1
00:00:05,800 --> 00:00:08,720
Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.

2
00:00:08,760 --> 00:00:11,520
Speaker 1: Along with my co host Lisa Bramowitz. Each day we

3
00:00:11,640 --> 00:00:15,120
Speaker 1: bring you the most important, noteworthy, and useful interviews for

4
00:00:15,200 --> 00:00:17,840
Speaker 1: you and your money, whether you're at the grocery store

5
00:00:17,960 --> 00:00:20,720
Speaker 1: or the trading floor. Find the Bloomberg p m L

6
00:00:20,840 --> 00:00:32,120
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We

7
00:00:32,159 --> 00:00:35,720
Speaker 1: are broadcasting live from Baltimore. We are at the National

8
00:00:35,840 --> 00:00:38,280
Speaker 1: Postal Forum, which is a partner of the United States

9
00:00:38,479 --> 00:00:41,479
Speaker 1: Postal Service. And I was looking at doing some research

10
00:00:41,520 --> 00:00:44,200
Speaker 1: about the United States Postal Service, and I was surprised

11
00:00:44,200 --> 00:00:47,519
Speaker 1: to find that if this were a private company last year,

12
00:00:47,560 --> 00:00:49,920
Speaker 1: it would have been the thirty ninth biggest company in

13
00:00:49,920 --> 00:00:55,640
Speaker 1: the Fortune five hundred corporations, which is impressive. And with

14
00:00:55,760 --> 00:00:57,440
Speaker 1: us to give us a little bit of more perspective

15
00:00:57,760 --> 00:01:01,640
Speaker 1: on both the company and the broader market for shipping

16
00:01:01,880 --> 00:01:05,600
Speaker 1: and frankly, making mail relevant in an era where people

17
00:01:05,600 --> 00:01:08,200
Speaker 1: are hooked to their phones, is Kristin Siever, chief Information

18
00:01:08,240 --> 00:01:12,080
Speaker 1: Officer and executive vice president of the United States Postal Service,

19
00:01:12,080 --> 00:01:15,080
Speaker 1: and she joins us uh here now, so you know, Kristin,

20
00:01:15,640 --> 00:01:17,440
Speaker 1: one thing that we've been hearing a lot about is

21
00:01:17,480 --> 00:01:20,400
Speaker 1: the importance to sort of transform, uh, the way people

22
00:01:20,400 --> 00:01:22,520
Speaker 1: think about mail, the way that they track it, the

23
00:01:22,560 --> 00:01:25,080
Speaker 1: way that they observe it and experience it. What do

24
00:01:25,120 --> 00:01:27,280
Speaker 1: you think is going to be the biggest challenge in

25
00:01:27,319 --> 00:01:30,520
Speaker 1: the year ahead as you sort of look out, try

26
00:01:30,560 --> 00:01:33,560
Speaker 1: to make it modern but also catered to nostalgia and

27
00:01:33,959 --> 00:01:39,600
Speaker 1: you know, also uh the amazonification of our world absolutely well,

28
00:01:39,640 --> 00:01:41,600
Speaker 1: you know, I think one of our greatest challenges is

29
00:01:41,640 --> 00:01:43,479
Speaker 1: going to be to keep pace. We've done a lot

30
00:01:43,480 --> 00:01:45,680
Speaker 1: of work, as you'll see at the National Postal Forum,

31
00:01:46,120 --> 00:01:49,280
Speaker 1: UH in building technologies and platforms to track mail, to

32
00:01:49,400 --> 00:01:52,640
Speaker 1: provide value to mail UM. But our challenges to keep

33
00:01:52,680 --> 00:01:55,680
Speaker 1: that mail relevant, to work with our customers to help

34
00:01:55,680 --> 00:02:00,000
Speaker 1: them grow their businesses, and to work as every industry

35
00:02:00,040 --> 00:02:02,040
Speaker 1: he has to do right now at an incredible pace

36
00:02:02,240 --> 00:02:06,040
Speaker 1: to keep up and leverage these technologies to the best extent.

37
00:02:06,320 --> 00:02:09,240
Speaker 1: How difficult is it? I was just looking at the

38
00:02:09,320 --> 00:02:14,560
Speaker 1: US Post Services UH income statement recent income statement, UH,

39
00:02:14,560 --> 00:02:16,280
Speaker 1: and there was a four hune seventy four million dollar

40
00:02:16,320 --> 00:02:18,760
Speaker 1: year of your decline in the second quarter, and it

41
00:02:18,880 --> 00:02:22,880
Speaker 1: was in large part due to having to pre fund

42
00:02:23,000 --> 00:02:26,280
Speaker 1: seventy five years of retiree health benefits and how much

43
00:02:26,280 --> 00:02:29,440
Speaker 1: of that is a pressure on being able to adapt

44
00:02:29,520 --> 00:02:33,320
Speaker 1: to the changing environment. Yeah, the Postal Service faces significant

45
00:02:33,360 --> 00:02:36,600
Speaker 1: pressure when it comes to our finances and and how

46
00:02:36,600 --> 00:02:38,960
Speaker 1: we're run. And we really have three things that we're

47
00:02:38,960 --> 00:02:41,720
Speaker 1: trying to focus on. The first is for the Postal

48
00:02:41,760 --> 00:02:45,240
Speaker 1: Service to adapt quickly and to manage its operation. Uh,

49
00:02:45,280 --> 00:02:48,320
Speaker 1: to react to declining volumes, but also to compete where

50
00:02:48,400 --> 00:02:51,839
Speaker 1: volumes are increasing. Right, so that's quite a challenge. Are

51
00:02:51,880 --> 00:02:55,680
Speaker 1: the two challenges are legislative and regulatory and uh, we

52
00:02:55,760 --> 00:02:58,000
Speaker 1: have a positive bill that came out of committee for

53
00:02:58,120 --> 00:03:01,160
Speaker 1: postal reform that's really important to us. What's the what's

54
00:03:01,160 --> 00:03:03,560
Speaker 1: the substance of it. The substance of the Postal Reform

55
00:03:03,600 --> 00:03:07,440
Speaker 1: bill is basically allows us to address our retiree health

56
00:03:07,440 --> 00:03:11,280
Speaker 1: benefit There you go issue with integrating medicare, allows us

57
00:03:11,320 --> 00:03:14,959
Speaker 1: to use postal service demographics instead of federal government demographics

58
00:03:14,960 --> 00:03:18,040
Speaker 1: everythink about the postal Service. We have workers all over

59
00:03:18,080 --> 00:03:21,840
Speaker 1: the United States in um varying income levels. It allows

60
00:03:21,919 --> 00:03:26,399
Speaker 1: us to take back some of the exigent price increase,

61
00:03:26,600 --> 00:03:29,000
Speaker 1: and it also gives us a little bit of flexibility

62
00:03:29,000 --> 00:03:31,799
Speaker 1: for some new products and services. That we're excited about. Well, so,

63
00:03:31,840 --> 00:03:34,560
Speaker 1: since we all talk about Amazon so much and Amazon

64
00:03:34,680 --> 00:03:37,240
Speaker 1: is just decimating the entire retail sector. As what people

65
00:03:37,280 --> 00:03:41,600
Speaker 1: have been saying, Um, do you find that the US

66
00:03:41,640 --> 00:03:44,480
Speaker 1: Postal Service is able to keep up from a technological

67
00:03:44,520 --> 00:03:47,200
Speaker 1: point of view and being able to deliver all of

68
00:03:47,240 --> 00:03:48,920
Speaker 1: the boxes? And can you give us a sense of

69
00:03:49,000 --> 00:03:52,840
Speaker 1: how much the just sheer volume of packages has increased

70
00:03:53,000 --> 00:03:56,400
Speaker 1: over the past few years. Yeah, we've had double digit

71
00:03:56,440 --> 00:03:59,400
Speaker 1: increase in package volume year over year for the last

72
00:03:59,400 --> 00:04:01,040
Speaker 1: three years. But the thing that's been great about the

73
00:04:01,040 --> 00:04:04,120
Speaker 1: postal services that we have the delivery muscle deflects that

74
00:04:04,200 --> 00:04:06,120
Speaker 1: we go to every house, we go to every business,

75
00:04:06,440 --> 00:04:09,080
Speaker 1: and it's really been an opportunity for us to showcase

76
00:04:09,280 --> 00:04:12,080
Speaker 1: our strength what we've been doing for over two forty years.

77
00:04:12,120 --> 00:04:13,960
Speaker 1: But aren't there a lot more competitors because people are

78
00:04:13,960 --> 00:04:16,520
Speaker 1: looking and saying, wow, this is the future, right, this

79
00:04:16,600 --> 00:04:19,000
Speaker 1: is the reality is that you're gonna be able to

80
00:04:19,120 --> 00:04:21,000
Speaker 1: order something, pick something up, and then it's going to

81
00:04:21,080 --> 00:04:22,719
Speaker 1: come to your home. And so they're going to be

82
00:04:22,760 --> 00:04:29,239
Speaker 1: some probably shippers and delivery companies they're gonna try to compete. Absolutely. Um,

83
00:04:29,400 --> 00:04:31,480
Speaker 1: So one of the advantages we have is we've already

84
00:04:31,520 --> 00:04:34,480
Speaker 1: built out our network UH, and we leverage that network.

85
00:04:34,520 --> 00:04:37,600
Speaker 1: The other thing is, even with competition, which is fierce,

86
00:04:37,640 --> 00:04:40,560
Speaker 1: but we still deliver more e commerce packages than any

87
00:04:40,600 --> 00:04:43,120
Speaker 1: of the provider in the country. UH. And we will

88
00:04:43,160 --> 00:04:46,360
Speaker 1: continue to leverage our brand, our trusted presence, and everybody's

89
00:04:46,520 --> 00:04:50,120
Speaker 1: business and community UH to compete and to win for

90
00:04:50,160 --> 00:04:53,400
Speaker 1: that package delivery. We were talking earlier about drones. Are

91
00:04:53,400 --> 00:04:55,560
Speaker 1: those on your radar? They have to as this chief

92
00:04:55,560 --> 00:04:58,800
Speaker 1: information officer, absolutely and I get that question a lot. Okay, So,

93
00:04:58,920 --> 00:05:01,680
Speaker 1: so how do you for see drones playing into the

94
00:05:01,760 --> 00:05:05,360
Speaker 1: United States Postal Services business plan in the near future. Well,

95
00:05:05,400 --> 00:05:07,599
Speaker 1: I think for us, what's important is we have many

96
00:05:07,720 --> 00:05:10,520
Speaker 1: use cases for delivery. Right. We deliver in urban areas,

97
00:05:10,520 --> 00:05:13,560
Speaker 1: we deliver in rural areas. We deliver in the Grand Canyon.

98
00:05:13,960 --> 00:05:17,800
Speaker 1: So maybe there's maybe the dropdown packages into the into

99
00:05:17,800 --> 00:05:20,320
Speaker 1: the Colorado River go down and we've had delivery on

100
00:05:20,400 --> 00:05:23,279
Speaker 1: burrows into the Grand Canyons. That might be a possible

101
00:05:23,360 --> 00:05:26,000
Speaker 1: use case of drone delivery for the Postal Service. Right.

102
00:05:26,000 --> 00:05:28,800
Speaker 1: There are some places that are hard to get to UH,

103
00:05:28,839 --> 00:05:33,000
Speaker 1: and we definitely foresee um uses like that but we

104
00:05:33,000 --> 00:05:35,680
Speaker 1: can also use it to survey our own infrastructure. There's

105
00:05:35,680 --> 00:05:37,840
Speaker 1: many different use cases. So what we're doing is staying

106
00:05:37,839 --> 00:05:40,279
Speaker 1: in touch with the technology, staying in touch with the

107
00:05:40,279 --> 00:05:44,240
Speaker 1: regulations UH, and really scrubbing our use cases to see

108
00:05:44,279 --> 00:05:46,400
Speaker 1: where our best UH fit's gonna be. You know, we've

109
00:05:46,440 --> 00:05:51,039
Speaker 1: talked about how German postals, the German Postal Service in

110
00:05:51,080 --> 00:05:55,880
Speaker 1: particular has looked at autonomous driving vehicles to help reduce

111
00:05:56,000 --> 00:06:00,240
Speaker 1: costs and increase the delivery predictability. Has that been on

112
00:06:00,279 --> 00:06:03,560
Speaker 1: your radar at all? Absolutely? We we have some efforts

113
00:06:03,640 --> 00:06:07,880
Speaker 1: with autonomous working with academic institutions UH as far as

114
00:06:07,920 --> 00:06:09,760
Speaker 1: what would be the use case, how would we use

115
00:06:09,800 --> 00:06:13,520
Speaker 1: it in the postal service UM? For us, you know,

116
00:06:13,560 --> 00:06:15,440
Speaker 1: one of the things is we have such a significantly

117
00:06:15,520 --> 00:06:20,960
Speaker 1: large fleet, so over two hundred and seventy thousand vehicles,

118
00:06:20,960 --> 00:06:24,400
Speaker 1: so that have to be driven and maintained throughout throughout

119
00:06:24,440 --> 00:06:26,360
Speaker 1: the country to deliver the mail every day, and now

120
00:06:26,360 --> 00:06:29,200
Speaker 1: we deliver seven days a week. So we definitely foresee

121
00:06:29,200 --> 00:06:32,000
Speaker 1: that we'll have use cases for autonomous vehicles, whether it's

122
00:06:32,000 --> 00:06:35,520
Speaker 1: in actual delivery or we're also a huge logistics provider.

123
00:06:35,560 --> 00:06:37,719
Speaker 1: We have to get the mail from across the country.

124
00:06:37,800 --> 00:06:40,240
Speaker 1: So what how is much? How much has the ratio

125
00:06:40,400 --> 00:06:44,800
Speaker 1: between UH letters and packages changed? I imagine that once

126
00:06:44,839 --> 00:06:48,000
Speaker 1: upon a time there are more letters and fewer packages,

127
00:06:48,160 --> 00:06:51,560
Speaker 1: and now it has reversed. Right, It hasn't fully reversed.

128
00:06:51,920 --> 00:06:55,120
Speaker 1: Oh No, letters are still the predominant product that we have.

129
00:06:55,400 --> 00:07:00,360
Speaker 1: But basically as letters are declining, packages are increa using.

130
00:07:00,720 --> 00:07:03,479
Speaker 1: So we haven't crossed that great divide of where total

131
00:07:03,560 --> 00:07:06,520
Speaker 1: letter volume is less than packages. But you know, the

132
00:07:06,560 --> 00:07:09,960
Speaker 1: decline and letter volume is concerning UM and that's why

133
00:07:10,000 --> 00:07:12,200
Speaker 1: we have to compete for the package business and and

134
00:07:12,240 --> 00:07:14,920
Speaker 1: continue to deliver for the American public. What's going to

135
00:07:14,960 --> 00:07:17,920
Speaker 1: be the number one technological advancement in the next year

136
00:07:18,040 --> 00:07:22,760
Speaker 1: for USPS. I think the number one advancement that will

137
00:07:22,800 --> 00:07:26,560
Speaker 1: be able to leverage is our advanced analytics platform UH

138
00:07:26,600 --> 00:07:29,960
Speaker 1: to continue to provide value to the mail but also

139
00:07:30,040 --> 00:07:32,600
Speaker 1: to find ways to enhance our own business UH and

140
00:07:32,600 --> 00:07:35,360
Speaker 1: to find those opportunities that might allow us to reduce costs,

141
00:07:35,720 --> 00:07:39,120
Speaker 1: might allow us to produce new products. We put a

142
00:07:39,160 --> 00:07:41,559
Speaker 1: lot of investment into that over the last three years,

143
00:07:41,560 --> 00:07:43,720
Speaker 1: and now that's finally coming to fruition. Kind of what

144
00:07:43,760 --> 00:07:46,840
Speaker 1: we talked about before about being able to UH with

145
00:07:46,920 --> 00:07:49,960
Speaker 1: preeminent amera, talking about how people can look and scan

146
00:07:50,040 --> 00:07:53,280
Speaker 1: and see what's in their mailboxes without actually being there

147
00:07:53,280 --> 00:07:59,280
Speaker 1: and possibly even use some of the UH advertisement flaws delivery.

148
00:07:59,320 --> 00:08:01,640
Speaker 1: Today this year at the National Postal Forum, we have

149
00:08:01,720 --> 00:08:05,560
Speaker 1: two major platforms that were leveraging and formed delivery and

150
00:08:05,600 --> 00:08:08,240
Speaker 1: informed visibility, and they really go hand in hand. So

151
00:08:08,280 --> 00:08:11,200
Speaker 1: Informed Delivery is exciting because every consumer has access to

152
00:08:11,280 --> 00:08:14,680
Speaker 1: it and can sign up and and you know tomorrow

153
00:08:15,240 --> 00:08:17,560
Speaker 1: be looking at those images of their mail. Thank you

154
00:08:17,600 --> 00:08:19,760
Speaker 1: so much for joining us, Kristin sever It was really

155
00:08:19,800 --> 00:08:22,040
Speaker 1: a pleasure to speak with you. Christin Siever is chief

156
00:08:22,080 --> 00:08:25,200
Speaker 1: Information Officer and executive a vice president of the United

157
00:08:25,240 --> 00:08:29,280
Speaker 1: States Postal Service here in Baltimore, Maryland, where we are

158
00:08:29,320 --> 00:08:44,840
Speaker 1: broadcasting live from the National Postal for Forum right now, however,

159
00:08:44,880 --> 00:08:46,880
Speaker 1: I want to bring in Jonathan Nicholson, senior reporter at

160
00:08:46,880 --> 00:08:49,720
Speaker 1: Bloomberg b n A, to give us some perspective on

161
00:08:50,000 --> 00:08:54,240
Speaker 1: what we've gleaned so far from President Trump's hoped budget

162
00:08:54,240 --> 00:08:56,360
Speaker 1: anyway UH, and how likely it is that he is

163
00:08:56,400 --> 00:08:59,240
Speaker 1: going to get through some of what he wants. Jonathan,

164
00:08:59,240 --> 00:09:01,800
Speaker 1: Thank you so much for joining us Jonathan, Uh, what

165
00:09:01,960 --> 00:09:05,040
Speaker 1: have we gleaned so far about what President Trump would

166
00:09:05,080 --> 00:09:08,160
Speaker 1: like to see in the budget. Well, he goes through

167
00:09:08,200 --> 00:09:11,239
Speaker 1: a lot of One could argue sort of fiscal gymnastics

168
00:09:11,320 --> 00:09:15,199
Speaker 1: to try and um sort of square the circle of

169
00:09:15,200 --> 00:09:20,199
Speaker 1: of doing tax reform, increasing defense, UM, but also trying

170
00:09:20,200 --> 00:09:23,679
Speaker 1: to get to something close to balance by the end

171
00:09:23,679 --> 00:09:26,640
Speaker 1: of ten years, which has been a long term Republican

172
00:09:26,960 --> 00:09:29,679
Speaker 1: budget goal for a long time. So when doing so,

173
00:09:29,800 --> 00:09:34,680
Speaker 1: basically they rely on some economic growth projections that people

174
00:09:35,000 --> 00:09:38,439
Speaker 1: have some questions about, and they rely on some some

175
00:09:38,480 --> 00:09:43,160
Speaker 1: deep cuts in both the non defensivescretionary and some mandatory

176
00:09:43,320 --> 00:09:46,599
Speaker 1: entitlement spending programs. So I'll just go through some of

177
00:09:46,640 --> 00:09:48,840
Speaker 1: the headlines that I've been looking at. Some of the information.

178
00:09:48,880 --> 00:09:51,000
Speaker 1: People have said that it would hit uh, you know,

179
00:09:51,080 --> 00:09:53,960
Speaker 1: all of the welfare and sort of entitlement programs other

180
00:09:54,000 --> 00:09:57,480
Speaker 1: than Medicaid, for example. It would strip away a lot

181
00:09:57,520 --> 00:10:00,320
Speaker 1: more there. It would make it tougher to at some

182
00:10:00,400 --> 00:10:05,080
Speaker 1: of the tax breaks for lower income individuals. It would

183
00:10:05,120 --> 00:10:09,520
Speaker 1: remove uh, money for some of the offices that have

184
00:10:10,120 --> 00:10:13,720
Speaker 1: been expanded under under a former President Obama in favor

185
00:10:13,800 --> 00:10:18,040
Speaker 1: of bolstering defense. Right, I mean is that basically the gist.

186
00:10:18,080 --> 00:10:20,280
Speaker 1: I mean, what are sort of the areas that you

187
00:10:20,320 --> 00:10:24,240
Speaker 1: think are going to stick and have staying power through

188
00:10:24,320 --> 00:10:28,560
Speaker 1: all of the congressional negotiations that are inevitable. Well, it's

189
00:10:28,559 --> 00:10:33,080
Speaker 1: it's actually kind of tough to see exactly, um, how

190
00:10:33,200 --> 00:10:37,600
Speaker 1: much will stick and what specifically will stick. Um. Congressional

191
00:10:37,600 --> 00:10:41,960
Speaker 1: Republicans are actually in many cases being very publicly neutral

192
00:10:42,640 --> 00:10:47,640
Speaker 1: uh and privately, um, not very accepting of this, um

193
00:10:47,800 --> 00:10:52,120
Speaker 1: real appropriate. Well, because you know, it's one thing to

194
00:10:52,240 --> 00:10:55,280
Speaker 1: say that you want to balance the budget and so on,

195
00:10:55,360 --> 00:10:57,400
Speaker 1: it's quite another one actually comes to actually to put

196
00:10:57,400 --> 00:11:00,640
Speaker 1: the the you know, where the rubber beats the road. Um.

197
00:11:00,679 --> 00:11:02,280
Speaker 1: And so one of the things that's basically just had

198
00:11:02,559 --> 00:11:05,959
Speaker 1: the House chairman of the Appropriations Committee, the Freelinghouse and

199
00:11:06,000 --> 00:11:09,640
Speaker 1: put out a very neutral, uh, neither for it nor

200
00:11:09,679 --> 00:11:12,200
Speaker 1: against it kind of statement just a couple of minutes ago.

201
00:11:12,720 --> 00:11:15,559
Speaker 1: Or he said, yeah, our job is appropriators is to

202
00:11:15,600 --> 00:11:18,520
Speaker 1: exercise the power of the purse, which is not really

203
00:11:18,520 --> 00:11:21,400
Speaker 1: that newsy because that is their job, all right. So

204
00:11:21,400 --> 00:11:23,600
Speaker 1: it's basically a nonstatement. He doesn't really want to comment

205
00:11:23,600 --> 00:11:25,000
Speaker 1: on it one way or another. Can we get a

206
00:11:25,040 --> 00:11:29,199
Speaker 1: sense of history here with what past presidents have done

207
00:11:29,240 --> 00:11:32,719
Speaker 1: when they've released their budgets or their proposed budgets. How

208
00:11:32,800 --> 00:11:36,439
Speaker 1: much support do they generally get in advance from either

209
00:11:36,760 --> 00:11:40,439
Speaker 1: congressmen of their same party or reach across the aisle.

210
00:11:40,480 --> 00:11:42,600
Speaker 1: I mean, usually is their leg work that's done ahead

211
00:11:42,640 --> 00:11:46,680
Speaker 1: of time or is this always the opening salvo? It's

212
00:11:46,679 --> 00:11:49,240
Speaker 1: it's certainly an opening salvo. I mean, you know, there's

213
00:11:49,240 --> 00:11:53,320
Speaker 1: the running joke, it's it's almost clichete even joke about it. Now,

214
00:11:53,880 --> 00:11:56,640
Speaker 1: is that no matter what the party mixes of who

215
00:11:56,679 --> 00:11:59,600
Speaker 1: holds the who holds the Congress, who holds the White House,

216
00:12:00,080 --> 00:12:02,040
Speaker 1: that when the president sends up a budget, someone will

217
00:12:02,080 --> 00:12:04,800
Speaker 1: always say, quote, it's dead on arrival, um. And that

218
00:12:04,920 --> 00:12:07,120
Speaker 1: is the case with this one. The interesting thing here

219
00:12:07,160 --> 00:12:09,240
Speaker 1: is that this is the first year budget that has

220
00:12:09,280 --> 00:12:13,000
Speaker 1: taken this long to send it up UM, and it

221
00:12:13,120 --> 00:12:16,440
Speaker 1: still is lacking the details of the tax reform proposal

222
00:12:16,520 --> 00:12:18,760
Speaker 1: that they want to get to agreement on with the

223
00:12:18,760 --> 00:12:22,640
Speaker 1: House and Senate Republicans. UM. And yet it's still is

224
00:12:22,720 --> 00:12:25,880
Speaker 1: this's got this very The appropriators don't like the cuts

225
00:12:25,920 --> 00:12:30,400
Speaker 1: to discretionary spending, The moderates don't like the cuts to

226
00:12:30,480 --> 00:12:33,199
Speaker 1: some of the some of the entitlements, some of the

227
00:12:33,280 --> 00:12:36,080
Speaker 1: some of the social net programs. UM. So it's kind

228
00:12:36,080 --> 00:12:37,880
Speaker 1: of interesting that usually if you do have a budget

229
00:12:37,880 --> 00:12:41,680
Speaker 1: that has some degree of momentum to it, it usually

230
00:12:41,760 --> 00:12:45,120
Speaker 1: is the president's first year budget. And in that sense,

231
00:12:45,160 --> 00:12:47,760
Speaker 1: what we're seeing here today, particularly even with Trump even

232
00:12:47,760 --> 00:12:49,480
Speaker 1: out of out of the country, while this budget is

233
00:12:49,520 --> 00:12:53,760
Speaker 1: being dropped, is not nearly I think historically what we

234
00:12:53,840 --> 00:12:56,559
Speaker 1: usually see, um in terms of first year budget reaction.

235
00:12:57,240 --> 00:12:59,480
Speaker 1: You know, it's funny that you mentioned that he's President

236
00:12:59,520 --> 00:13:01,360
Speaker 1: Trump is at of the country, because that was my

237
00:13:01,440 --> 00:13:03,680
Speaker 1: first comment to why is he doing it now while

238
00:13:03,679 --> 00:13:06,120
Speaker 1: he's not here, to kind of do the rounds with

239
00:13:06,160 --> 00:13:09,240
Speaker 1: it and give people an explanation of why he's so

240
00:13:09,360 --> 00:13:12,560
Speaker 1: behind this particular plan, especially if people are coming out

241
00:13:12,559 --> 00:13:17,360
Speaker 1: with pretty neutral expressions of you know, how they assess it.

242
00:13:17,960 --> 00:13:21,120
Speaker 1: I mean, is that typical you're kind of implying, not

243
00:13:21,240 --> 00:13:24,240
Speaker 1: so much. And if it's not typical, was this planned

244
00:13:24,280 --> 00:13:27,160
Speaker 1: this way or did it just sort of happen this way? Well,

245
00:13:27,240 --> 00:13:32,440
Speaker 1: he was They picked this budget release date maybe about

246
00:13:32,480 --> 00:13:34,440
Speaker 1: two weeks ago or so. I think by then they

247
00:13:34,480 --> 00:13:36,760
Speaker 1: probably already had I would suspect at least they already

248
00:13:36,760 --> 00:13:39,480
Speaker 1: had the dates locked in for the international trip that

249
00:13:39,520 --> 00:13:43,040
Speaker 1: he that he's on now. UM. I do not recall

250
00:13:43,160 --> 00:13:45,280
Speaker 1: the last time a president was out of the country

251
00:13:45,280 --> 00:13:47,800
Speaker 1: when his budget dropped. But I also haven't checked, so

252
00:13:47,840 --> 00:13:50,280
Speaker 1: I wouldn't necessarily read too much in that. But you're right.

253
00:13:50,400 --> 00:13:53,400
Speaker 1: Usually it is the day when the president says, you know,

254
00:13:53,559 --> 00:13:57,360
Speaker 1: here's what we stand for fiscal fiscal policy wise. UM.

255
00:13:57,440 --> 00:14:01,280
Speaker 1: And today that burden is being basically borne by mc mulvaney,

256
00:14:01,320 --> 00:14:03,160
Speaker 1: who is you know, as a as a cabinet member,

257
00:14:03,160 --> 00:14:06,000
Speaker 1: as an MB person, but is not, you know, not

258
00:14:06,120 --> 00:14:10,600
Speaker 1: the president. UM. So so can you give me a sense, Jonathan,

259
00:14:10,760 --> 00:14:12,560
Speaker 1: of what the next steps are sort of how this

260
00:14:12,600 --> 00:14:17,840
Speaker 1: will move and be potentially implemented if at all. Uh.

261
00:14:17,880 --> 00:14:20,920
Speaker 1: There's sort of a two two things to watch for. Basically,

262
00:14:20,960 --> 00:14:26,000
Speaker 1: the House in Senate budget committees will take this under adversement,

263
00:14:26,280 --> 00:14:27,960
Speaker 1: you know, and take a look at it. They will

264
00:14:28,000 --> 00:14:31,640
Speaker 1: do their own budget resolutions, UM probably in June. UM

265
00:14:31,680 --> 00:14:36,040
Speaker 1: they have to do a budget resolution. If Republicans hope

266
00:14:36,080 --> 00:14:38,560
Speaker 1: to propiscate teen, if the Provolicans hope to do tax

267
00:14:38,560 --> 00:14:43,120
Speaker 1: reform with Republican only votes as they plan, UM is

268
00:14:43,320 --> 00:14:45,760
Speaker 1: so so what you look with for that is whether

269
00:14:45,880 --> 00:14:49,840
Speaker 1: or not they set up some reconciliation structions for tax

270
00:14:49,840 --> 00:14:53,480
Speaker 1: reform and for some of these spending cuts that that

271
00:14:53,560 --> 00:14:55,600
Speaker 1: Trump is wanting. That's one measure of how much of

272
00:14:55,640 --> 00:14:58,680
Speaker 1: this one get actually potentially enacted into law. The other

273
00:14:58,720 --> 00:15:02,520
Speaker 1: aspect of the appropriations processes, well, the appropriators marked to

274
00:15:02,560 --> 00:15:07,400
Speaker 1: the one point zero six five trillion of appropriated dollars

275
00:15:07,440 --> 00:15:10,640
Speaker 1: that are set up in this in this budget UM,

276
00:15:10,720 --> 00:15:13,400
Speaker 1: and that seems to be a little bit closer to

277
00:15:13,400 --> 00:15:17,080
Speaker 1: to being UM to happening. I think there's still a

278
00:15:17,160 --> 00:15:20,200
Speaker 1: question of how they do the defense non defense mix,

279
00:15:20,440 --> 00:15:23,360
Speaker 1: which they probably will not do UM as much of

280
00:15:23,400 --> 00:15:27,720
Speaker 1: a mix toward defense as Trump as proposed. UM. Jonathan,

281
00:15:27,760 --> 00:15:30,760
Speaker 1: I'm looking at a headline on the Bloomberg. Trump's three

282
00:15:30,800 --> 00:15:35,200
Speaker 1: point six trillion dollar budget cuts hit his own supporters hard.

283
00:15:35,200 --> 00:15:38,320
Speaker 1: In other words, the people who are going to be

284
00:15:38,400 --> 00:15:42,600
Speaker 1: the worst benefited to the least benefited from his current

285
00:15:42,600 --> 00:15:45,320
Speaker 1: proposal are some of the people who supported him the most.

286
00:15:45,320 --> 00:15:48,800
Speaker 1: Can you explain how that is? Oh, well, there's a

287
00:15:48,840 --> 00:15:52,760
Speaker 1: there's a lot of political reporting about how much of

288
00:15:52,760 --> 00:15:58,560
Speaker 1: his support UM was in sort of UM hard scrabble economically, UM,

289
00:15:59,160 --> 00:16:03,120
Speaker 1: tough areas West Virginia, Kentucky, so on. Uh. And in

290
00:16:03,160 --> 00:16:06,440
Speaker 1: those areas, many of those many that's probing one, but

291
00:16:07,000 --> 00:16:11,520
Speaker 1: a certain proportion are on say, social Security disability, which

292
00:16:11,600 --> 00:16:14,120
Speaker 1: is one of the things that is proposed to be

293
00:16:14,160 --> 00:16:19,000
Speaker 1: cut on this. Another is UM uh snap what used

294
00:16:19,040 --> 00:16:22,720
Speaker 1: to be called food stamps. UM. So this certainly looks

295
00:16:22,800 --> 00:16:27,120
Speaker 1: at those at those areas UM and and and to

296
00:16:27,200 --> 00:16:33,000
Speaker 1: the extent that those are concentrated among rural rural supporters

297
00:16:33,080 --> 00:16:35,920
Speaker 1: of of Trump, UH, it would indeed be certain fighting

298
00:16:36,040 --> 00:16:38,920
Speaker 1: fighting hand they want to bring in back. Jonathan Nicholson,

299
00:16:38,960 --> 00:16:41,320
Speaker 1: senior reporter at Bloomberg b NA, to give us a

300
00:16:41,320 --> 00:16:43,960
Speaker 1: little bit of perspective, Jonathan, what stood out to you

301
00:16:44,080 --> 00:16:47,160
Speaker 1: as sort of the most important thing uh that mcmulhenney

302
00:16:47,240 --> 00:16:50,200
Speaker 1: just said. There were two things that struck me. UM.

303
00:16:50,320 --> 00:16:53,480
Speaker 1: One is he's kind of picked the three percent growth

304
00:16:53,560 --> 00:16:56,040
Speaker 1: rate as his hill to die on UM, which I

305
00:16:56,080 --> 00:16:58,240
Speaker 1: think is going to be a tough sell when he

306
00:16:58,280 --> 00:17:01,240
Speaker 1: appears before the Budget Committee is uh tomorrow in the

307
00:17:01,320 --> 00:17:04,119
Speaker 1: day after UM. A lot of mainstream economists think that

308
00:17:04,119 --> 00:17:07,800
Speaker 1: that's just not credible UM and uh. And so that's

309
00:17:07,880 --> 00:17:10,080
Speaker 1: the fact he stucked his guns on that seems that's

310
00:17:10,080 --> 00:17:12,800
Speaker 1: gonna be an issue. The other thing was he changed

311
00:17:12,840 --> 00:17:18,720
Speaker 1: his wording on on Social Security to say social Security retirement. UM. Now,

312
00:17:18,720 --> 00:17:20,359
Speaker 1: in the past couple of days and the previous and

313
00:17:20,359 --> 00:17:21,800
Speaker 1: so on, they've been talking about they haven't they don't

314
00:17:21,840 --> 00:17:25,080
Speaker 1: touch social Security. UM. But I think when they talk

315
00:17:25,119 --> 00:17:27,680
Speaker 1: when they're doing the disability insurance, which is part of

316
00:17:27,680 --> 00:17:30,200
Speaker 1: the Social Security program and has included when you hear

317
00:17:30,200 --> 00:17:32,520
Speaker 1: those dates about win social Security goes bankrupt and so on,

318
00:17:32,760 --> 00:17:34,239
Speaker 1: it's a separate trust fund that they put the old

319
00:17:34,320 --> 00:17:37,720
Speaker 1: dates Survivors Trust Fund and the Disability Insurance Trust Fund

320
00:17:37,720 --> 00:17:40,119
Speaker 1: together called social Security and say it goes bankrupting X

321
00:17:40,240 --> 00:17:42,400
Speaker 1: y Z year or so on. UM. I think it's

322
00:17:42,440 --> 00:17:44,560
Speaker 1: interesting that he sort of walked that back to say

323
00:17:44,600 --> 00:17:49,479
Speaker 1: social Security retirement UM as seemingly a tacit acknowledgement of

324
00:17:49,520 --> 00:17:51,920
Speaker 1: that criticism that they were trying to be evasive there.

325
00:17:52,720 --> 00:17:54,600
Speaker 1: You know. I thought it was also interesting that the

326
00:17:54,680 --> 00:17:58,040
Speaker 1: way that the Trump administration is going to measure the

327
00:17:58,320 --> 00:18:01,320
Speaker 1: success of programs in the passion of programs is not

328
00:18:01,359 --> 00:18:04,119
Speaker 1: how many people they serve, but by how many people

329
00:18:04,160 --> 00:18:06,560
Speaker 1: get off of some of the entitlement programs. So that

330
00:18:06,680 --> 00:18:09,360
Speaker 1: stand out to you or what does that actually mean

331
00:18:09,400 --> 00:18:15,080
Speaker 1: to you? That's a longstanding um rhetorical point that a

332
00:18:15,119 --> 00:18:20,160
Speaker 1: lot of a lot of anti spending Republicans have, basically

333
00:18:20,160 --> 00:18:22,159
Speaker 1: that you can't measure the success of programs by the

334
00:18:22,200 --> 00:18:25,400
Speaker 1: amount of money spent um. Now, there's usually a path

335
00:18:25,480 --> 00:18:30,040
Speaker 1: for this, given for defense, because defense, as his budget

336
00:18:30,080 --> 00:18:33,440
Speaker 1: has been about doubled over the last seventeen years or so. Um.

337
00:18:33,480 --> 00:18:35,600
Speaker 1: But now the other aspect of that is that he

338
00:18:35,600 --> 00:18:38,000
Speaker 1: has a point in the sense that CBO does assume

339
00:18:38,640 --> 00:18:41,600
Speaker 1: that if inflation is three percent, then for a program

340
00:18:41,640 --> 00:18:43,360
Speaker 1: to do the same thing next year, is it needs

341
00:18:43,359 --> 00:18:46,639
Speaker 1: at least a three percent increase. So in that sense

342
00:18:47,119 --> 00:18:52,360
Speaker 1: there are sort of inflation expectations ratcheted into the CBO

343
00:18:53,080 --> 00:18:57,239
Speaker 1: nonpartisan baseline. You know, I thought that it was also uh,

344
00:18:57,440 --> 00:18:58,840
Speaker 1: you know, I want to go back to the wall

345
00:18:59,280 --> 00:19:02,120
Speaker 1: comments pick as people have said that there really hasn't

346
00:19:02,160 --> 00:19:06,720
Speaker 1: been uh much money put aside to finance this program

347
00:19:06,760 --> 00:19:10,119
Speaker 1: to build a wall between the United States and Mexico.

348
00:19:10,280 --> 00:19:13,640
Speaker 1: People question, perhaps President Trump doesn't really mean a physical wall,

349
00:19:13,720 --> 00:19:15,880
Speaker 1: but something that's a little bit more I'm a mix

350
00:19:15,920 --> 00:19:20,040
Speaker 1: between more surveillance and uh and some physical building. But

351
00:19:20,280 --> 00:19:23,240
Speaker 1: but Mitmilviny said, we are dead serious about the border wall,

352
00:19:23,240 --> 00:19:25,080
Speaker 1: and this is one of his top three priorities. What

353
00:19:25,240 --> 00:19:27,119
Speaker 1: is that? What does that signifying? Where? Where? Where is

354
00:19:27,160 --> 00:19:30,119
Speaker 1: the money going to come from? Well, in the in

355
00:19:30,160 --> 00:19:32,880
Speaker 1: the budget, say they did one point six billion for

356
00:19:32,880 --> 00:19:35,560
Speaker 1: for the wall, at least sort of start getting started.

357
00:19:36,240 --> 00:19:39,640
Speaker 1: I think the significance of that is that when when

358
00:19:39,680 --> 00:19:42,560
Speaker 1: it comes time in September, everyone here on the Hill

359
00:19:42,600 --> 00:19:45,240
Speaker 1: seems resigned to the idea already that we're looking at

360
00:19:45,240 --> 00:19:48,240
Speaker 1: a continuing resolution come September to keep the government open.

361
00:19:48,760 --> 00:19:50,560
Speaker 1: And so that will mean that again there will need

362
00:19:50,560 --> 00:19:54,160
Speaker 1: to be democratic support for doing so. And so that's

363
00:19:54,160 --> 00:19:56,000
Speaker 1: where you set up this question whether we're going to

364
00:19:56,119 --> 00:19:59,359
Speaker 1: have a shutdown showdown, whether Trump will follow through and

365
00:19:59,400 --> 00:20:01,159
Speaker 1: what he said a couple weeks ago about you know,

366
00:20:01,240 --> 00:20:05,359
Speaker 1: a good shutdown, things like that, UM, and so in

367
00:20:05,480 --> 00:20:08,480
Speaker 1: that debate, should that happen in September as people seem

368
00:20:08,520 --> 00:20:11,560
Speaker 1: to expect. Um this question of wall funding, which was

369
00:20:11,640 --> 00:20:15,880
Speaker 1: sort of sort of worked through and sort of elited

370
00:20:16,200 --> 00:20:19,440
Speaker 1: or sort of you know, kind of danced around in

371
00:20:19,600 --> 00:20:22,760
Speaker 1: flashed omnibus. UM. If that it truly is one of

372
00:20:22,800 --> 00:20:26,840
Speaker 1: the top three priorities for the administration, then that could

373
00:20:26,840 --> 00:20:29,520
Speaker 1: be a very big sticking point come September. That would

374
00:20:29,520 --> 00:20:32,840
Speaker 1: be that races of flag there seems to me, Um,

375
00:20:32,840 --> 00:20:34,560
Speaker 1: And just going back to what you were saying about

376
00:20:34,560 --> 00:20:37,479
Speaker 1: the three growth rate, you're you flagged and rightly so

377
00:20:37,560 --> 00:20:39,680
Speaker 1: that a lot of economist say it that is not probable.

378
00:20:40,119 --> 00:20:43,240
Speaker 1: In the New York term. You have people including Harvard

379
00:20:43,240 --> 00:20:45,479
Speaker 1: professor Larry Summers, coming out and saying that just does

380
00:20:45,520 --> 00:20:48,080
Speaker 1: not seem, uh in the cards, given the fact that

381
00:20:48,080 --> 00:20:50,879
Speaker 1: you do have an aging population and just generally slower

382
00:20:50,920 --> 00:20:53,879
Speaker 1: growth around the world. Do you expect there to be

383
00:20:54,000 --> 00:20:56,760
Speaker 1: hearings where we have economists coming in and sort of

384
00:20:56,920 --> 00:20:59,760
Speaker 1: throwing cold water on that three percent rate? Or is

385
00:20:59,760 --> 00:21:01,240
Speaker 1: this is this it? I mean it is this going

386
00:21:01,320 --> 00:21:03,919
Speaker 1: to be basically, uh, you either have to accept it

387
00:21:04,080 --> 00:21:05,880
Speaker 1: or you aren't even going to debate on the same

388
00:21:05,960 --> 00:21:08,600
Speaker 1: on the same playing field. With respect to this budget,

389
00:21:09,920 --> 00:21:12,000
Speaker 1: I assume it'll be a little bit more of a

390
00:21:12,040 --> 00:21:15,800
Speaker 1: he said. She said, I mean, I think the Republicans controls,

391
00:21:16,240 --> 00:21:19,479
Speaker 1: you know, the both chambers, so that they can they

392
00:21:19,520 --> 00:21:22,479
Speaker 1: can control what hearings are called. Um. I'm sure if

393
00:21:22,520 --> 00:21:24,520
Speaker 1: Democrats control one of the chambers, they would love to

394
00:21:24,560 --> 00:21:27,800
Speaker 1: have a hearing on what are realistic economic growth projections

395
00:21:28,240 --> 00:21:31,959
Speaker 1: given the the aging and less productive workforce. Um. But

396
00:21:32,040 --> 00:21:34,520
Speaker 1: that doesn't mean that the Democratic senators won't bring this

397
00:21:34,640 --> 00:21:37,920
Speaker 1: up during the during the hearings tomorrow and the House

398
00:21:37,920 --> 00:21:41,760
Speaker 1: Budget Committee, or the hearing tomorrow or the hearing Thursday

399
00:21:42,040 --> 00:21:44,919
Speaker 1: at the Center Budget Committee. UM. This is uh, this

400
00:21:45,000 --> 00:21:47,040
Speaker 1: has been something that people have been sort of zeroing

401
00:21:47,080 --> 00:21:50,200
Speaker 1: in on for a couple of days now in terms

402
00:21:50,200 --> 00:21:54,640
Speaker 1: of in terms of possible bones of contention with this budget,

403
00:21:55,040 --> 00:21:57,960
Speaker 1: and it is such a such a uh. You know,

404
00:21:58,040 --> 00:22:00,639
Speaker 1: there are some people the Committee for Responsive Subtle Budget

405
00:22:00,680 --> 00:22:03,080
Speaker 1: by Person group the other week said they thought, you know,

406
00:22:03,080 --> 00:22:05,400
Speaker 1: maybe you can get up to to two point one

407
00:22:05,480 --> 00:22:08,080
Speaker 1: two point two if you did some reform, but it

408
00:22:08,119 --> 00:22:10,280
Speaker 1: would be I think the phrase was quote pretty heroic

409
00:22:10,600 --> 00:22:13,159
Speaker 1: to get to three from the current one point eight

410
00:22:13,200 --> 00:22:17,280
Speaker 1: one point nine long term trend growth. Jonathan Nicholson, thank

411
00:22:17,280 --> 00:22:19,439
Speaker 1: you so much for joining us and bringing down what

412
00:22:19,480 --> 00:22:22,320
Speaker 1: we've just listened to. Jonathan Nicholson, as a senior reporter

413
00:22:22,440 --> 00:22:33,080
Speaker 1: at Bloomberg, we want to take a moment to let

414
00:22:33,119 --> 00:22:36,000
Speaker 1: you know about something new from Bloomberg. Starting right now,

415
00:22:36,040 --> 00:22:38,440
Speaker 1: you can use our io s app or our new

416
00:22:38,480 --> 00:22:42,200
Speaker 1: Google Chrome extension to scan any news story on any website,

417
00:22:42,440 --> 00:22:45,480
Speaker 1: instantly revealing relevant news and market data from Bloomberg and

418
00:22:45,600 --> 00:22:48,399
Speaker 1: other sources related to the companies and people you're reading about.

419
00:22:48,680 --> 00:22:50,640
Speaker 1: So no matter where you're reading the news, you can

420
00:22:50,640 --> 00:22:53,199
Speaker 1: bring the power of Bloomberg's news and data with you.

421
00:22:53,400 --> 00:22:56,480
Speaker 1: It's pretty amazing. Download our Io s app or search

422
00:22:56,520 --> 00:22:58,720
Speaker 1: for the Bloomberg extension on the Chrome Store to try

423
00:22:58,720 --> 00:23:11,280
Speaker 1: it out. Learn more at Blomberg dot com slash lens. Well,

424
00:23:11,280 --> 00:23:13,440
Speaker 1: it is my honor to bring in Chris Hewlett, who

425
00:23:13,480 --> 00:23:17,840
Speaker 1: is manager of US Drone Powered Solutions for Price Waterhouse Coopers,

426
00:23:17,880 --> 00:23:20,720
Speaker 1: which is based in Washington, d C. Also a former

427
00:23:21,040 --> 00:23:24,040
Speaker 1: Navy pilot for twenty one years, and he joins us

428
00:23:24,040 --> 00:23:26,080
Speaker 1: now to talk about a very hot topic when it

429
00:23:26,119 --> 00:23:28,600
Speaker 1: comes to all things delivery, which is drones and this

430
00:23:28,680 --> 00:23:30,479
Speaker 1: sort of dream that a lot of people have. One

431
00:23:30,520 --> 00:23:32,600
Speaker 1: day we will look up in the skies and we

432
00:23:32,640 --> 00:23:35,920
Speaker 1: will just see an army of drones dropping packages at

433
00:23:35,920 --> 00:23:40,359
Speaker 1: our footsteps and delivering everything on demand. So Chris, thanks

434
00:23:40,359 --> 00:23:41,720
Speaker 1: so much for joining us. I'd love to get your

435
00:23:41,760 --> 00:23:46,359
Speaker 1: take first as we talk about this transition or adaptation

436
00:23:46,640 --> 00:23:49,719
Speaker 1: of mail in a digital era, how much do drones

437
00:23:49,760 --> 00:23:52,040
Speaker 1: really play into that at this point? Right? Thanks Lisa

438
00:23:52,160 --> 00:23:54,960
Speaker 1: for having me here today. And it's an interesting conversation

439
00:23:55,080 --> 00:23:58,240
Speaker 1: because right now the drone addressable drone market, which we

440
00:23:58,240 --> 00:24:01,600
Speaker 1: talked about a hundred and twenty seven billion dollars for

441
00:24:01,680 --> 00:24:05,520
Speaker 1: drone applications, and what part of that is the delivery piece?

442
00:24:06,000 --> 00:24:08,320
Speaker 1: And you take a look at last mile deliveries which

443
00:24:08,359 --> 00:24:11,439
Speaker 1: a lot of people are doing experimentation with, and really

444
00:24:11,520 --> 00:24:16,359
Speaker 1: it gets down to an addressable market. So before before

445
00:24:16,359 --> 00:24:19,880
Speaker 1: you go on to UH drone application, could you give

446
00:24:19,920 --> 00:24:24,520
Speaker 1: us a sense of what that means? Okay, so drone application, UM,

447
00:24:24,560 --> 00:24:28,159
Speaker 1: it's famously quoted. UM. There are companies out there that

448
00:24:28,320 --> 00:24:32,520
Speaker 1: state that their package deliveries of them weigh less than

449
00:24:32,560 --> 00:24:36,320
Speaker 1: five pounds, So less than five pounds is easily addressable

450
00:24:36,320 --> 00:24:39,240
Speaker 1: with a drone UM. And then there's other companies that

451
00:24:39,520 --> 00:24:43,480
Speaker 1: are large retail chains that UH speak about the statistics

452
00:24:43,520 --> 00:24:47,280
Speaker 1: that of Americans alone live within five miles of a

453
00:24:47,320 --> 00:24:51,239
Speaker 1: large retail outlet. So now you're talking about an addressable market, right,

454
00:24:51,280 --> 00:24:56,240
Speaker 1: So an application, so a five pound package being delivered

455
00:24:56,280 --> 00:25:00,359
Speaker 1: from a large retail chain to a home within five aisles.

456
00:25:00,760 --> 00:25:04,880
Speaker 1: That's an addressable market UM. But where those applications could

457
00:25:04,920 --> 00:25:09,080
Speaker 1: be implemented. It really comes down to an implementation strategy,

458
00:25:09,680 --> 00:25:11,879
Speaker 1: and I think what we have to do in this

459
00:25:12,040 --> 00:25:17,879
Speaker 1: country specifically is addressed three key issues. Uh. Safety. First,

460
00:25:18,280 --> 00:25:21,240
Speaker 1: obviously there has to be going in and take people

461
00:25:21,240 --> 00:25:25,119
Speaker 1: correct if if it's not a safe application, then obviously

462
00:25:25,680 --> 00:25:27,840
Speaker 1: there's gonna be some federal issues with that and people

463
00:25:27,880 --> 00:25:32,879
Speaker 1: will take social safety. The second thing has to be

464
00:25:32,960 --> 00:25:37,280
Speaker 1: consumer confidence, right because not not uncommon now. Think about

465
00:25:37,320 --> 00:25:39,000
Speaker 1: the way things used to be back in the day

466
00:25:39,000 --> 00:25:41,160
Speaker 1: when you could open up a catalog and you could

467
00:25:41,280 --> 00:25:45,320
Speaker 1: order something that that risk was all on the can

468
00:25:45,480 --> 00:25:49,159
Speaker 1: the delivery mechanism because it was all cash on delivery, right,

469
00:25:49,200 --> 00:25:51,080
Speaker 1: So you order something out of a catalog on the

470
00:25:51,080 --> 00:25:54,119
Speaker 1: phone and it showed up and you paid for it

471
00:25:54,160 --> 00:25:55,800
Speaker 1: on the spot, and if you didn't have the cash

472
00:25:55,800 --> 00:25:58,160
Speaker 1: to pay for it, it was brought back home. That's

473
00:25:58,200 --> 00:26:02,359
Speaker 1: not the case now, so all of the UM risk

474
00:26:02,840 --> 00:26:06,560
Speaker 1: is on the consumer now to pay for something online

475
00:26:07,320 --> 00:26:11,720
Speaker 1: and have it delivered to your house. So that has

476
00:26:11,760 --> 00:26:14,640
Speaker 1: to be an addressable issue. Because if we can't give

477
00:26:14,680 --> 00:26:18,720
Speaker 1: the consumer confidence that the package in question that costs

478
00:26:18,720 --> 00:26:22,119
Speaker 1: fifty hundred dollars a thousand dollars is going to arrive

479
00:26:23,160 --> 00:26:25,720
Speaker 1: without any kind of damage or on time. Well, but

480
00:26:25,800 --> 00:26:27,720
Speaker 1: you know, I've got to be honest, I'm actually surprised

481
00:26:27,760 --> 00:26:30,480
Speaker 1: that we don't see any drones delivering anything. I mean, honestly,

482
00:26:30,480 --> 00:26:32,560
Speaker 1: there's there. And not only do we not see any drones,

483
00:26:32,640 --> 00:26:35,560
Speaker 1: but there has been such controversy over testing. There's you know,

484
00:26:35,760 --> 00:26:39,280
Speaker 1: even having you know, potential test runs. So you know,

485
00:26:39,400 --> 00:26:41,520
Speaker 1: how realistic is it that this will play any kind

486
00:26:41,560 --> 00:26:45,000
Speaker 1: of meaningful part in the delivery of packages any time

487
00:26:45,000 --> 00:26:47,160
Speaker 1: in the near future. Sure. The great news is that

488
00:26:47,520 --> 00:26:50,000
Speaker 1: there are federal agencies that are working on what's called

489
00:26:50,000 --> 00:26:54,720
Speaker 1: the Unmanned Aerial System Transportation Management System u t M

490
00:26:55,359 --> 00:26:57,439
Speaker 1: UH and that's going through testing phases right now. And

491
00:26:57,480 --> 00:27:00,520
Speaker 1: the the idea behind u t M is to provide

492
00:27:01,000 --> 00:27:05,400
Speaker 1: oversight from air traffic control perspective on where commercial applications

493
00:27:05,400 --> 00:27:08,080
Speaker 1: are being utilized of drones. I think the fact the

494
00:27:08,160 --> 00:27:12,960
Speaker 1: fastest way forward for delivery mechanisms is actually in a

495
00:27:13,080 --> 00:27:17,919
Speaker 1: rural area where it's less congested. Um. Ironically, this mirror

496
00:27:17,960 --> 00:27:19,840
Speaker 1: is kind of what we're seeing on a global perspective

497
00:27:20,400 --> 00:27:24,240
Speaker 1: from drone delivery mechanisms in third world countries which are

498
00:27:24,280 --> 00:27:28,320
Speaker 1: finding the fastest proliferation of drone deliveries because of UM

499
00:27:28,359 --> 00:27:32,840
Speaker 1: the need to get UM UH medicine, food, water, things

500
00:27:32,880 --> 00:27:38,320
Speaker 1: to areas. So Tanzania UM it would be an example

501
00:27:38,440 --> 00:27:43,200
Speaker 1: of utilization of drone strategies to get UM needed medicine

502
00:27:43,240 --> 00:27:46,720
Speaker 1: to remote areas in a faster fashion. UH. And it's

503
00:27:46,760 --> 00:27:52,600
Speaker 1: because there's no federal restrictions. So who's running those operations? Well,

504
00:27:52,680 --> 00:27:55,520
Speaker 1: those are all being done in partnership with various different

505
00:27:55,760 --> 00:27:59,680
Speaker 1: governments and foreign entities that are working on drone UH

506
00:28:00,000 --> 00:28:02,720
Speaker 1: implementation strategies. And you also talk about a hundred twenty

507
00:28:02,720 --> 00:28:06,639
Speaker 1: seven billion dollars of business that could be involving drones

508
00:28:06,680 --> 00:28:09,879
Speaker 1: in some level by and I have to wonder that

509
00:28:09,960 --> 00:28:13,399
Speaker 1: can't all be shipping us. What are sort of the

510
00:28:13,440 --> 00:28:20,399
Speaker 1: majority of infrastructure monitoring so UM telecommunications and power distribution

511
00:28:20,480 --> 00:28:24,480
Speaker 1: networks that need constant operations and maintenance have a heavy

512
00:28:24,520 --> 00:28:28,400
Speaker 1: overhead with doing traditional rotor wing inspections UH. And there's

513
00:28:28,400 --> 00:28:32,040
Speaker 1: a significant amount of danger associated with climbing up a

514
00:28:32,080 --> 00:28:34,840
Speaker 1: cell tower to do an inspection. UH. And if you

515
00:28:34,840 --> 00:28:38,200
Speaker 1: think about the thousands of assets that exists within just

516
00:28:38,440 --> 00:28:41,320
Speaker 1: one small entity of a country, all of them need

517
00:28:41,360 --> 00:28:45,720
Speaker 1: to be inspected on a regular basis for UM vegetation, encroachment,

518
00:28:46,240 --> 00:28:49,520
Speaker 1: UM birds, nesting. These are all things that cause your

519
00:28:49,600 --> 00:28:53,560
Speaker 1: broadband to go down on your system that you know,

520
00:28:53,800 --> 00:28:56,120
Speaker 1: yeah right, and so as a consumer, you want that

521
00:28:56,160 --> 00:28:57,880
Speaker 1: to be taken care of. So the companies have to

522
00:28:57,880 --> 00:29:01,640
Speaker 1: do operations and maintenance. UH gain a tremendous boost in

523
00:29:01,680 --> 00:29:04,760
Speaker 1: return on investment for using drone strategies. Chris, real quick.

524
00:29:04,960 --> 00:29:08,680
Speaker 1: What companies stand up benefit the most as drones are

525
00:29:08,720 --> 00:29:12,520
Speaker 1: adopted in a more accelerating manner. I think the power

526
00:29:12,600 --> 00:29:16,960
Speaker 1: distribution oil and gas have the biggest benefit because you

527
00:29:17,000 --> 00:29:19,920
Speaker 1: can use drones in a long haul environment where you're

528
00:29:19,920 --> 00:29:24,680
Speaker 1: taking a look at distribution networks for areas like UH

529
00:29:25,000 --> 00:29:28,040
Speaker 1: that have rolling blackouts that you could reduce blackouts. You're

530
00:29:28,040 --> 00:29:29,640
Speaker 1: gonna get the biggest bank for the buck as far

531
00:29:29,680 --> 00:29:32,280
Speaker 1: as customer satisfaction at that point. Chris Hewlett, thank you

532
00:29:32,320 --> 00:29:35,120
Speaker 1: so much for joining us here at the National Postal

533
00:29:35,200 --> 00:29:38,560
Speaker 1: Forum in Maryland. Chris Hewlett as manager of US Drone

534
00:29:38,720 --> 00:29:42,400
Speaker 1: Powered Solutions at Price Waterhouse Cooper's in Washington, d C. Also,

535
00:29:42,480 --> 00:29:44,840
Speaker 1: he was at twenty one year veteran of the Navy,

536
00:29:45,280 --> 00:29:47,520
Speaker 1: flying around getting a lot of experience, so this does

537
00:29:47,560 --> 00:29:50,040
Speaker 1: not mystify him unlike some of the rest of us.

538
00:30:00,680 --> 00:30:04,240
Speaker 1: We are here in Baltimore at the National Postal Forum,

539
00:30:04,240 --> 00:30:06,800
Speaker 1: which is a partner of the United States Postal Service,

540
00:30:06,840 --> 00:30:11,920
Speaker 1: and we're talking about how to transform the concept of mail, physical,

541
00:30:12,000 --> 00:30:15,880
Speaker 1: tangible on the ground mail in an era that's increasingly

542
00:30:15,920 --> 00:30:19,760
Speaker 1: focused on your smartphone and on your tablet. And who

543
00:30:19,920 --> 00:30:22,400
Speaker 1: better to do that for us to understand kind of

544
00:30:22,440 --> 00:30:25,720
Speaker 1: this connection and this evolution is Prita Mara. She's vice

545
00:30:25,760 --> 00:30:29,720
Speaker 1: president of Mail Entry and Payment Technology at USPS and

546
00:30:29,760 --> 00:30:32,320
Speaker 1: she joins us here now in Baltimore at the conference.

547
00:30:32,360 --> 00:30:34,800
Speaker 1: Thank you so much for joining us, Pritha. So, what

548
00:30:35,120 --> 00:30:37,920
Speaker 1: is sort of the forefront right now the way that

549
00:30:38,160 --> 00:30:40,760
Speaker 1: the United States Postal Services trying to make it more

550
00:30:40,880 --> 00:30:43,240
Speaker 1: sort of amenable to the digital era. Where are the

551
00:30:43,800 --> 00:30:47,520
Speaker 1: frontiers if you will, Well, imagine if you could carry

552
00:30:47,640 --> 00:30:51,680
Speaker 1: your collection box with you everywhere you go, your mailbox.

553
00:30:52,000 --> 00:30:56,040
Speaker 1: That's what we're doing. We're putting your mailbox into your phone,

554
00:30:56,160 --> 00:30:59,680
Speaker 1: into your email, so that you can actually sign up.

555
00:31:00,080 --> 00:31:02,480
Speaker 1: For those that haven't, I'm going to encourage you to

556
00:31:02,560 --> 00:31:06,640
Speaker 1: sign up to our informed delivery platform. It's fantastic. So

557
00:31:06,840 --> 00:31:10,240
Speaker 1: you see picture images of every mail piece that's coming

558
00:31:10,320 --> 00:31:14,560
Speaker 1: to your mailbox. Boy, are we bringing that mail piece alive? Okay,

559
00:31:14,560 --> 00:31:16,200
Speaker 1: hold on one second. So this means that you can

560
00:31:16,240 --> 00:31:19,680
Speaker 1: see the actual uh items of mail that would be

561
00:31:19,720 --> 00:31:22,520
Speaker 1: in your mailbox. Can you digitally open them? I mean,

562
00:31:22,640 --> 00:31:24,320
Speaker 1: is it something where you basically are getting all of

563
00:31:24,360 --> 00:31:26,720
Speaker 1: your mail digitally or you just can sort of take

564
00:31:26,760 --> 00:31:29,280
Speaker 1: inventory of what you have and take stock and well,

565
00:31:29,440 --> 00:31:31,720
Speaker 1: there's a lot going on with that. So you can

566
00:31:31,760 --> 00:31:34,840
Speaker 1: see the picture of the of the mail piece, and

567
00:31:34,880 --> 00:31:39,600
Speaker 1: then advertisers can and can attach a ride along coupon

568
00:31:39,840 --> 00:31:43,360
Speaker 1: or an image they can attach U r L so

569
00:31:43,440 --> 00:31:45,320
Speaker 1: that you know, when you see this image, you can

570
00:31:45,320 --> 00:31:48,400
Speaker 1: click through and you could go into an entire entirely

571
00:31:48,440 --> 00:31:52,800
Speaker 1: new experience. So it's essentially bringing mail alive. It's got

572
00:31:52,840 --> 00:31:55,960
Speaker 1: a huge personality with every mail piece. You can click

573
00:31:56,040 --> 00:31:58,840
Speaker 1: and you can be rendered into a whole new experience.

574
00:31:59,000 --> 00:32:01,920
Speaker 1: So I'm trying to think because Paul Sweeney of Bloomberg

575
00:32:01,920 --> 00:32:04,160
Speaker 1: Intelligence was on earlier and he was talking about how

576
00:32:04,800 --> 00:32:09,000
Speaker 1: an increasing number of direct mailers are trying to use

577
00:32:09,160 --> 00:32:14,400
Speaker 1: online information to then better target people with physical pieces

578
00:32:14,440 --> 00:32:17,440
Speaker 1: of mail, and yet this seems to be a way

579
00:32:17,480 --> 00:32:21,719
Speaker 1: that people could potentially bypass the physical sort of direct

580
00:32:21,800 --> 00:32:24,000
Speaker 1: mailings and sort of attached coupons and other things. I'm

581
00:32:24,040 --> 00:32:26,120
Speaker 1: just confused sort of how how to be the most

582
00:32:26,160 --> 00:32:30,560
Speaker 1: effective for this absolutely not so, yeah, you got it

583
00:32:30,560 --> 00:32:35,200
Speaker 1: all wrong. So let me tell you know what it is.

584
00:32:35,000 --> 00:32:38,160
Speaker 1: This is what we're doing is we're creating multiple of impressions.

585
00:32:38,640 --> 00:32:41,320
Speaker 1: So think about it. We've got a pretty we've got

586
00:32:41,360 --> 00:32:44,400
Speaker 1: a boatload of social media clutter today, right, and so

587
00:32:45,040 --> 00:32:49,000
Speaker 1: mail stands out. So what this does is you get

588
00:32:49,040 --> 00:32:52,240
Speaker 1: this mail piece, you keep them, You keep the mail

589
00:32:52,280 --> 00:32:55,800
Speaker 1: piece with you. You you then perhaps you've got an

590
00:32:55,800 --> 00:32:59,280
Speaker 1: augmented reality going on on that mail piece. You can then,

591
00:32:59,640 --> 00:33:02,760
Speaker 1: you know, shine your phone on it and you can

592
00:33:02,800 --> 00:33:07,000
Speaker 1: be rendered another experience with informed delivery. You're getting an

593
00:33:07,040 --> 00:33:09,520
Speaker 1: image of your mail piece, so you know, hey, there's

594
00:33:09,560 --> 00:33:13,320
Speaker 1: something really important in my mailbox. I gotta go get it. Um.

595
00:33:13,360 --> 00:33:16,880
Speaker 1: You can also then click into that image and think

596
00:33:16,960 --> 00:33:19,680
Speaker 1: about the world of advertisers, and they can link that

597
00:33:19,840 --> 00:33:24,400
Speaker 1: physical catalog with multiple experiences, So you're going to have

598
00:33:24,520 --> 00:33:31,400
Speaker 1: multiple expressions, impressions, expressions, and multiple experiences. So how how

599
00:33:31,480 --> 00:33:34,080
Speaker 1: soon is this being rolled out or is it already happening? Oh,

600
00:33:34,120 --> 00:33:36,719
Speaker 1: it's it's all rolled out. And if you haven't signed up,

601
00:33:36,760 --> 00:33:40,760
Speaker 1: you're missing the boat there. So I'm gonna tell you

602
00:33:40,760 --> 00:33:44,480
Speaker 1: you are you're you're alright. You can sign up now.

603
00:33:44,560 --> 00:33:47,720
Speaker 1: Advertisers can start using it, and we've got some huge

604
00:33:47,760 --> 00:33:51,760
Speaker 1: success stories. Let me tell you about some open rates. Okay,

605
00:33:52,080 --> 00:33:57,000
Speaker 1: email open rates are over seventy We're getting response rates

606
00:33:57,000 --> 00:34:00,000
Speaker 1: in the high seven eight nine percent. Where's the biggest

607
00:34:00,080 --> 00:34:04,400
Speaker 1: the adoption right now? It's retailers, It's it's it's no

608
00:34:04,520 --> 00:34:06,360
Speaker 1: I mean like locations in the US, I mean, is

609
00:34:06,360 --> 00:34:09,319
Speaker 1: it very specific geographically where people are sort of well

610
00:34:09,360 --> 00:34:11,759
Speaker 1: when when we rolled it out, we started in the

611
00:34:11,800 --> 00:34:14,600
Speaker 1: top metro area, so that of course, and so you know,

612
00:34:14,680 --> 00:34:17,520
Speaker 1: and we are getting consumers of signing up at an

613
00:34:17,600 --> 00:34:22,680
Speaker 1: alarming rate. We have over two million registered subscribers, so

614
00:34:22,760 --> 00:34:25,799
Speaker 1: those eyeballs are increasing every day. You know, we talk

615
00:34:25,840 --> 00:34:28,759
Speaker 1: a lot about how in the Amazon era, people are

616
00:34:28,800 --> 00:34:31,520
Speaker 1: shipping a lot more, uh, in order just to sort

617
00:34:31,520 --> 00:34:34,279
Speaker 1: of order things online. Bring it to their doorstep. But

618
00:34:34,320 --> 00:34:37,120
Speaker 1: what about personal letters? Because I feel like emails kind

619
00:34:37,120 --> 00:34:40,000
Speaker 1: of have overwhelmed that. Have you found that there is

620
00:34:40,000 --> 00:34:43,160
Speaker 1: something specially you're saying that there is something different or

621
00:34:43,200 --> 00:34:46,000
Speaker 1: you know, distinctive about getting a physical piece of mail. Uh,

622
00:34:46,040 --> 00:34:48,160
Speaker 1: you know, have you seen sort of the drop in

623
00:34:48,280 --> 00:34:51,400
Speaker 1: personal letters kind of stabilized and people going back to

624
00:34:51,440 --> 00:34:54,040
Speaker 1: that at all? Or I think we are seeing that

625
00:34:54,200 --> 00:34:58,280
Speaker 1: millennials believe it or not a loving mail, So people

626
00:34:58,400 --> 00:35:01,160
Speaker 1: are going back because they really lies the power of

627
00:35:01,200 --> 00:35:04,759
Speaker 1: that that mail piece. Because now that you've got all

628
00:35:04,840 --> 00:35:09,400
Speaker 1: this different communications, mail is just a different experience. You

629
00:35:09,520 --> 00:35:12,799
Speaker 1: go home, you access it when you want it. You're

630
00:35:12,840 --> 00:35:17,680
Speaker 1: not reading it amongst seventy other emails or Facebook or

631
00:35:17,719 --> 00:35:20,200
Speaker 1: this or that that you have to go through. You're

632
00:35:20,200 --> 00:35:23,239
Speaker 1: actually interacting with it at your own pace. So you

633
00:35:23,280 --> 00:35:27,000
Speaker 1: have a different relationship. You have a karma relationship. You

634
00:35:27,080 --> 00:35:29,920
Speaker 1: have a more sustaining relationship with that mail piece than

635
00:35:30,000 --> 00:35:32,520
Speaker 1: you do with all the social media. And I think

636
00:35:32,560 --> 00:35:37,239
Speaker 1: people are realizing the power of that that relationship. Thank

637
00:35:37,239 --> 00:35:39,280
Speaker 1: you so much for joining us. Sounds like an exciting

638
00:35:39,320 --> 00:35:43,120
Speaker 1: time and for being here in Baltimore. Pretamera. She is

639
00:35:43,160 --> 00:35:45,960
Speaker 1: the vice president of mail entry and payment technology for

640
00:35:46,080 --> 00:35:50,480
Speaker 1: the United States Postal Service, talking about different payment systems

641
00:35:50,480 --> 00:35:51,960
Speaker 1: that what she didn't get quite into that, but she

642
00:35:52,040 --> 00:35:56,360
Speaker 1: was talking about the digitization of what your mailbox looks

643
00:35:56,400 --> 00:35:59,160
Speaker 1: like and how you can check what's there, and the

644
00:35:59,200 --> 00:36:01,120
Speaker 1: possible opportunity is for markets as well. Thank you so

645
00:36:01,160 --> 00:36:05,279
Speaker 1: much for joining us, Thanks for listening to the Bloomberg

646
00:36:05,280 --> 00:36:07,960
Speaker 1: P and L podcast. You can subscribe and listen to

647
00:36:07,960 --> 00:36:12,520
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.

648
00:36:12,920 --> 00:36:16,480
Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm

649
00:36:16,520 --> 00:36:19,880
Speaker 1: on Twitter at Lisa abramoits one before the podcast. You

650
00:36:19,920 --> 00:36:22,480
Speaker 1: can always catch us worldwide on Bloomberg Radio