The Recycled Debate: Can We 'Get Beyond the Stereotypical Industry-Environmental Relationship'?

My recent article about discussions between National Geographic and an environmental group has stirred up a debate about recycled paper between two industry leaders.

Publishing pundit BoSacks (AKA Robert Sacks) distributed the article to his 12,000-plus email list on Tuesday with one of his famous "BoSacks Speaks Out" rants, charging that, "Forcing recycled paper into the virgin fiber process of paper making is in most cases counter-productive to a successful green footprint." (He left a similar but briefer comment Sunday on Dead Tree Edition.)

Frank Locantore, director of Green America's Better Paper Project, responded today on Dead Tree Edition with a plea for "a constructive dialogue that has a goal of reaching agreement on metrics to determine what constitutes environmentally preferable paper." Locantore has been perhaps the leading advocate and promoter of using paper with recycled content in North American magazines.

I have corresponded with both men over the past few years and believe them to be people of good will who are worth heeding. (In fact, both submitted insightful comments on one of my first environmentally themed articles, I'm an environmental idiot!.) Therefore, in the interest of encouraging meaningful debate and dialog, I'm publishing both statements in their entirety:

BoSacks Speaks Out
Here's what Bo told his newsletter readers:
There is a debate that is going on in our industry about sustainability that seems like it is mostly for the undereducated and terribly misinformed. If you really understand "green", which most of us don't, it is terribly wrong for the green wanna be's to insist that recycled paper be forced into all virgin pulp for a proper carbon footprint. It is actually in most cases counter-productive for sensible sustainability. The true resolution of this problem, which is admittedly hard to sell, is because of the misinformation and noble knee jerk reactions of the " I wanna do some good, so I want recycled paper in everything crowd."

WRONG! Forcing recycled paper into the virgin fiber process of paper making is in most cases counter-productive to a successful green footprint. It takes more carbon energy to introduce into the substrate what is not necessary or efficient to be there. I am very much for recycling and real sustainability, but I am not an advocate of idiotic programs for the sake of the uneducated who insist the something must be done regardless of the true science. There are great and wonderful uses of recycled paper, some of which is in printed products and each day science is creating more creative uses for the renewable product. If we are worried about a carbon footprint, we shouldn't be using more energy instead of less just so we can put a label on something, which gives the false impression of helping the planet.

The amount of paper in the landfills or out of the landfills is a completely different question. The biggest reason landfills have paper isn't because mills won't use it. The real reason is because people and some businesses are lazy and don't intend to be part of the solution; they are actually part of the problem.

The answer to all this is education, legislation and common sense. We all know that common sense isn't that common, so that leaves us with education and legislation. I have little faith that either is going to happen any time soon, so we will be left with completely wrong headed groups demanding that we need recycled paper in every magazine, when it just isn't true. That logic is a public relations move that confuses or misleads the public about the realities and truth of what a green business and a green publishing house is all about.

Locantore's Response
Here is today's comment from Locantore on the article Green Groups Turn the Heat Down on National Geographic But Up on KFC:
After re-reading Bob Sacks response above, I think that there are at least two points on which we agree. We are both: a) Frustrated with the current dialogue about what constitutes environmentally preferable paper, and b) Concerned by the dominance of PR and greenwashing rather than science in environmental paper decisions.

Really, this is not a bad starting point for a potentially meaningful discussion (once I look past the name-calling).

The past is full of confrontational approaches to force one another's hand on issues. Who among those of you reading this will step forward to help steer a constructive dialogue that has a goal of reaching agreement on metrics to determine what constitutes environmentally preferable paper? Anyone? Buehler?

The Environmental Paper Network (EPN) worked with some of its members to create a fact sheet that articulates why many of us believe – a belief based upon science – that recycled content in all grades of paper reduces energy, water, chemical use, pollution, and solid waste. Contact me if you’d like a copy of the fact sheet and I’ll email it to you (frank@greenamerica.org).

I really hope that we can get beyond the stereotypical industry-environmental relationship. Don’t you?

In cooperation,
-Frank Locantore

Other Dead Tree Edition articles about sustainable paper and publishing choices include:

•  Green Publishing Quiz  
• Three, or Maybe Four, Green Magazine Pioneers
• Condoms to the Rescue, and 5 Other Novel Ideas for Saving the Forests 
• What Exactly Is Environmentally Preferable Paper?

Read More

Green Groups Turn the Heat Down on National Geographic But Up on KFC

Please see also the May 30, 2012 follow up to this article, The Recycled Debate: Can We 'Get Beyond the Stereotypical Industry-Environmental Relationship'?, where Locantore and industry pundit BoSacks debate the green-ness of recycled paper.

The environmental group that aimed a "Practice What You Print" campaign against National Geographic for not using recycled paper says it is now engaged in "productive discussions" with the magazine.

Frank Locantore, director of the Better Paper Project, revealed the discussions in a comment today on Dead Tree Edition's article, What Exactly Is Environmentally Preferable Paper? Acknowledging that there is more to "green" paper than recycled content, he called for "a broad cross-section of stakeholders" to establish measurements that will lead to making paper more environmentally friendly.

Here is Frank's comment in its entirety:

I've wanted to post a comment to this blog for a long time now. But, there is so much here to comment on that it has been hard to figure out where to begin. First, I want to thank DTE for repeatedly trying to get a conversation going about this. My hope is that the conversation finds a different venue than on-line commenting. It is really difficult to substantially and meaningfully discuss this issue without the benefit of being in the same room with one another.

My three comments are these:

1. As the Director for the Green America Better Paper Project, I'd like to clarify - we are NOT protesting National Geographic. We are actually in some productive discussions with them and hope to be able to report out on the results in 2012.

2. I don't understand the claim that paper is not going to landfills when over 25% of landfills consist of paper, in fact, that is the largest single component of landfills. One could argue that the increasing demand for recycled paper has made paper's percentage of landfill waste decrease in the past decade. Something we should all be proud of.

3. I agree that there is no simple answer to the question of what paper is "greenest." However, I don't think that it is an impossible question to answer. Can we not work collaboratively as industry, NGOs, govt's, and the public to create a list of metrics that can help determine the environmental "health" of paper? My doctor checks my cholesterol, blood pressure, weight, etc. to give me an analysis of how healthy I am. Can't we do something similar for paper?

Is there any appetite to convene a broad cross-section of stakeholders to discuss and determine metrics that will continuously improve the environmental characteristics of paper? I hope so.

Just two days ago, Greenpeace activists hung a huge banner showing a Sumatran tiger and the message "KFC: Stop Trashing My Home" on the fast-food chain's corporate headquarters.

Dogwood Alliance was already using its Kentucky Fried Forests campaign to criticize KFC's use of International Paper food-packaging products that allegedly result from IP''s destruction of Southern U.S. forests.

Now Greenpeace is upping the ante, claiming "The Colonel's been keeping his chicken fresh with packaging made from rainforests" because KFC also buys products from Asia Pulp and Paper, which has been widely criticized for destroying Indonesian rainforests.

Both NGOs are having fun with riffs on KFC's fast-food packaging. Dogwood Alliance has created a mock Kentucky Fried Forests chicken bucket depicting a chainsaw-wielding Colonel Sanders. The bucket is shown on "Get Forest Destruction For Free!" coupons that activists have handed out at KFC locations.

Greenpeacethis week released a series of videos showing animated KFC food packages revolting against the company's paper-purchasing practices. In one, the Colonel drawls, "So what if I make a few tigers homeless."

Read More

Is the Postal Service Really Broke?

The U.S. Postal Service would be in Chapter 11 if it were a business, the Postmaster General points out, but others claim he and some political conservatives are manufacturing a crisis.

There has been much debate and confusion regarding USPS’s financial status. It helps to break the issue down into three questions:

Question #1: Is the Postal Service broke?

This is a debatable point, though the Postal Service’s financial reports show that it is indeed broke and about to exhaust its ability to borrow.

Those who say USPS’s finances are OK point out correctly that it has prepaid billions of dollars to the federal government to cover future retirees’ health benefits and overpaid billions more into a joint federal/USPS pension fund. A Congressional accounting game designed to mask the size of the government’s budget deficit basically has the Postal Service borrowing billions of dollars each year so that it can turn around and lend billions back to the government in the form of prepaying into the retiree-benefits fund.

Business-style accounting would treat that $21 billion loan to the federal government as an asset, giving USPS about $2 billion in net capital at the end of Fiscal Year 2011 rather than the -$19 billion net value it reported.

Then again, a real business would never allow so much money to be loaned at no interest to a debtor that has the power to change or cancel the repayment terms unilaterally. Nor would it have allowed billions in overpayments to the pension fund over the course of many years.

So the answer to Question #1 is basically that yes, the Postal Service is broke but also that it has a moral, if not legal, claim on enough funds to wipe out its deficit.

Question #2: Is the Postal Service losing money?

Yes, but again the situation is not as clear as the financial statements would indicate.

In the past five years, USPS deficits totaled $25 billion, but $21 billion of that was from the prepaid retiree health costs – a burden that no other public or private employer faces. That, coupled with the pension overpayments, has led postal unions to claim that the Postal Service is in fact not a money loser but rather is being bled dry by the federal government.

It’s true that, if not for the prepaid retiree benefits, USPS would have been profitable in 2007, 2008, and 2009. The past two years, however, would have been unprofitable even without that burden.

Fiscal years 2010 and 2011 would have been in the black if both the prepayments had been eliminated and the pension overpayments had been returned. But using a one-time windfall (return of the overpaid pension funds) to balance budgets isn’t sustainable in the long run.

That leads us to the third question:

Question #3: Is the Postal Service going broke?

Let’s put it another way: If Congress corrected the shenanigans involving retiree benefits and pension funding and no other significant changes were made, would the Postal Service still be headed for insolvency?

Yes.

Mail volumes, especially of highly profitable First Class Mail, seem almost certain to continue their long-term decline. Unless something changes, revenue will keep decreasing more rapidly than costs.

You can debate the numbers and projections, but sooner or later tough choices have to be made about the Postal Service’s cost structure. That doesn’t mean we have to accept Rep. Darrell Issa’s plan to put USPS through a sort of Chapter 11 restructuring that would cancel its union contracts and set up more regulatory oversight.

You don’t have to be a Tea Partier to acknowledge that the Postal Service has more distribution centers, more post offices, more employees, and more supervisors supervising supervisors than it needs.

And acknowledging those facts doesn’t mean negating the obligation to treat USPS employees decently and fairly. (After all, judging from what I hear and read, many postal workers already get plenty of abuse at work.)

Still, we can’t hide from the truth: The patient is sick, and the cure won’t be easy. Those of us who want to maintain a viable postal service must decide: Would we rather swallow some bitter medicine today or face Dr. Issa’s amputation saw tomorrow?

Related articles:

• Why Are the Postal Service's Financial Problems Such a Surprise? Dead Tree Edition pointed out more than two years ago that Congressional inaction would lead to a financial crisis at the Postal Service. But we also incorrectly predicted Congressional proposals to let USPS run a national lottery.
• Congress Hears the Truth About Postal Service Finances The USPS Inspector General explained how "burdensome and flawed benefits payments" put the agency in a hole.
• It's Time for Liberals To Rethink USPS Downsizing Some interpreted this article to be advocating a certain position merely because the son of a man took that position. But the point is that a man with good liberal credentials and intimate knowledge of USPS's finances is pushing to shrink the agency.

Read More

Flats Litigation System: USPS and Vendor Battling It Out Over Huge FSS Machines

A multimillion-dollar dispute between the U.S. Postal Service and the long-time vendor that built its troubled Flats Sequencing System has landed in court.

Northrop Grumman claims USPS owes it $179 million for work on the $874 million contract. USPS has largely rejected the claims and responded with its own claims for $341 million "because it did not realize certain cost savings it expected from deploying the systems," Northrop Grumman said in an April financial report. The company recently told stock analysts that it had decided "to deemphasize the domestic postal automation business going forward."

The company filed suit against the federal government Friday in the U.S. Court of Federal Claims, appealing the Postal Service's rejections of its claims and asking the court to declare USPS's claims as being without merit. Northrop Grumman's entire filing can be accessed here, while Law360 has a good overview of the case.

The next generation
As Northrop Grumman's lawsuit notes, "the FSS is a massive system of machines" representing "the next generation of automatic delivery point sequencing equipment designed to reduce the processing costs of flat mail," such as magazines and large envelopes. So far, however, the 100 "Flats Shredding System" machines have not performed as planned, though they apparently have led to some decreases in operating costs.

From the time work on the contract started in 2007 through the last machine deployment in mid-2011, the complaint claims, USPS "improperly wrested design control from NGSC [Northrop Grumman Systems Corporation], ignored the performance specifications on which the firm fixed-price Production Contract had been based, persistently and pervasively imposed extra-contractual design requirements on NGSC, and otherwise interfered with NGSC's performance. Contrary to the terms of the Production Contract, the Postal Service treated the Contract as a 'build-to-suit' development enterprise."

Northrop Grumman claims the Postal Service owes it $63 million of the original $874 million in addition to what it owes for changes it requested that were not needed to meet the requirements of the contract.

Evolving and shifting demands
"When responding to the Postal Service's evolving and shifting demands, NGSC was held to and evaluated against indefinite, unpublished, extra-contractual ad hoc design standards," the lawsuit alleges.

It also claims that the USPS decision to put machines in 47 locations rather than the originally planned 32 "precluded NGSC from deploying the machines in a timely and efficient manner" and resulted in added costs for the company. USPS made that change after it realized that the declining volumes of flats mail would otherwise leave some facilities with idle sorting capacity.

One irony of the Northrop Grumman-USPS contract is a Supply Chain Management section stating, "It is the policy of the Postal Service to establish strong, mutually beneficial relations with its suppliers in order to meet its business with competitive objectives."

Related articles:

• FSS Machines Running Far Slower Than Planned 
• FSS Is Increasing USPS's Costs, Expert Says 
• 7 Reasons the Jury Is Still Out on Flats Sequencing 

Read More

It's Time for Liberals To Rethink USPS Downsizing

Thurgood Marshall Jr.

Liberal conspiracy theories about the Postmaster General’s plan to downsize the U.S. Postal Service ran head on into reality yesterday.

The plan “would return the organization to sustained profitability,” Thurgood Marshall Jr., chairman of USPS’s Board of Governors, said in a prepared statement. In contrast, legislation recently approved by the Democratic-controlled Senate would “not provide the Postal Service with the flexibility and speed that it needs to have a sustainable business model.”

Marshall reiterated his support for "the tremendous job" being done by PMG Pat Donahoe, commending him ”for his excellent work in communicating internally and externally about the changes that we are implementing, the long-term future of the Postal Service and the future of mail” and for ”keeping our eyes focused on the long-term horizon.”

Scion of a liberal icon
If you’re going to attack a plan as an anti-labor Tea Party plot, it doesn’t help to have the name “Thurgood Marshall” singing its praises. Marshall’s father is an icon of the Civil Rights Movement for creating and implementing the brilliant legal strategy that gradually dismantled Jim Crow education laws before becoming the first African-American Supreme Court justice.

Marshall Jr. has his own liberal credentials, having served under Bill Clinton, Al Gore, and Ted Kennedy.

Unlike bleeding-heart senators who can’t stand the thought of closing a single post office, Marshall has actually looked at the numbers. The math is simple: The Postal Service’s expenses are billions of dollars higher than its revenues (even if the retiree-benefits and pension accounting games are excluded). Without aggressive action, revenues will continue declining faster than expenses.

The only theoretically viable alternative to Donahoe’s plan is a Republican effort led by Rep. Darrell Issa, a truly anti-labor approach that would run USPS through a Chapter 11-like ringer.

Not included in the “viable” category are government subsidies (ain’t gonna happen), privatization (who would want to own it?), and price increases (would not add enough profit because of resulting volume decreases, which would bring about calls for even more downsizing).

And certainly not included is the Senate’s half-a-loaf plan, a seemingly left-leaning approach that would only defer the crisis and make an Issa-style restructuring more likely down the road.

Here is the full text of Marshall’s statement:

For the past several years the Board of Governors has sought legislation that would improve the Postal Service business model. We have emphasized that business-as-usual is unacceptable. The long-term financial stability of the Postal Service depends upon gaining greater flexibility to adapt to the changing realities of the modern marketplace. This can only be accomplished through legislative change coupled with aggressive actions by Postal management.

Last week the Senate passed legislation intended to reform the laws that govern the Postal Service. The Board of Governors followed those deliberations and the voting very closely.

We are keenly aware that the strong feelings that so many Americans feel about Postal issues can make the legislative process difficult. So we certainly know that the Senate leadership and the bill sponsors worked very hard to get the bill passed – and indeed we respect and appreciate their hard work.

Nevertheless, when we ask whether the legislation puts the Postal Service back on a path to financial stability, the bottom line is that the Senate bill does not provide the Postal Service with the flexibility and speed that it needs to have a sustainable business model.

Our financial condition has been deteriorating for several years, and we have been operating with a very low cash balance. Every day the Postal Service posts a loss of $25 million dollars.

We therefore strongly encourage the enactment of legislation that enables the Postal Service to avoid a default and return to long-term profitability. 

In February the Postal Service published a comprehensive five-year plan. The plan that we developed was the result of countless hours of thought and analysis, including validation by outside experts who specialize in major and highly successful corporate restructurings. That plan would return the organization to sustained profitability. We remain unanimous in our conviction that this comprehensive five-year plan is a fair and reasonable approach for our customers, our employees and the communities that we serve.

The plan would better position the Postal Service to pursue vital and promising revenue opportunities and also achieve a cost reduction of $22.5 billion by the year 2016.  Achieving this goal is critical because it would keep our costs below our projected revenues for the remainder of the decade. The Senate bill includes many hard-fought improvements but it does not enable all of the cost reductions that are necessary to return to profitability.

Within the framework of our comprehensive plan and in consultation with members of the House and the Senate, we have continued to refine our approach with regard to rural Post Offices. We have done so as a result of listening carefully to the views of our customers and the communities we serve.

In the coming weeks, the Postal Service will provide detailed plans describing the steps that it intends to take regarding rural Post Offices. We are committed to pursuing cost reduction strategies in a thoughtful way, and we believe these announcements will lay to rest many of the concerns about our path going forward.

The Board of Governors is committed to serving rural America and to preserving the role of the Postal Service in every American community.  

We are also committed to strengthening the value of the products and services that we provide now and well into the future, continually making it easier for businesses to work with the Postal Service, and to invest in our future.

Contrary to some of the words being used to describe our intended path forward, we are going to approach our network realignment in a fair, measured and methodical way. 

In closing, I would like to take one moment to express the appreciation of the Board of Governors for the tremendous job that our Postmaster General and Deputy Postmaster General have done, particularly over this past year.  

The issues we have dealt with are contentious and sometimes difficult to resolve. The Postal Service leadership team has soldiered through an especially challenging period and shown great leadership and great dedication. They have the unqualified confidence and support of the Board of Governors as we move forward.

I would especially like to commend the Postmaster General for his excellent work in communicating internally and externally about the changes that we are implementing, the long-term future of the Postal Service and the future of mail. It can sometimes be tempting to focus solely on the immediate issues as they arise. Thankfully we have not fallen into that trap because the Postmaster General has tackled those immediate issues while also keeping our eyes focused on the long-term horizon.

Related articles:

• Greece Is the Word for USPS, Donahoe Says
• USPS Planning Retirement Incentives To Help Downsizing, Donahoe Testifies 
• How Congress Bankrupted the Postal Service in 3 Easy Steps
• Bill Would Address Federal and Postal Retirement Snafus

Read More

Trouble in Magazine Land: We're Running Out of Celebrities!

An early peak at First Quarter newsstand numbers shows a slowing decline in U.S. magazine sales, but also an ominous portent.

Noting that retail sales of gossip-oriented titles are in the tank, industry consortium MagNet told its affiliates this week that, "One of the major hurdles affecting weekly celebrity publications is the ability to find new celebrities and subject matter that consumers are interested in discovering."

Brad & Angie don't cut it. Early sales data for editions of People and OK! featuring the couple's recent engagement, MagNet said, "indicate that both issues will produce sales results at least twenty percent less than previous issues' average sales," MagNet said.

That's a huge disappointment to many in the industry who were hoping for yet another boost from Brangelina. (For the record, we at Dead Tree Edition never considered the engagement big news: After having six children, the couple has obviously been engaged in something for quite a while.)

"Late in the fourth quarter of 2011, we started to see a slowing of the downward sales trend for magazines," MagNet reports. Led by non-weekly titles, the trend continued in the First Quarter of 2012. The overall decline in dollars from a year ago was an estimated 5.6%, versus the 10% year-over-year declines typical of 2011.

As we say in the magazine industry, "Slightly down is the new up."

One of the big successes was the April issue of National Geographic featuring the Titanic, which is on track to sell nearly 200,000 copies, more than 50% above the three previous issues. (Note: The cover story was about the real Titanic, the one that sank 100 years ago, not the Hollywood version, in which celebrities swim about in water frigid enough to cause immediate muscle spasms while spouting inanities like "Promise me you'll survive.")

If disasters, not celebrities, are now the key to retail success, will we be seeing a lot of cover stories about the U.S. Postal Service?

Other articles about retail sales of magazines include:  

• Print Is Dead? Not For This Growing Publication Niche  
• Invasion of the Bookazines, Featuring the Return of the Living Dead 
• Stuck at the Borders: Magazine Publishers Have Failed to Explore the Amazon  
• Shootout at the Newsstand

Read More