Embed Size (px)
DESCRIPTION
Phoenix-Hecht ®. Impact of U.S. Postal Service Network Consolidation on Remittance Mail. Lex Litton, Phoenix-Hecht Blaine Carnprobst, BNY Mellon Three Rivers Financial Forum April 23, 2013. Session Outline. Three-year plan of U.S. Postal Service changes - PowerPoint PPT Presentation
Citation preview
Information Security Identification: Confidential
Impact of U.S. Postal Service Network Consolidation on Remittance Mail
Lex Litton, Phoenix-HechtBlaine Carnprobst, BNY Mellon
Three Rivers Financial ForumApril 23, 2013
1
Phoenix-Hecht®
Information Security Identification: Confidential2
Session Outline
Three-year plan of U.S. Postal Service changes Assessment of the overall impacts to First Class
Mail & Remittance Mail Recent news from the U.S. Postal Service Remittance processor perspective Billers’ perspective
Phoenix-Hecht®
Phoenix-HechtPhoenix-Hecht provides independent measurements of performance, quality, and pricing to both banks and their customers.
The Phoenix-Hecht Quality Index™ is an annual assessment of individual bank treasury management products, customer service, and relationship managers.
Corporate treasury managers can electronically request individual bank Postal Survey™ or Check Clearing™ times.
Visit http://www.phoenixhecht.com for more information.
3
Mail Volume Shifting to a Less Profitable Mix
Volume in Billions of Pieces
Mail Volume Shifting to a Less Profitable Mix
Mail Processing Facility FootprintNetwork Changes
5
Mail Processing Redesign
Source: USPS
Interim Delivery Stds (1-day intra-plant)Loss of 1-day
Full 8a – 4a plan
Did 46 including Pasadena.
150+ now scheduled .
5-day delivery in
2013?
Phoenix-Hecht®CONFIDENTIAL
Phoenix-Hecht®CONFIDENTIAL
Atlanta
Phoenix-Hecht®
Impact of 5-day Delivery on Remittance Transportation continues to run 7 days; caller delivery continues to
operate 7 days
No delivery to physical addresses on Saturday (residential or business). Delivery to PO Box units.
No mail origination operations at any plant on Saturday
B2B – relatively minor impacts.
C2B – loss of volume receipt Monday – with shift toward Wednesday. First Class mail origination on Saturday was 10% of weekly volume.
Consumer confusion regarding Saturday as a mailing day because retail operations at Post Offices continue.
Phoenix-Hecht®
CONFIDENTIAL
Trend of Average Site in Nationwide Total Float Days
99-1
99-2
00-1
00-2
01-1
01-2
02-1
02-2
03-1
03-2
04-1
04-2
05-1
05-2
06-1
06-2
07-1
07-2
08-1
08-2
09-1
09-2
10-1
10-2
11-1
11-2
12-1
12-2
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
Phoenix-Hecht Postal Survey™
Cha
nge
in M
ail H
ours
Phoenix-Hecht®
CONFIDENTIAL
Trend of Average Site in Nationwide Total Float Days
National Regional Local0
10
20
30
40
50
60
Better Worse No Change
Site
s
Source: Phoenix-Hecht Postal Survey™
Phoenix-Hecht®
CONFIDENTIAL
Average Site Regional Change in 2012-2 Postal Survey
Mail Hours
Mail Days
Availability
Total Float
Nationwide Avg. 2.9 0.13 -0.02 0.12
Regional Average 3.9 0.16 -0.01 0.15
Local Average 5.4 0.26 -0.05 0.21Source: Phoenix-Hecht Postal Survey™
Phoenix-Hecht®
CONFIDENTIAL
Fastest Cities in Nationwide Hours (Ten versus 19 last survey sub-50)
City Hours
City Hours
Boston, MA 40.1 Baltimore, MD 50.1
Atlanta, GA 41.5 Detroit, MI 51.4
Chicago, IL 46.5 Pittsburgh, PA 51.9
Dallas, TX 46.7 Portland, OR 51.9
Louisville, KY 47.2 Kansas City, MO 52.0
Houston, TX 47.9 Milwaukee, WI 52.1
Philadelphia, PA 48.2 Denver, CO 54.1
Cincinnati, OH 49.0 Los Angeles, CA 54.2
Saint Louis, MO 49.2 Cleveland, OH 54.3
Memphis, TN 49.3 Minneapolis, MN 54.7
Phoenix, AZ 55.3Source: Phoenix-Hecht Postal Survey™
Phoenix-Hecht®
CONFIDENTIAL
Most Deteriorated Cities (Nationwide Mail Hours)
City IncreaseSan Francisco, CA 17.7Charlotte, NC 14.4Los Angeles, CA 8.4Phoenix, AZ 6.4Cleveland, OH 6.2Baltimore, MD 6.0Memphis, TN 6.0Detroit, MI 4.8Cincinnati, OH 4.4New York, NY 3.9Denver, CO 3.9Seattle, WA 3.9Pittsburgh, PA 3.2Milwaukee, WI 2.1Minneapolis, MN 2.0Dallas, TX 2.0
Source: Phoenix-Hecht Postal Survey™
Phoenix-Hecht®
CONFIDENTIAL
Disadvantage of Non-remittance Address versus City Average
Atlanta Chicago Dallas LA Philadelphia
Mail Hours
29.0 25.5 19.8 18.8 23.2
Mail Days 0.16 0.09 0.04 0.02 (0.05)Availability
0.85 0.71 0.55 0.80 0.90Source: Phoenix-Hecht Postal Survey™
Phoenix-Hecht®
CONFIDENTIAL
Recent U.S. Postal Service News
Information Security Identification: Confidential
OPERATE IN 36 COUNTRIES AND OVER 100 MARKETS
Americas30,000+
BNY Mellon employees
EMEA9,000+
BNY Mellon employees
Asia-Pacific9,000+
BNY Mellon employees
BNY Mellon Locations
Institutional and retail investment management
Wealth management for individuals and families
Full range of financial operations, cash management and global payments services
$1.4 trillionassets under management1,2
7th largestUS asset manager3
7th largestglobal asset manager4
$178 billionin private client assets1
Top 3ranked private bank in US5
Top 10US wealth manager6
$27.9 trillion assets under custody and administration1
$11.6 trillion outstanding debt serviced1
$2 trillionglobal collateral serviced1,7
$1.4 trillionaverage payments processed daily1
Investment Management Investment Services
Information Security Identification: Confidential20
Remittance Processor Impacts:Changes Will Continue Through 2014
Impacts will likely be gradual and will likely have “swings”
Don’t want to respond with a knee-jerk reaction Will continue keeping customers aware of
changes as we’re seeing them
Information Security Identification: Confidential
Remittance Processor Impacts:Lockbox Operation Staffing Changes
Anticipated incoming mail for each shift Assess changes over time; will need some staffing
flexibility Customer awareness
of volume “challenges” Feb 2014 change to the
shift operations
21
Information Security Identification: Confidential22
Remittance Processor Impacts:Evaluation of Customer Daily “Deadlines”
Lockbox “Cut Off” times Deposit reporting deadlines Transmission times:
• A/R data & images• Non-lockbox transmission sources:
− ACH, EDI & Wire Image access commitment times Recognize that end-client systems processing
times will limit changes to transmissions
Information Security Identification: Confidential
Remittance Processor Impacts:Float Impact Projections For Clients
Estimated average mail time delays• Ongoing mail sampling, though not scientific• Phoenix-Hecht Mail Study results
Service Level Agreement (SLA) timing impacts(ie. Processing timeline commitments)
23
Information Security Identification: Confidential24
Remittance Processor Impacts:Consideration of 3rd Party Mail Receipt And Scanning Locations
Pros:• Opens other geographic receipt locations
Cons:• Not having an established remittance address
(e.g. does a Seattle non-remittance address perform any better than a Los Angeles remittance address?)
Information Security Identification: Confidential25
Remittance Processor Impacts:BNY Mellon’s Experiences Thus Far
Closure of Pasadena Processing & Distribution Center (P&DC)• Mail processing in LA with pickup in Pasadena• Potential further change to pickup location
Overall network mail time observations• Impacts observed in Phoenix-Hecht 2012-2 Postal Survey• Since October survey, mail distribution has moved a little later in
Dallas• 2013-1 Postal Survey in process• Meetings with USPS have helped lessen some impacts,
particularly Pasadena. Efforts coordinated with other processors.• Experiences among presentation attendees (providers & billers)?
Information Security Identification: Confidential26
Biller Impacts: Different responses by industry
“Open Account” bill payment (typically C2B)• Property & Casualty Insurance – buying a claim• Credit Card Processor – late fees & interest• Mortgage – late fees• Utilities – late fees & possible shut-off
Transaction payments, e.g. invoices (typically B2B)• Could cause product shipment delay• Could lead to a decline for additional orders / purchases
Information Security Identification: Confidential
Marketing electronic payment alternatives
ACH pre-authorized debit Electronic Bill Presentment & Payment Debit Cards Credit Cards Home banking payments
27
Information Security Identification: Confidential28
Where can you get more information?
U.S. Postal Service Network Rationalization Information• http://about.usps.com/news/facility-studies/
welcome.htm
Information Security Identification: Confidential
Impact of U.S. Postal Service Network Consolidation on Remittance MailLex LittonPhoenix-Hecht, Senior Vice [email protected]
Blaine CarnprobstBNY Mellon, Managing Director, [email protected]
29
Phoenix-Hecht®
