Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We
Speaker 1: are broadcasting live from Baltimore. We are at the National
Speaker 1: Postal Forum, which is a partner of the United States
Speaker 1: Postal Service. And I was looking at doing some research
Speaker 1: about the United States Postal Service, and I was surprised
Speaker 1: to find that if this were a private company last year,
Speaker 1: it would have been the thirty ninth biggest company in
Speaker 1: the Fortune five hundred corporations, which is impressive. And with
Speaker 1: us to give us a little bit of more perspective
Speaker 1: on both the company and the broader market for shipping
Speaker 1: and frankly, making mail relevant in an era where people
Speaker 1: are hooked to their phones, is Kristin Siever, chief Information
Speaker 1: Officer and executive vice president of the United States Postal Service,
Speaker 1: and she joins us uh here now, so you know, Kristin,
Speaker 1: one thing that we've been hearing a lot about is
Speaker 1: the importance to sort of transform, uh, the way people
Speaker 1: think about mail, the way that they track it, the
Speaker 1: way that they observe it and experience it. What do
Speaker 1: you think is going to be the biggest challenge in
Speaker 1: the year ahead as you sort of look out, try
Speaker 1: to make it modern but also catered to nostalgia and
Speaker 1: you know, also uh the amazonification of our world absolutely well,
Speaker 1: you know, I think one of our greatest challenges is
Speaker 1: going to be to keep pace. We've done a lot
Speaker 1: of work, as you'll see at the National Postal Forum,
Speaker 1: UH in building technologies and platforms to track mail, to
Speaker 1: provide value to mail UM. But our challenges to keep
Speaker 1: that mail relevant, to work with our customers to help
Speaker 1: them grow their businesses, and to work as every industry
Speaker 1: he has to do right now at an incredible pace
Speaker 1: to keep up and leverage these technologies to the best extent.
Speaker 1: How difficult is it? I was just looking at the
Speaker 1: US Post Services UH income statement recent income statement, UH,
Speaker 1: and there was a four hune seventy four million dollar
Speaker 1: year of your decline in the second quarter, and it
Speaker 1: was in large part due to having to pre fund
Speaker 1: seventy five years of retiree health benefits and how much
Speaker 1: of that is a pressure on being able to adapt
Speaker 1: to the changing environment. Yeah, the Postal Service faces significant
Speaker 1: pressure when it comes to our finances and and how
Speaker 1: we're run. And we really have three things that we're
Speaker 1: trying to focus on. The first is for the Postal
Speaker 1: Service to adapt quickly and to manage its operation. Uh,
Speaker 1: to react to declining volumes, but also to compete where
Speaker 1: volumes are increasing. Right, so that's quite a challenge. Are
Speaker 1: the two challenges are legislative and regulatory and uh, we
Speaker 1: have a positive bill that came out of committee for
Speaker 1: postal reform that's really important to us. What's the what's
Speaker 1: the substance of it. The substance of the Postal Reform
Speaker 1: bill is basically allows us to address our retiree health
Speaker 1: benefit There you go issue with integrating medicare, allows us
Speaker 1: to use postal service demographics instead of federal government demographics
Speaker 1: everythink about the postal Service. We have workers all over
Speaker 1: the United States in um varying income levels. It allows
Speaker 1: us to take back some of the exigent price increase,
Speaker 1: and it also gives us a little bit of flexibility
Speaker 1: for some new products and services. That we're excited about. Well, so,
Speaker 1: since we all talk about Amazon so much and Amazon
Speaker 1: is just decimating the entire retail sector. As what people
Speaker 1: have been saying, Um, do you find that the US
Speaker 1: Postal Service is able to keep up from a technological
Speaker 1: point of view and being able to deliver all of
Speaker 1: the boxes? And can you give us a sense of
Speaker 1: how much the just sheer volume of packages has increased
Speaker 1: over the past few years. Yeah, we've had double digit
Speaker 1: increase in package volume year over year for the last
Speaker 1: three years. But the thing that's been great about the
Speaker 1: postal services that we have the delivery muscle deflects that
Speaker 1: we go to every house, we go to every business,
Speaker 1: and it's really been an opportunity for us to showcase
Speaker 1: our strength what we've been doing for over two forty years.
Speaker 1: But aren't there a lot more competitors because people are
Speaker 1: looking and saying, wow, this is the future, right, this
Speaker 1: is the reality is that you're gonna be able to
Speaker 1: order something, pick something up, and then it's going to
Speaker 1: come to your home. And so they're going to be
Speaker 1: some probably shippers and delivery companies they're gonna try to compete. Absolutely. Um,
Speaker 1: So one of the advantages we have is we've already
Speaker 1: built out our network UH, and we leverage that network.
Speaker 1: The other thing is, even with competition, which is fierce,
Speaker 1: but we still deliver more e commerce packages than any
Speaker 1: of the provider in the country. UH. And we will
Speaker 1: continue to leverage our brand, our trusted presence, and everybody's
Speaker 1: business and community UH to compete and to win for
Speaker 1: that package delivery. We were talking earlier about drones. Are
Speaker 1: those on your radar? They have to as this chief
Speaker 1: information officer, absolutely and I get that question a lot. Okay, So,
Speaker 1: so how do you for see drones playing into the
Speaker 1: United States Postal Services business plan in the near future. Well,
Speaker 1: I think for us, what's important is we have many
Speaker 1: use cases for delivery. Right. We deliver in urban areas,
Speaker 1: we deliver in rural areas. We deliver in the Grand Canyon.
Speaker 1: So maybe there's maybe the dropdown packages into the into
Speaker 1: the Colorado River go down and we've had delivery on
Speaker 1: burrows into the Grand Canyons. That might be a possible
Speaker 1: use case of drone delivery for the Postal Service. Right.
Speaker 1: There are some places that are hard to get to UH,
Speaker 1: and we definitely foresee um uses like that but we
Speaker 1: can also use it to survey our own infrastructure. There's
Speaker 1: many different use cases. So what we're doing is staying
Speaker 1: in touch with the technology, staying in touch with the
Speaker 1: regulations UH, and really scrubbing our use cases to see
Speaker 1: where our best UH fit's gonna be. You know, we've
Speaker 1: talked about how German postals, the German Postal Service in
Speaker 1: particular has looked at autonomous driving vehicles to help reduce
Speaker 1: costs and increase the delivery predictability. Has that been on
Speaker 1: your radar at all? Absolutely? We we have some efforts
Speaker 1: with autonomous working with academic institutions UH as far as
Speaker 1: what would be the use case, how would we use
Speaker 1: it in the postal service UM? For us, you know,
Speaker 1: one of the things is we have such a significantly
Speaker 1: large fleet, so over two hundred and seventy thousand vehicles,
Speaker 1: so that have to be driven and maintained throughout throughout
Speaker 1: the country to deliver the mail every day, and now
Speaker 1: we deliver seven days a week. So we definitely foresee
Speaker 1: that we'll have use cases for autonomous vehicles, whether it's
Speaker 1: in actual delivery or we're also a huge logistics provider.
Speaker 1: We have to get the mail from across the country.
Speaker 1: So what how is much? How much has the ratio
Speaker 1: between UH letters and packages changed? I imagine that once
Speaker 1: upon a time there are more letters and fewer packages,
Speaker 1: and now it has reversed. Right, It hasn't fully reversed.
Speaker 1: Oh No, letters are still the predominant product that we have.
Speaker 1: But basically as letters are declining, packages are increa using.
Speaker 1: So we haven't crossed that great divide of where total
Speaker 1: letter volume is less than packages. But you know, the
Speaker 1: decline and letter volume is concerning UM and that's why
Speaker 1: we have to compete for the package business and and
Speaker 1: continue to deliver for the American public. What's going to
Speaker 1: be the number one technological advancement in the next year
Speaker 1: for USPS. I think the number one advancement that will
Speaker 1: be able to leverage is our advanced analytics platform UH
Speaker 1: to continue to provide value to the mail but also
Speaker 1: to find ways to enhance our own business UH and
Speaker 1: to find those opportunities that might allow us to reduce costs,
Speaker 1: might allow us to produce new products. We put a
Speaker 1: lot of investment into that over the last three years,
Speaker 1: and now that's finally coming to fruition. Kind of what
Speaker 1: we talked about before about being able to UH with
Speaker 1: preeminent amera, talking about how people can look and scan
Speaker 1: and see what's in their mailboxes without actually being there
Speaker 1: and possibly even use some of the UH advertisement flaws delivery.
Speaker 1: Today this year at the National Postal Forum, we have
Speaker 1: two major platforms that were leveraging and formed delivery and
Speaker 1: informed visibility, and they really go hand in hand. So
Speaker 1: Informed Delivery is exciting because every consumer has access to
Speaker 1: it and can sign up and and you know tomorrow
Speaker 1: be looking at those images of their mail. Thank you
Speaker 1: so much for joining us, Kristin sever It was really
Speaker 1: a pleasure to speak with you. Christin Siever is chief
Speaker 1: Information Officer and executive a vice president of the United
Speaker 1: States Postal Service here in Baltimore, Maryland, where we are
Speaker 1: broadcasting live from the National Postal for Forum right now, however,
Speaker 1: I want to bring in Jonathan Nicholson, senior reporter at
Speaker 1: Bloomberg b n A, to give us some perspective on
Speaker 1: what we've gleaned so far from President Trump's hoped budget
Speaker 1: anyway UH, and how likely it is that he is
Speaker 1: going to get through some of what he wants. Jonathan,
Speaker 1: Thank you so much for joining us Jonathan, Uh, what
Speaker 1: have we gleaned so far about what President Trump would
Speaker 1: like to see in the budget. Well, he goes through
Speaker 1: a lot of One could argue sort of fiscal gymnastics
Speaker 1: to try and um sort of square the circle of
Speaker 1: of doing tax reform, increasing defense, UM, but also trying
Speaker 1: to get to something close to balance by the end
Speaker 1: of ten years, which has been a long term Republican
Speaker 1: budget goal for a long time. So when doing so,
Speaker 1: basically they rely on some economic growth projections that people
Speaker 1: have some questions about, and they rely on some some
Speaker 1: deep cuts in both the non defensivescretionary and some mandatory
Speaker 1: entitlement spending programs. So I'll just go through some of
Speaker 1: the headlines that I've been looking at. Some of the information.
Speaker 1: People have said that it would hit uh, you know,
Speaker 1: all of the welfare and sort of entitlement programs other
Speaker 1: than Medicaid, for example. It would strip away a lot
Speaker 1: more there. It would make it tougher to at some
Speaker 1: of the tax breaks for lower income individuals. It would
Speaker 1: remove uh, money for some of the offices that have
Speaker 1: been expanded under under a former President Obama in favor
Speaker 1: of bolstering defense. Right, I mean is that basically the gist.
Speaker 1: I mean, what are sort of the areas that you
Speaker 1: think are going to stick and have staying power through
Speaker 1: all of the congressional negotiations that are inevitable. Well, it's
Speaker 1: it's actually kind of tough to see exactly, um, how
Speaker 1: much will stick and what specifically will stick. Um. Congressional
Speaker 1: Republicans are actually in many cases being very publicly neutral
Speaker 1: uh and privately, um, not very accepting of this, um
Speaker 1: real appropriate. Well, because you know, it's one thing to
Speaker 1: say that you want to balance the budget and so on,
Speaker 1: it's quite another one actually comes to actually to put
Speaker 1: the the you know, where the rubber beats the road. Um.
Speaker 1: And so one of the things that's basically just had
Speaker 1: the House chairman of the Appropriations Committee, the Freelinghouse and
Speaker 1: put out a very neutral, uh, neither for it nor
Speaker 1: against it kind of statement just a couple of minutes ago.
Speaker 1: Or he said, yeah, our job is appropriators is to
Speaker 1: exercise the power of the purse, which is not really
Speaker 1: that newsy because that is their job, all right. So
Speaker 1: it's basically a nonstatement. He doesn't really want to comment
Speaker 1: on it one way or another. Can we get a
Speaker 1: sense of history here with what past presidents have done
Speaker 1: when they've released their budgets or their proposed budgets. How
Speaker 1: much support do they generally get in advance from either
Speaker 1: congressmen of their same party or reach across the aisle.
Speaker 1: I mean, usually is their leg work that's done ahead
Speaker 1: of time or is this always the opening salvo? It's
Speaker 1: it's certainly an opening salvo. I mean, you know, there's
Speaker 1: the running joke, it's it's almost clichete even joke about it. Now,
Speaker 1: is that no matter what the party mixes of who
Speaker 1: holds the who holds the Congress, who holds the White House,
Speaker 1: that when the president sends up a budget, someone will
Speaker 1: always say, quote, it's dead on arrival, um. And that
Speaker 1: is the case with this one. The interesting thing here
Speaker 1: is that this is the first year budget that has
Speaker 1: taken this long to send it up UM, and it
Speaker 1: still is lacking the details of the tax reform proposal
Speaker 1: that they want to get to agreement on with the
Speaker 1: House and Senate Republicans. UM. And yet it's still is
Speaker 1: this's got this very The appropriators don't like the cuts
Speaker 1: to discretionary spending, The moderates don't like the cuts to
Speaker 1: some of the some of the entitlements, some of the
Speaker 1: some of the social net programs. UM. So it's kind
Speaker 1: of interesting that usually if you do have a budget
Speaker 1: that has some degree of momentum to it, it usually
Speaker 1: is the president's first year budget. And in that sense,
Speaker 1: what we're seeing here today, particularly even with Trump even
Speaker 1: out of out of the country, while this budget is
Speaker 1: being dropped, is not nearly I think historically what we
Speaker 1: usually see, um in terms of first year budget reaction.
Speaker 1: You know, it's funny that you mentioned that he's President
Speaker 1: Trump is at of the country, because that was my
Speaker 1: first comment to why is he doing it now while
Speaker 1: he's not here, to kind of do the rounds with
Speaker 1: it and give people an explanation of why he's so
Speaker 1: behind this particular plan, especially if people are coming out
Speaker 1: with pretty neutral expressions of you know, how they assess it.
Speaker 1: I mean, is that typical you're kind of implying, not
Speaker 1: so much. And if it's not typical, was this planned
Speaker 1: this way or did it just sort of happen this way? Well,
Speaker 1: he was They picked this budget release date maybe about
Speaker 1: two weeks ago or so. I think by then they
Speaker 1: probably already had I would suspect at least they already
Speaker 1: had the dates locked in for the international trip that
Speaker 1: he that he's on now. UM. I do not recall
Speaker 1: the last time a president was out of the country
Speaker 1: when his budget dropped. But I also haven't checked, so
Speaker 1: I wouldn't necessarily read too much in that. But you're right.
Speaker 1: Usually it is the day when the president says, you know,
Speaker 1: here's what we stand for fiscal fiscal policy wise. UM.
Speaker 1: And today that burden is being basically borne by mc mulvaney,
Speaker 1: who is you know, as a as a cabinet member,
Speaker 1: as an MB person, but is not, you know, not
Speaker 1: the president. UM. So so can you give me a sense, Jonathan,
Speaker 1: of what the next steps are sort of how this
Speaker 1: will move and be potentially implemented if at all. Uh.
Speaker 1: There's sort of a two two things to watch for. Basically,
Speaker 1: the House in Senate budget committees will take this under adversement,
Speaker 1: you know, and take a look at it. They will
Speaker 1: do their own budget resolutions, UM probably in June. UM
Speaker 1: they have to do a budget resolution. If Republicans hope
Speaker 1: to propiscate teen, if the Provolicans hope to do tax
Speaker 1: reform with Republican only votes as they plan, UM is
Speaker 1: so so what you look with for that is whether
Speaker 1: or not they set up some reconciliation structions for tax
Speaker 1: reform and for some of these spending cuts that that
Speaker 1: Trump is wanting. That's one measure of how much of
Speaker 1: this one get actually potentially enacted into law. The other
Speaker 1: aspect of the appropriations processes, well, the appropriators marked to
Speaker 1: the one point zero six five trillion of appropriated dollars
Speaker 1: that are set up in this in this budget UM,
Speaker 1: and that seems to be a little bit closer to
Speaker 1: to being UM to happening. I think there's still a
Speaker 1: question of how they do the defense non defense mix,
Speaker 1: which they probably will not do UM as much of
Speaker 1: a mix toward defense as Trump as proposed. UM. Jonathan,
Speaker 1: I'm looking at a headline on the Bloomberg. Trump's three
Speaker 1: point six trillion dollar budget cuts hit his own supporters hard.
Speaker 1: In other words, the people who are going to be
Speaker 1: the worst benefited to the least benefited from his current
Speaker 1: proposal are some of the people who supported him the most.
Speaker 1: Can you explain how that is? Oh, well, there's a
Speaker 1: there's a lot of political reporting about how much of
Speaker 1: his support UM was in sort of UM hard scrabble economically, UM,
Speaker 1: tough areas West Virginia, Kentucky, so on. Uh. And in
Speaker 1: those areas, many of those many that's probing one, but
Speaker 1: a certain proportion are on say, social Security disability, which
Speaker 1: is one of the things that is proposed to be
Speaker 1: cut on this. Another is UM uh snap what used
Speaker 1: to be called food stamps. UM. So this certainly looks
Speaker 1: at those at those areas UM and and and to
Speaker 1: the extent that those are concentrated among rural rural supporters
Speaker 1: of of Trump, UH, it would indeed be certain fighting
Speaker 1: fighting hand they want to bring in back. Jonathan Nicholson,
Speaker 1: senior reporter at Bloomberg b NA, to give us a
Speaker 1: little bit of perspective, Jonathan, what stood out to you
Speaker 1: as sort of the most important thing uh that mcmulhenney
Speaker 1: just said. There were two things that struck me. UM.
Speaker 1: One is he's kind of picked the three percent growth
Speaker 1: rate as his hill to die on UM, which I
Speaker 1: think is going to be a tough sell when he
Speaker 1: appears before the Budget Committee is uh tomorrow in the
Speaker 1: day after UM. A lot of mainstream economists think that
Speaker 1: that's just not credible UM and uh. And so that's
Speaker 1: the fact he stucked his guns on that seems that's
Speaker 1: gonna be an issue. The other thing was he changed
Speaker 1: his wording on on Social Security to say social Security retirement. UM. Now,
Speaker 1: in the past couple of days and the previous and
Speaker 1: so on, they've been talking about they haven't they don't
Speaker 1: touch social Security. UM. But I think when they talk
Speaker 1: when they're doing the disability insurance, which is part of
Speaker 1: the Social Security program and has included when you hear
Speaker 1: those dates about win social Security goes bankrupt and so on,
Speaker 1: it's a separate trust fund that they put the old
Speaker 1: dates Survivors Trust Fund and the Disability Insurance Trust Fund
Speaker 1: together called social Security and say it goes bankrupting X
Speaker 1: y Z year or so on. UM. I think it's
Speaker 1: interesting that he sort of walked that back to say
Speaker 1: social Security retirement UM as seemingly a tacit acknowledgement of
Speaker 1: that criticism that they were trying to be evasive there.
Speaker 1: You know. I thought it was also interesting that the
Speaker 1: way that the Trump administration is going to measure the
Speaker 1: success of programs in the passion of programs is not
Speaker 1: how many people they serve, but by how many people
Speaker 1: get off of some of the entitlement programs. So that
Speaker 1: stand out to you or what does that actually mean
Speaker 1: to you? That's a longstanding um rhetorical point that a
Speaker 1: lot of a lot of anti spending Republicans have, basically
Speaker 1: that you can't measure the success of programs by the
Speaker 1: amount of money spent um. Now, there's usually a path
Speaker 1: for this, given for defense, because defense, as his budget
Speaker 1: has been about doubled over the last seventeen years or so. Um.
Speaker 1: But now the other aspect of that is that he
Speaker 1: has a point in the sense that CBO does assume
Speaker 1: that if inflation is three percent, then for a program
Speaker 1: to do the same thing next year, is it needs
Speaker 1: at least a three percent increase. So in that sense
Speaker 1: there are sort of inflation expectations ratcheted into the CBO
Speaker 1: nonpartisan baseline. You know, I thought that it was also uh,
Speaker 1: you know, I want to go back to the wall
Speaker 1: comments pick as people have said that there really hasn't
Speaker 1: been uh much money put aside to finance this program
Speaker 1: to build a wall between the United States and Mexico.
Speaker 1: People question, perhaps President Trump doesn't really mean a physical wall,
Speaker 1: but something that's a little bit more I'm a mix
Speaker 1: between more surveillance and uh and some physical building. But
Speaker 1: but Mitmilviny said, we are dead serious about the border wall,
Speaker 1: and this is one of his top three priorities. What
Speaker 1: is that? What does that signifying? Where? Where? Where is
Speaker 1: the money going to come from? Well, in the in
Speaker 1: the budget, say they did one point six billion for
Speaker 1: for the wall, at least sort of start getting started.
Speaker 1: I think the significance of that is that when when
Speaker 1: it comes time in September, everyone here on the Hill
Speaker 1: seems resigned to the idea already that we're looking at
Speaker 1: a continuing resolution come September to keep the government open.
Speaker 1: And so that will mean that again there will need
Speaker 1: to be democratic support for doing so. And so that's
Speaker 1: where you set up this question whether we're going to
Speaker 1: have a shutdown showdown, whether Trump will follow through and
Speaker 1: what he said a couple weeks ago about you know,
Speaker 1: a good shutdown, things like that, UM, and so in
Speaker 1: that debate, should that happen in September as people seem
Speaker 1: to expect. Um this question of wall funding, which was
Speaker 1: sort of sort of worked through and sort of elited
Speaker 1: or sort of you know, kind of danced around in
Speaker 1: flashed omnibus. UM. If that it truly is one of
Speaker 1: the top three priorities for the administration, then that could
Speaker 1: be a very big sticking point come September. That would
Speaker 1: be that races of flag there seems to me, Um,
Speaker 1: And just going back to what you were saying about
Speaker 1: the three growth rate, you're you flagged and rightly so
Speaker 1: that a lot of economist say it that is not probable.
Speaker 1: In the New York term. You have people including Harvard
Speaker 1: professor Larry Summers, coming out and saying that just does
Speaker 1: not seem, uh in the cards, given the fact that
Speaker 1: you do have an aging population and just generally slower
Speaker 1: growth around the world. Do you expect there to be
Speaker 1: hearings where we have economists coming in and sort of
Speaker 1: throwing cold water on that three percent rate? Or is
Speaker 1: this is this it? I mean it is this going
Speaker 1: to be basically, uh, you either have to accept it
Speaker 1: or you aren't even going to debate on the same
Speaker 1: on the same playing field. With respect to this budget,
Speaker 1: I assume it'll be a little bit more of a
Speaker 1: he said. She said, I mean, I think the Republicans controls,
Speaker 1: you know, the both chambers, so that they can they
Speaker 1: can control what hearings are called. Um. I'm sure if
Speaker 1: Democrats control one of the chambers, they would love to
Speaker 1: have a hearing on what are realistic economic growth projections
Speaker 1: given the the aging and less productive workforce. Um. But
Speaker 1: that doesn't mean that the Democratic senators won't bring this
Speaker 1: up during the during the hearings tomorrow and the House
Speaker 1: Budget Committee, or the hearing tomorrow or the hearing Thursday
Speaker 1: at the Center Budget Committee. UM. This is uh, this
Speaker 1: has been something that people have been sort of zeroing
Speaker 1: in on for a couple of days now in terms
Speaker 1: of in terms of possible bones of contention with this budget,
Speaker 1: and it is such a such a uh. You know,
Speaker 1: there are some people the Committee for Responsive Subtle Budget
Speaker 1: by Person group the other week said they thought, you know,
Speaker 1: maybe you can get up to to two point one
Speaker 1: two point two if you did some reform, but it
Speaker 1: would be I think the phrase was quote pretty heroic
Speaker 1: to get to three from the current one point eight
Speaker 1: one point nine long term trend growth. Jonathan Nicholson, thank
Speaker 1: you so much for joining us and bringing down what
Speaker 1: we've just listened to. Jonathan Nicholson, as a senior reporter
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Speaker 1: it out. Learn more at Blomberg dot com slash lens. Well,
Speaker 1: it is my honor to bring in Chris Hewlett, who
Speaker 1: is manager of US Drone Powered Solutions for Price Waterhouse Coopers,
Speaker 1: which is based in Washington, d C. Also a former
Speaker 1: Navy pilot for twenty one years, and he joins us
Speaker 1: now to talk about a very hot topic when it
Speaker 1: comes to all things delivery, which is drones and this
Speaker 1: sort of dream that a lot of people have. One
Speaker 1: day we will look up in the skies and we
Speaker 1: will just see an army of drones dropping packages at
Speaker 1: our footsteps and delivering everything on demand. So Chris, thanks
Speaker 1: so much for joining us. I'd love to get your
Speaker 1: take first as we talk about this transition or adaptation
Speaker 1: of mail in a digital era, how much do drones
Speaker 1: really play into that at this point? Right? Thanks Lisa
Speaker 1: for having me here today. And it's an interesting conversation
Speaker 1: because right now the drone addressable drone market, which we
Speaker 1: talked about a hundred and twenty seven billion dollars for
Speaker 1: drone applications, and what part of that is the delivery piece?
Speaker 1: And you take a look at last mile deliveries which
Speaker 1: a lot of people are doing experimentation with, and really
Speaker 1: it gets down to an addressable market. So before before
Speaker 1: you go on to UH drone application, could you give
Speaker 1: us a sense of what that means? Okay, so drone application, UM,
Speaker 1: it's famously quoted. UM. There are companies out there that
Speaker 1: state that their package deliveries of them weigh less than
Speaker 1: five pounds, So less than five pounds is easily addressable
Speaker 1: with a drone UM. And then there's other companies that
Speaker 1: are large retail chains that UH speak about the statistics
Speaker 1: that of Americans alone live within five miles of a
Speaker 1: large retail outlet. So now you're talking about an addressable market, right,
Speaker 1: So an application, so a five pound package being delivered
Speaker 1: from a large retail chain to a home within five aisles.
Speaker 1: That's an addressable market UM. But where those applications could
Speaker 1: be implemented. It really comes down to an implementation strategy,
Speaker 1: and I think what we have to do in this
Speaker 1: country specifically is addressed three key issues. Uh. Safety. First,
Speaker 1: obviously there has to be going in and take people
Speaker 1: correct if if it's not a safe application, then obviously
Speaker 1: there's gonna be some federal issues with that and people
Speaker 1: will take social safety. The second thing has to be
Speaker 1: consumer confidence, right because not not uncommon now. Think about
Speaker 1: the way things used to be back in the day
Speaker 1: when you could open up a catalog and you could
Speaker 1: order something that that risk was all on the can
Speaker 1: the delivery mechanism because it was all cash on delivery, right,
Speaker 1: So you order something out of a catalog on the
Speaker 1: phone and it showed up and you paid for it
Speaker 1: on the spot, and if you didn't have the cash
Speaker 1: to pay for it, it was brought back home. That's
Speaker 1: not the case now, so all of the UM risk
Speaker 1: is on the consumer now to pay for something online
Speaker 1: and have it delivered to your house. So that has
Speaker 1: to be an addressable issue. Because if we can't give
Speaker 1: the consumer confidence that the package in question that costs
Speaker 1: fifty hundred dollars a thousand dollars is going to arrive
Speaker 1: without any kind of damage or on time. Well, but
Speaker 1: you know, I've got to be honest, I'm actually surprised
Speaker 1: that we don't see any drones delivering anything. I mean, honestly,
Speaker 1: there's there. And not only do we not see any drones,
Speaker 1: but there has been such controversy over testing. There's you know,
Speaker 1: even having you know, potential test runs. So you know,
Speaker 1: how realistic is it that this will play any kind
Speaker 1: of meaningful part in the delivery of packages any time
Speaker 1: in the near future. Sure. The great news is that
Speaker 1: there are federal agencies that are working on what's called
Speaker 1: the Unmanned Aerial System Transportation Management System u t M
Speaker 1: UH and that's going through testing phases right now. And
Speaker 1: the the idea behind u t M is to provide
Speaker 1: oversight from air traffic control perspective on where commercial applications
Speaker 1: are being utilized of drones. I think the fact the
Speaker 1: fastest way forward for delivery mechanisms is actually in a
Speaker 1: rural area where it's less congested. Um. Ironically, this mirror
Speaker 1: is kind of what we're seeing on a global perspective
Speaker 1: from drone delivery mechanisms in third world countries which are
Speaker 1: finding the fastest proliferation of drone deliveries because of UM
Speaker 1: the need to get UM UH medicine, food, water, things
Speaker 1: to areas. So Tanzania UM it would be an example
Speaker 1: of utilization of drone strategies to get UM needed medicine
Speaker 1: to remote areas in a faster fashion. UH. And it's
Speaker 1: because there's no federal restrictions. So who's running those operations? Well,
Speaker 1: those are all being done in partnership with various different
Speaker 1: governments and foreign entities that are working on drone UH
Speaker 1: implementation strategies. And you also talk about a hundred twenty
Speaker 1: seven billion dollars of business that could be involving drones
Speaker 1: in some level by and I have to wonder that
Speaker 1: can't all be shipping us. What are sort of the
Speaker 1: majority of infrastructure monitoring so UM telecommunications and power distribution
Speaker 1: networks that need constant operations and maintenance have a heavy
Speaker 1: overhead with doing traditional rotor wing inspections UH. And there's
Speaker 1: a significant amount of danger associated with climbing up a
Speaker 1: cell tower to do an inspection. UH. And if you
Speaker 1: think about the thousands of assets that exists within just
Speaker 1: one small entity of a country, all of them need
Speaker 1: to be inspected on a regular basis for UM vegetation, encroachment,
Speaker 1: UM birds, nesting. These are all things that cause your
Speaker 1: broadband to go down on your system that you know,
Speaker 1: yeah right, and so as a consumer, you want that
Speaker 1: to be taken care of. So the companies have to
Speaker 1: do operations and maintenance. UH gain a tremendous boost in
Speaker 1: return on investment for using drone strategies. Chris, real quick.
Speaker 1: What companies stand up benefit the most as drones are
Speaker 1: adopted in a more accelerating manner. I think the power
Speaker 1: distribution oil and gas have the biggest benefit because you
Speaker 1: can use drones in a long haul environment where you're
Speaker 1: taking a look at distribution networks for areas like UH
Speaker 1: that have rolling blackouts that you could reduce blackouts. You're
Speaker 1: gonna get the biggest bank for the buck as far
Speaker 1: as customer satisfaction at that point. Chris Hewlett, thank you
Speaker 1: so much for joining us here at the National Postal
Speaker 1: Forum in Maryland. Chris Hewlett as manager of US Drone
Speaker 1: Powered Solutions at Price Waterhouse Cooper's in Washington, d C. Also,
Speaker 1: he was at twenty one year veteran of the Navy,
Speaker 1: flying around getting a lot of experience, so this does
Speaker 1: not mystify him unlike some of the rest of us.
Speaker 1: We are here in Baltimore at the National Postal Forum,
Speaker 1: which is a partner of the United States Postal Service,
Speaker 1: and we're talking about how to transform the concept of mail, physical,
Speaker 1: tangible on the ground mail in an era that's increasingly
Speaker 1: focused on your smartphone and on your tablet. And who
Speaker 1: better to do that for us to understand kind of
Speaker 1: this connection and this evolution is Prita Mara. She's vice
Speaker 1: president of Mail Entry and Payment Technology at USPS and
Speaker 1: she joins us here now in Baltimore at the conference.
Speaker 1: Thank you so much for joining us, Pritha. So, what
Speaker 1: is sort of the forefront right now the way that
Speaker 1: the United States Postal Services trying to make it more
Speaker 1: sort of amenable to the digital era. Where are the
Speaker 1: frontiers if you will, Well, imagine if you could carry
Speaker 1: your collection box with you everywhere you go, your mailbox.
Speaker 1: That's what we're doing. We're putting your mailbox into your phone,
Speaker 1: into your email, so that you can actually sign up.
Speaker 1: For those that haven't, I'm going to encourage you to
Speaker 1: sign up to our informed delivery platform. It's fantastic. So
Speaker 1: you see picture images of every mail piece that's coming
Speaker 1: to your mailbox. Boy, are we bringing that mail piece alive? Okay,
Speaker 1: hold on one second. So this means that you can
Speaker 1: see the actual uh items of mail that would be
Speaker 1: in your mailbox. Can you digitally open them? I mean,
Speaker 1: is it something where you basically are getting all of
Speaker 1: your mail digitally or you just can sort of take
Speaker 1: inventory of what you have and take stock and well,
Speaker 1: there's a lot going on with that. So you can
Speaker 1: see the picture of the of the mail piece, and
Speaker 1: then advertisers can and can attach a ride along coupon
Speaker 1: or an image they can attach U r L so
Speaker 1: that you know, when you see this image, you can
Speaker 1: click through and you could go into an entire entirely
Speaker 1: new experience. So it's essentially bringing mail alive. It's got
Speaker 1: a huge personality with every mail piece. You can click
Speaker 1: and you can be rendered into a whole new experience.
Speaker 1: So I'm trying to think because Paul Sweeney of Bloomberg
Speaker 1: Intelligence was on earlier and he was talking about how
Speaker 1: an increasing number of direct mailers are trying to use
Speaker 1: online information to then better target people with physical pieces
Speaker 1: of mail, and yet this seems to be a way
Speaker 1: that people could potentially bypass the physical sort of direct
Speaker 1: mailings and sort of attached coupons and other things. I'm
Speaker 1: just confused sort of how how to be the most
Speaker 1: effective for this absolutely not so, yeah, you got it
Speaker 1: all wrong. So let me tell you know what it is.
Speaker 1: This is what we're doing is we're creating multiple of impressions.
Speaker 1: So think about it. We've got a pretty we've got
Speaker 1: a boatload of social media clutter today, right, and so
Speaker 1: mail stands out. So what this does is you get
Speaker 1: this mail piece, you keep them, You keep the mail
Speaker 1: piece with you. You you then perhaps you've got an
Speaker 1: augmented reality going on on that mail piece. You can then,
Speaker 1: you know, shine your phone on it and you can
Speaker 1: be rendered another experience with informed delivery. You're getting an
Speaker 1: image of your mail piece, so you know, hey, there's
Speaker 1: something really important in my mailbox. I gotta go get it. Um.
Speaker 1: You can also then click into that image and think
Speaker 1: about the world of advertisers, and they can link that
Speaker 1: physical catalog with multiple experiences, So you're going to have
Speaker 1: multiple expressions, impressions, expressions, and multiple experiences. So how how
Speaker 1: soon is this being rolled out or is it already happening? Oh,
Speaker 1: it's it's all rolled out. And if you haven't signed up,
Speaker 1: you're missing the boat there. So I'm gonna tell you
Speaker 1: you are you're you're alright. You can sign up now.
Speaker 1: Advertisers can start using it, and we've got some huge
Speaker 1: success stories. Let me tell you about some open rates. Okay,
Speaker 1: email open rates are over seventy We're getting response rates
Speaker 1: in the high seven eight nine percent. Where's the biggest
Speaker 1: the adoption right now? It's retailers, It's it's it's no
Speaker 1: I mean like locations in the US, I mean, is
Speaker 1: it very specific geographically where people are sort of well
Speaker 1: when when we rolled it out, we started in the
Speaker 1: top metro area, so that of course, and so you know,
Speaker 1: and we are getting consumers of signing up at an
Speaker 1: alarming rate. We have over two million registered subscribers, so
Speaker 1: those eyeballs are increasing every day. You know, we talk
Speaker 1: a lot about how in the Amazon era, people are
Speaker 1: shipping a lot more, uh, in order just to sort
Speaker 1: of order things online. Bring it to their doorstep. But
Speaker 1: what about personal letters? Because I feel like emails kind
Speaker 1: of have overwhelmed that. Have you found that there is
Speaker 1: something specially you're saying that there is something different or
Speaker 1: you know, distinctive about getting a physical piece of mail. Uh,
Speaker 1: you know, have you seen sort of the drop in
Speaker 1: personal letters kind of stabilized and people going back to
Speaker 1: that at all? Or I think we are seeing that
Speaker 1: millennials believe it or not a loving mail, So people
Speaker 1: are going back because they really lies the power of
Speaker 1: that that mail piece. Because now that you've got all
Speaker 1: this different communications, mail is just a different experience. You
Speaker 1: go home, you access it when you want it. You're
Speaker 1: not reading it amongst seventy other emails or Facebook or
Speaker 1: this or that that you have to go through. You're
Speaker 1: actually interacting with it at your own pace. So you
Speaker 1: have a different relationship. You have a karma relationship. You
Speaker 1: have a more sustaining relationship with that mail piece than
Speaker 1: you do with all the social media. And I think
Speaker 1: people are realizing the power of that that relationship. Thank
Speaker 1: you so much for joining us. Sounds like an exciting
Speaker 1: time and for being here in Baltimore. Pretamera. She is
Speaker 1: the vice president of mail entry and payment technology for
Speaker 1: the United States Postal Service, talking about different payment systems
Speaker 1: that what she didn't get quite into that, but she
Speaker 1: was talking about the digitization of what your mailbox looks
Speaker 1: like and how you can check what's there, and the
Speaker 1: possible opportunity is for markets as well. Thank you so
Speaker 1: much for joining us, Thanks for listening to the Bloomberg
Speaker 1: P and L podcast. You can subscribe and listen to
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.
Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm
Speaker 1: on Twitter at Lisa abramoits one before the podcast. You
Speaker 1: can always catch us worldwide on Bloomberg Radio