Another printer tried to show off its new digital-printing capabilities but ended up demonstrating how badly it needed to invest in machine vision. The printer sent a fancy mailing to its clients with lots of personalized messages.

Unfortunately, the brochure I received began with “Dear Alice.” The pre-personalized pieces fell out of synch with the address file, resulting in many other clients getting a similarly mis-addressed message.

Cameras mounted on production equipment, calipers that check each piece’s thickness, and other automated inspection systems can ensure that the correct piece is bound into each publication or inserted into each envelope. But the level of investment in such quality control varies from printer to printer.

If you selectively (AKA demographically) bind your publication at a printing plant that skimps on postpress quality-control systems, that expensive perfume insert targeted to young women may end up going only to your male customers.

A direct-mail printer may keep its capital-investment costs -- and its prices -- low by not buying vision systems. But will unseen errors at the plant depress your response rates?

Is printing a commodity? 
Printing is not purely a commodity, especially when “printing” includes such other activities as binding, presort, co-mail, packaging, and shipping. Low printing prices can’t save enough to cover the costs of losing a major customer, significantly depressed response rates, or even mailing the printed piece inefficiently.

A print buyer’s goal should not be to get the lowest price but to figure out how to meet a set of specifications most efficiently.

Final thought: Even the best printing plant can’t overcome a flawed database. To promote a printing trade show, beautiful four-color postcards of a sports car were mailed to print enthusiasts, with the recipient’s name “painted” on the sports car. Unfortunately, my name appeared in the mailer’s database as “Mr. Publishing Company”.

Final note: The headline is a play on the Hebrew proverb, “Where there is no vision, the people perish” (Proverbs 29:18), which an urban legend says was translated into one language as, “Put on your glasses before you get killed.”

Other articles about printing and print buying include:

• The Changing World of Print Buyers: An Interview with Margie Dana  
• 12 Telltale Signs That You Are A Printing Geek  
• Here's Why We Avoid Four-Color Body Type  
• The 10 Most Common Paper-Purchasing Mistakes

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8 Questions About Newsweek's Future

Google News indicates that more than 1,000 articles were published Thursday about Newsweek magazine abandoning print but continuing as the digital Newsweek Global. Still, many questions remain unanswered, including: 

Recent Newsweek cover -- and a parody

1. Will some of the millions of dollars no longer being forked over to the U.S. Postal Service, paper mills, and printers be reinvested in more and better content? 
2. Will Newsweek Global’s covers still inspire hilarious parodies? Or will lack of visibility at airports, grocery stores, and dentists’ offices mean its covers will no longer matter, regardless how hard Tina Brown tries?
3. What will happen to current subscribers who don’t have internet or computer access or just don’t want a digital publication? Will they get their money back? 
4. How will advertisers respond to Newsweek Global and its lack of ratebase (guaranteed minimum circulation)? 
5. What does this mean for TIME magazine? Will it benefit from its archrival’s loss of visibility, or will it get sucked down the same toilet? 
6. Will Newsweek Global be only a digital magazine – for example, with numbered pages and a regular publication schedule? Or will some subscribers view its content on an unpaginated, paywall-protected web site that is continuously updated? 
7. Is Newsweek truly abandoning print, or will it become a zombie on newsstands like Life and U.S. News & World Report, living on in “bookazines” (special issues)? 
8. Will Newsweek Global survive? 

Added thought: It turns out the Mayans weren't quite right: 2012 isn't the end of Time, it's the end of Newsweek.

Related articles:

• Newsweek Takes a Stand: Profits Are for Wimps
• What Exactly Did Barry Diller Say About Newsweek's Future?  
• Tina Brown Follows Husband's Footsteps -- Sort Of

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Confusion, Misinformation Could Hinder USPS's Early-Retirement Push

Confusion reigns among the 115,000 postal workers who received notices in the past few days about a buyout offer. The confusion could limit the number of APWU-represented career employees who accept the U.S. Postal Service’s $15,000 incentive to retire or quit.

”The Postal Service's voluntary early retirement annuity estimates are as bad as before,” says Don Cheney, a long-time critic of the U.S. Postal Service’s communications with its employees regarding retirement benefits.

As usual, the errors tend to understate what employees’ benefits will be upon retirement, says Cheney, an APWU member who for the last nine years has been advising postal workers and writing about errors in retirement estimates the U.S. Postal Service provides its employees.

(See How Does the Postal Service Discourage Early Retirement? Let Me Count the Ways, Why Does USPS Make Retiring Difficult When It Has So Many Excess Employees?, and The Postal Service's Early-Retirement Snafu for more on how the Postal Service’s poor communications have undercut its previous efforts to downsize by offering early-retirement incentives.)

“I am receiving numerous inquiries about the retirement incentive,” former APWU president Bill Burrus wrote a few days ago. He urged the union’s current leadership to designate a knowledgeable officer or staff member to help members who have questions about the early-out incentive.

“This is an important time in their lives and they are in need of timely answers to their questions,” Burrus wrote. And they won’t get those answers from the Postal Service. As Cheney notes, USPS offers no retirement counseling to employees taking early retirement until after the decision to retire is irrevocable, which postal unions claim is contrary to federal regulations (not to mention common sense).

Referring to a recent estimate one employee received, Cheney says, “This 51-year-old individual in the FERS retirement system was not told whether they are eligible for the SS [Social Security] annuity supplement, how much it would be or when it would start.”  He adds, “If VERA [Voluntary Early Retirement] eligibles in FERS knew they would get about $800/month more in their FERS annuities at Minimum Retirement Age (MRA), more would take it,” he adds.

"There is still the misconception among FERS employees of an age penalty in a Voluntary Early Retirement,” Cheney says. “The opposite is true in most cases.”

Also tending to discourage early retirements is the mistaken belief that the IRS charges a 10% early-withdrawal penalty for money taken out of a Thrift Savings Plan by early retirees, he says.

 “Congress made an exception for federal and postal employees that retire or separate at age 55 or later. For them, there is no 10% IRS early withdrawal penalty,” Cheney says. “Younger retirees can avoid the IRS penalty by withdrawing their money as an annuity.”

Slow processing of retirees’ paperwork and payments has also tended to discourage early retirements, but this time around at least some postal workers may benefit from the backlogs at the Office of Personnel Management (OPM). The 21st Century Postal Worker, a web site serving APWU members, passes along this message:

“For all that put their retirement paperwork in prior to the [incentive] announcement, call OPM ASAP and ask if your paperwork has been processed. If it has not been processed (there is a 6-8 week wait), the effective date of retirement can be changed to reflect the incentive memo. Do NOT DELAY! Do not hang up until you actually reach a representative from OPM. Do NOT leave a call back. Stay on the phone until you make sure the paperwork is reprocessed and you fax in a copy to change the date of retirement.”

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Chances of Postal Reform This Year: Slim and None

The chances for meaningful postal reform this year are slim if neither political party gets a mandate from Congressional elections – and none if one party wins control of both houses.

That’s the consensus of several postal experts who have spoken or written recently about the status of postal legislation.

“If the Republicans get a majority in the Senate and hold their majority in the House, nothing will happen until 2013,” Jim O’Brien, Vice President, Distribution & Postal Affairs for Time Inc., told a mailers' focus group meeting last week. “If the Democrats hold the Senate majority and the Republicans hold the House, MAYBE something could happen in the lame duck session. If the Dems win the House and Senate, nothing will happen until 2013.”

During the post-election lame-duck session, the House is likely to approve postal legislation “that moves closer to the Senate version,” Ken Garner and Benjamin Cooper predicted a few days ago at the huge GraphExpo trade show for the printing industry. (If you’re wondering why postal issues are being discussed at a printing event, Garner, President/CEO, Mailing & Fulfillment Service Association, and Cooper, a prominent postal lobbyist, offered this factoid,: “Over one half of all print [in the U.S.] is created for mail distribution.”)

Rep. Darrell Issa, R-CA, has indicated he will introduce a “lite” version of the postal bill he guided through his committee early this year. Some have likened the original Issa plan to a Chapter 11-style restructuring of the U.S. Postal Service.

Gene Del Polito, President of the Association for Postal Commerce, agrees with Garner and Cooper that Issa’s revised proposal is likely to include some kind of relief on prepayment of retiree health benefits, as well as elimination of Saturday delivery. But “heaven only knows” whether the House and Senate will agree to any postal legislation this year.

“And if your business really depends on the provision of cost-efficient and reliable postal services, you'd better let heaven know what you need. Maybe somebody there will be listening.”

“The odds point to a 2013 bill,” O’Brien said. “Remember, Congress will not act in the absence of a crisis. The crisis SHOULD arrive in the fall of 2013 when the USPS runs out of cash.”

Garner and Cooper agree, and they fear that such a cash crisis would erode customers’ confidence in the Postal Service. It will be no easier for Congress to pass a long-term solution in 2013 than it is in 2012, they said. And no one seems to be betting that Congress will come up with a real solution next year.

“I believe if a postal bill is enacted that fails to address the imbalance between postal costs and revenues, the bill may provide a respite for some of the Postal Service's woes but there won't be a cure,” Del Polito wrote. “Within two years after enactment, there will be a postal reform redux. We'll get the same unsatisfying outcome we've gotten from the 2006 act.”

Related articles:

• 7 More Reasons the GOP Might Be Starving USPS of Cash   
• Is the Postal Service Really Broke?  
• USPS' 'Safeguards' Have Been Running Amok For 3 Decades

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Take the Money and Run, Burrus Tells Postal Workers

The U.S. Postal Service's proposal to downsize its workforce with an employee buyout received support Saturday from a long-time adversary.

William Burrus, former president of the agency's largest labor union and long a vocal critic of USPS management, urged fellow APWU members not to hold out for a better offer than the $15,000 incentive announced this week.

"If you intend to retire my advice is to 'take the money and run,' there is zero possibility that the amount will be increased," Burrus wrote in his blog today. "And for those who hope that a similar offer will be made in the future, I suggest that the odds are heavily against another incentive any time soon."

For the Postal Service, the time has never been better to offer clerks, mechanics, drivers and other APWU-represented employees an early-out bonus, the retired labor leader wrote, because "consolidations and service standard changes will make it possible to process a changing mix of mail with fewer employees."

And even if some retirees have to be replaced by new hires, he said, "postal costs are reduced by 50% when a retiree with 35 years of service is replaced by a new employee." Such a wide pay gap between new and veteran employees will not occur again, Burrus added, which means USPS will never have more incentive to downsize than it does today.

How about 35,000?
Postal officials expect 15,000 to 20,000 APWU-represented employees to take the buyout. Not Burrus:

"My best estimate is that of the 115,000 APWU represented eligibles there will be somewhere in the range of 35,000 who will take the money and run. If I am in the ball park, this will be the last and final retirement incentive in the next 50 years."

That may be a self-fulfilling prophecy. Knowing that Burrus is wily in the ways of Washington and not averse to speaking out against USPS management or current APWU leadership, many eligible employees may be swayed by his words.

Related articles: 

• Burrus Responds: Not Giving Up on 6-Day Delivery   
• The Reinterpretation of William Burrus  
• Mathematically Challenged: Burrus Proposal Doesn’t Add Up for USPS

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Five-Day Delivery and Reduced USPS Service Standards Could Face Legal Barrier

The U.S. Postal Service’s plans to eliminate Saturday delivery and to lower its delivery standards could face a significant legal obstacle, according to the Postal Regulatory Commission.

In its advisory opinion last week on USPS’s plan to close nearly half of its mail-processing centers, the commission seemed to side with witnesses who said reducing service standards could run afoul of the Congressionally-imposed price cap on postal rates.

“Two expert witnesses . . . presented persuasive testimony that a relationship exists between price and quality, and that lowering quality is equivalent to raising the price,” wrote Chairman Ruth Goldway in an addendum to the PRC’s document.

Under USPS’s Network Rationalization plan, “Eighty percent of all First-Class Mail . . . will be delayed by at least one day,” Goldway wrote. “Much of 2-day mail will become 3-day mail. Rural and remote communities that already receive slower delivery may be impacted even further when weekend and holiday delays are factored in.”

“If the Postal Service eliminates Saturday delivery, actual days to delivery would increase even more,” Goldway added. Her comment suggests that eliminating Saturday delivery would require Congress to change the price-cap law rather than merely excluding the usual ban on five-day delivery from annual appropriations bills.

Service standards and the price cap are two sides of the same coin. In the words of the PRC, “the price cap sets the ceiling on prices, whereas service standards set a floor on quality of service.”

“The Postal Service addresses the price/quality issue by contending that mailers place little value on speed of delivery,” the PRC wrote. [Tell that to publishers who send daily newspapers through the mail.] “The Postal Service asserts that customers value reliability in terms of predictability and consistency of delivery, and other attributes such as ease of use, convenience, and affordability.” But the commission didn’t seem to buy that argument.

The advisory opinion makes no definitive statement on the legal implications of reducing service because, as Goldway stated, the law governing USPS’s rates “does not provide the Commission explicit guidance to link the price cap directly to service quality.” But the PRC seems inclined to explore the issue further. 

Related articles:

• Has USPS Targeted the Wrong Plants for Closure?  
• How USPS Could Bypass Congress on Saturday Delivery 
• Divided PRC Presents Its Opinion on Saturday Delivery

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Has USPS Targeted the Wrong Plants for Closure?

The U.S. Postal Service's plan to reduce its mail-processing network by half has a major flaw, according to a Postal Regulatory Commission opinion released Friday: The plan would tend "to move processing assignments from more productive plants to less productive plants."

USPS goofed in assuming that consolidating mail sorting into larger plants would improve productivity, according to the PRC's advisory opinion on the Postal Service's ambitious Network Rationalization plan. In fact, larger plants historically have tended to process fewer mail pieces per workhour than smaller ones, the PRC's analysis finds. (Five-Day Delivery and Reduced USPS Service Standards Could Face Legal Barrier explores another issue addressed in the lengthy advisory opinion.)

"Shifting volume from less productive to more productive plants, without changing operating windows or service standards, would increase productivity by 18 percent, and save $1.3 billion in direct mail processing costs," the ruling says.

That's more than the $968 million USPS projects that its plan will save in mail-processing costs, and the PRC believes that projection is overly optimistic because of questionable assumptions.

In theory, large plants have the advantage of more automation, such as the football-field-sized Flats Sequencing System machines. But FSS has been mostly a disappointment so far (and may actually decrease productivity in mail sortation). The PRC finds that large plants are inherently less efficient because of the greater distances involved in moving mail from one stage to another.

How much idle time?
A key point of disagreement is USPS's claim that 27% "of workhours within automated, mechanized, and manual processing are spent waiting for the mail." The PRC says the number is only 1% to 4%. The Postal Service envisions consolidation leading to huge productivity gains by eliminating such idle time, but the commission questions whether the surviving plants will really be able to work the mail far more efficiently than they do today.

"To simply restore mail processing costs to FY 2010 levels, the set of plants surviving after reconfiguration will have to increase their productivity by an average of 8.4 percent above the productivities that they achieved in FY 2010," the ruling says. "Further, the Postal Service will have to increase the average productivity of all plants in the network by 20.4 percent to achieve the level of savings that it expects."

USPS projects its plan will save a total of $2.1 billion annually, with much of the savings coming from transportation and from reduced delivery standards -- that is, longer lead times for delivering mail.The PRC agrees that network consolidation makes sense, but it thinks USPS's savings estimate is too high and that it may be underestimating the revenue that will be lost if service standards are lowered.

Concluded PRC chairman Ruth Goldway, "I strongly believe that the information the Commission has developed is so persuasive that once it is carefully studied by the Postal Service and the mailing community, the Postal Service will utilize it, implementing a rationalization plan that saves costs while preserving service."

Related articles:

• Redrawing the Map: A Look at USPS' Network Rationalization Plan By the way, I had no idea when I published this that the PRC decision would be coming out less than 24 hours later. 
• Postal Watchdogs Trying to Unleash USPS Innovation  
• Postal Service Has Too Many Employees and Pays Them Too Much, Mailer Groups Say

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Redrawing the Map: A Look at USPS' Network Rationalization Plan

The U.S. Postal Service has been consolidating its mail-processing operations for several years, but it wasn't until I saw a recent postal official's presentation that I realized even more dramatic changes may be ahead.

The USPS's Network Rationalization Plan, opposed by some postal unions and not-in-my-district Congress members, would cut the number of processing centers nearly in half by 2015 -- from 461 this year to 232 in 2015. That's down from 673 in  2006 and 599 in 2009. (See also Has USPS Targeted the Wrong Plants for Closure?.) 

As the maps below show, the impact would be especially dramatic in certain regions. Several states -- including Mississippi, Kansas, and Arizona -- would go from having six or more facilities to only one.

 

Note the plan's radical effect on states in and near the northern Rocky Mountains. Some of the centers targeted for closure are more than 300 miles from the nearest surviving facility, leaving some postal workers no way to continue working for the USPS without relocating.

Northern Rockies: Currently

Northern Rockies: "After"

It's not just sparsely populated areas that would lose most of their processing centers. Note the plan's impact on Ohio and southwestern Pennsylvania. And West Virginia, which had 11 centers barely two years ago, would be left with only Charleston.

Ohio Valley: "After"

Ohio Valley: Currently

Declining mail volume, increased automation, and revised service standards have meant the Postal Services needs fewer locations that can sort mail. The use of Flats Sequencing System (FSS) machines has tended to cause even more consolidation of processing into huge distribution centers, some of which have 2,000 employees (versus as few as 50 in the kinds of small centers that are typically targeted for closure).

Related articles: 

• USPS 'Honors' Sen. Byrd With Plant Consolidations
• Death of the SCF, Part 3: Flats Sequencing
• USPS Steps Up Mail-Processing Consolidation

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Going Paperless Doesn't Mean Going Green, The New York Times Proves

Perhaps we can finally say goodbye to those simplistic "Go green, go paperless" promotional campaigns.

There's nothing particularly green about the massive data centers that store the internet's data, The New York Times revealed this past weekend after in-depth investigation. Data centers waste electricity and spew pollutants in a way that "is sharply at odds with its [the information industry's] image of sleek efficiency and environmental friendliness," the lengthy but clearly written "Power, Pollution, and the Internet" says.

"The industry has long argued that computerizing business transactions and everyday tasks like banking and reading library books has the net effect of saving energy and resources." But data centers use more electricity than the paper industry, according to the The Times.

Among other highlights of the article:

• "Most data centers, by design, consume vast amounts of energy in an incongruously wasteful manner, interviews and documents show. Online companies typically run their facilities at maximum capacity around the clock, whatever the demand."
• "The pollution from data centers has increasingly been cited by the authorities for violating clean air regulations, documents show. In Silicon Valley, many data centers appear on the state government’s Toxic Air Contaminant Inventory, a roster of the area’s top stationary diesel polluters."
• Data centers use "only 6 percent to 12 percent of the electricity powering their servers to perform computations. The rest was essentially used to keep servers idling and ready in case of a surge in activity that could slow or crash their operations."
• Most of the data are created by consumers. "With no sense that data is physical or that storing it uses up space and energy, those consumers have developed the habit of sending huge data files back and forth, like videos and mass e-mails with photo attachments."

Related articles:  

• OK, Johnny, Now Greenwash Your Hands  
• 10 Questions About Toshiba's No-Print Day
• Google Using Blatant Greenwash To Promote New Catalog App  
• Newspapers Are Greener Than Web News, Says Environmental Expert 
• Smackdown: Printed Editions vs. Digital Editions  
• Environmental Impact of Paper Goes Way Beyond Cutting Trees

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