Latest / Bloomberg Intelligence / USPS' Seaver Sees Cases for Autonomous and Drone Delivery

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USPS' Seaver Sees Cases for Autonomous and Drone Delivery · Bloomberg Intelligence

0:05
Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
0:08
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
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Speaker 1: bring you the most important, noteworthy, and useful interviews for
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Speaker 1: or the trading floor. Find the Bloomberg p m L
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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We
0:32
Speaker 1: are broadcasting live from Baltimore. We are at the National
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Speaker 1: Postal Forum, which is a partner of the United States
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Speaker 1: Postal Service. And I was looking at doing some research
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Speaker 1: about the United States Postal Service, and I was surprised
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Speaker 1: to find that if this were a private company last year,
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Speaker 1: it would have been the thirty ninth biggest company in
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Speaker 1: the Fortune five hundred corporations, which is impressive. And with
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Speaker 1: us to give us a little bit of more perspective
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Speaker 1: on both the company and the broader market for shipping
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Speaker 1: and frankly, making mail relevant in an era where people
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Speaker 1: are hooked to their phones, is Kristin Siever, chief Information
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Speaker 1: Officer and executive vice president of the United States Postal Service,
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Speaker 1: and she joins us uh here now, so you know, Kristin,
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Speaker 1: one thing that we've been hearing a lot about is
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Speaker 1: the importance to sort of transform, uh, the way people
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Speaker 1: think about mail, the way that they track it, the
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Speaker 1: way that they observe it and experience it. What do
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Speaker 1: you think is going to be the biggest challenge in
1:27
Speaker 1: the year ahead as you sort of look out, try
1:30
Speaker 1: to make it modern but also catered to nostalgia and
1:33
Speaker 1: you know, also uh the amazonification of our world absolutely well,
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Speaker 1: you know, I think one of our greatest challenges is
1:41
Speaker 1: going to be to keep pace. We've done a lot
1:43
Speaker 1: of work, as you'll see at the National Postal Forum,
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Speaker 1: UH in building technologies and platforms to track mail, to
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Speaker 1: provide value to mail UM. But our challenges to keep
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Speaker 1: that mail relevant, to work with our customers to help
1:55
Speaker 1: them grow their businesses, and to work as every industry
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Speaker 1: he has to do right now at an incredible pace
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Speaker 1: to keep up and leverage these technologies to the best extent.
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Speaker 1: How difficult is it? I was just looking at the
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Speaker 1: US Post Services UH income statement recent income statement, UH,
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Speaker 1: and there was a four hune seventy four million dollar
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Speaker 1: year of your decline in the second quarter, and it
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Speaker 1: was in large part due to having to pre fund
2:23
Speaker 1: seventy five years of retiree health benefits and how much
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Speaker 1: of that is a pressure on being able to adapt
2:29
Speaker 1: to the changing environment. Yeah, the Postal Service faces significant
2:33
Speaker 1: pressure when it comes to our finances and and how
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Speaker 1: we're run. And we really have three things that we're
2:38
Speaker 1: trying to focus on. The first is for the Postal
2:41
Speaker 1: Service to adapt quickly and to manage its operation. Uh,
2:45
Speaker 1: to react to declining volumes, but also to compete where
2:48
Speaker 1: volumes are increasing. Right, so that's quite a challenge. Are
2:51
Speaker 1: the two challenges are legislative and regulatory and uh, we
2:55
Speaker 1: have a positive bill that came out of committee for
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Speaker 1: postal reform that's really important to us. What's the what's
3:01
Speaker 1: the substance of it. The substance of the Postal Reform
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Speaker 1: bill is basically allows us to address our retiree health
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Speaker 1: benefit There you go issue with integrating medicare, allows us
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Speaker 1: to use postal service demographics instead of federal government demographics
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Speaker 1: everythink about the postal Service. We have workers all over
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Speaker 1: the United States in um varying income levels. It allows
3:21
Speaker 1: us to take back some of the exigent price increase,
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Speaker 1: and it also gives us a little bit of flexibility
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Speaker 1: for some new products and services. That we're excited about. Well, so,
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Speaker 1: since we all talk about Amazon so much and Amazon
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Speaker 1: is just decimating the entire retail sector. As what people
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Speaker 1: have been saying, Um, do you find that the US
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Speaker 1: Postal Service is able to keep up from a technological
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Speaker 1: point of view and being able to deliver all of
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Speaker 1: the boxes? And can you give us a sense of
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Speaker 1: how much the just sheer volume of packages has increased
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Speaker 1: over the past few years. Yeah, we've had double digit
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Speaker 1: increase in package volume year over year for the last
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Speaker 1: three years. But the thing that's been great about the
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Speaker 1: postal services that we have the delivery muscle deflects that
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Speaker 1: we go to every house, we go to every business,
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Speaker 1: and it's really been an opportunity for us to showcase
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Speaker 1: our strength what we've been doing for over two forty years.
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Speaker 1: But aren't there a lot more competitors because people are
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Speaker 1: looking and saying, wow, this is the future, right, this
4:16
Speaker 1: is the reality is that you're gonna be able to
4:19
Speaker 1: order something, pick something up, and then it's going to
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Speaker 1: come to your home. And so they're going to be
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Speaker 1: some probably shippers and delivery companies they're gonna try to compete. Absolutely. Um,
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Speaker 1: So one of the advantages we have is we've already
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Speaker 1: built out our network UH, and we leverage that network.
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Speaker 1: The other thing is, even with competition, which is fierce,
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Speaker 1: but we still deliver more e commerce packages than any
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Speaker 1: of the provider in the country. UH. And we will
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Speaker 1: continue to leverage our brand, our trusted presence, and everybody's
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Speaker 1: business and community UH to compete and to win for
4:50
Speaker 1: that package delivery. We were talking earlier about drones. Are
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Speaker 1: those on your radar? They have to as this chief
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Speaker 1: information officer, absolutely and I get that question a lot. Okay, So,
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Speaker 1: so how do you for see drones playing into the
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Speaker 1: United States Postal Services business plan in the near future. Well,
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Speaker 1: I think for us, what's important is we have many
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Speaker 1: use cases for delivery. Right. We deliver in urban areas,
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Speaker 1: we deliver in rural areas. We deliver in the Grand Canyon.
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Speaker 1: So maybe there's maybe the dropdown packages into the into
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Speaker 1: the Colorado River go down and we've had delivery on
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Speaker 1: burrows into the Grand Canyons. That might be a possible
5:23
Speaker 1: use case of drone delivery for the Postal Service. Right.
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Speaker 1: There are some places that are hard to get to UH,
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Speaker 1: and we definitely foresee um uses like that but we
5:33
Speaker 1: can also use it to survey our own infrastructure. There's
5:35
Speaker 1: many different use cases. So what we're doing is staying
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Speaker 1: in touch with the technology, staying in touch with the
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Speaker 1: regulations UH, and really scrubbing our use cases to see
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Speaker 1: where our best UH fit's gonna be. You know, we've
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Speaker 1: talked about how German postals, the German Postal Service in
5:51
Speaker 1: particular has looked at autonomous driving vehicles to help reduce
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Speaker 1: costs and increase the delivery predictability. Has that been on
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Speaker 1: your radar at all? Absolutely? We we have some efforts
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Speaker 1: with autonomous working with academic institutions UH as far as
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Speaker 1: what would be the use case, how would we use
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Speaker 1: it in the postal service UM? For us, you know,
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Speaker 1: one of the things is we have such a significantly
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Speaker 1: large fleet, so over two hundred and seventy thousand vehicles,
6:20
Speaker 1: so that have to be driven and maintained throughout throughout
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Speaker 1: the country to deliver the mail every day, and now
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Speaker 1: we deliver seven days a week. So we definitely foresee
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Speaker 1: that we'll have use cases for autonomous vehicles, whether it's
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Speaker 1: in actual delivery or we're also a huge logistics provider.
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Speaker 1: We have to get the mail from across the country.
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Speaker 1: So what how is much? How much has the ratio
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Speaker 1: between UH letters and packages changed? I imagine that once
6:44
Speaker 1: upon a time there are more letters and fewer packages,
6:48
Speaker 1: and now it has reversed. Right, It hasn't fully reversed.
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Speaker 1: Oh No, letters are still the predominant product that we have.
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Speaker 1: But basically as letters are declining, packages are increa using.
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Speaker 1: So we haven't crossed that great divide of where total
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Speaker 1: letter volume is less than packages. But you know, the
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Speaker 1: decline and letter volume is concerning UM and that's why
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Speaker 1: we have to compete for the package business and and
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Speaker 1: continue to deliver for the American public. What's going to
7:14
Speaker 1: be the number one technological advancement in the next year
7:18
Speaker 1: for USPS. I think the number one advancement that will
7:22
Speaker 1: be able to leverage is our advanced analytics platform UH
7:26
Speaker 1: to continue to provide value to the mail but also
7:30
Speaker 1: to find ways to enhance our own business UH and
7:32
Speaker 1: to find those opportunities that might allow us to reduce costs,
7:35
Speaker 1: might allow us to produce new products. We put a
7:39
Speaker 1: lot of investment into that over the last three years,
7:41
Speaker 1: and now that's finally coming to fruition. Kind of what
7:43
Speaker 1: we talked about before about being able to UH with
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Speaker 1: preeminent amera, talking about how people can look and scan
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Speaker 1: and see what's in their mailboxes without actually being there
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Speaker 1: and possibly even use some of the UH advertisement flaws delivery.
7:59
Speaker 1: Today this year at the National Postal Forum, we have
8:01
Speaker 1: two major platforms that were leveraging and formed delivery and
8:05
Speaker 1: informed visibility, and they really go hand in hand. So
8:08
Speaker 1: Informed Delivery is exciting because every consumer has access to
8:11
Speaker 1: it and can sign up and and you know tomorrow
8:15
Speaker 1: be looking at those images of their mail. Thank you
8:17
Speaker 1: so much for joining us, Kristin sever It was really
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Speaker 1: a pleasure to speak with you. Christin Siever is chief
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Speaker 1: Information Officer and executive a vice president of the United
8:25
Speaker 1: States Postal Service here in Baltimore, Maryland, where we are
8:29
Speaker 1: broadcasting live from the National Postal for Forum right now, however,
8:44
Speaker 1: I want to bring in Jonathan Nicholson, senior reporter at
8:46
Speaker 1: Bloomberg b n A, to give us some perspective on
8:50
Speaker 1: what we've gleaned so far from President Trump's hoped budget
8:54
Speaker 1: anyway UH, and how likely it is that he is
8:56
Speaker 1: going to get through some of what he wants. Jonathan,
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Speaker 1: Thank you so much for joining us Jonathan, Uh, what
9:01
Speaker 1: have we gleaned so far about what President Trump would
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Speaker 1: like to see in the budget. Well, he goes through
9:08
Speaker 1: a lot of One could argue sort of fiscal gymnastics
9:11
Speaker 1: to try and um sort of square the circle of
9:15
Speaker 1: of doing tax reform, increasing defense, UM, but also trying
9:20
Speaker 1: to get to something close to balance by the end
9:23
Speaker 1: of ten years, which has been a long term Republican
9:26
Speaker 1: budget goal for a long time. So when doing so,
9:29
Speaker 1: basically they rely on some economic growth projections that people
9:35
Speaker 1: have some questions about, and they rely on some some
9:38
Speaker 1: deep cuts in both the non defensivescretionary and some mandatory
9:43
Speaker 1: entitlement spending programs. So I'll just go through some of
9:46
Speaker 1: the headlines that I've been looking at. Some of the information.
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Speaker 1: People have said that it would hit uh, you know,
9:51
Speaker 1: all of the welfare and sort of entitlement programs other
9:54
Speaker 1: than Medicaid, for example. It would strip away a lot
9:57
Speaker 1: more there. It would make it tougher to at some
10:00
Speaker 1: of the tax breaks for lower income individuals. It would
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Speaker 1: remove uh, money for some of the offices that have
10:10
Speaker 1: been expanded under under a former President Obama in favor
10:13
Speaker 1: of bolstering defense. Right, I mean is that basically the gist.
10:18
Speaker 1: I mean, what are sort of the areas that you
10:20
Speaker 1: think are going to stick and have staying power through
10:24
Speaker 1: all of the congressional negotiations that are inevitable. Well, it's
10:28
Speaker 1: it's actually kind of tough to see exactly, um, how
10:33
Speaker 1: much will stick and what specifically will stick. Um. Congressional
10:37
Speaker 1: Republicans are actually in many cases being very publicly neutral
10:42
Speaker 1: uh and privately, um, not very accepting of this, um
10:47
Speaker 1: real appropriate. Well, because you know, it's one thing to
10:52
Speaker 1: say that you want to balance the budget and so on,
10:55
Speaker 1: it's quite another one actually comes to actually to put
10:57
Speaker 1: the the you know, where the rubber beats the road. Um.
11:00
Speaker 1: And so one of the things that's basically just had
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Speaker 1: the House chairman of the Appropriations Committee, the Freelinghouse and
11:06
Speaker 1: put out a very neutral, uh, neither for it nor
11:09
Speaker 1: against it kind of statement just a couple of minutes ago.
11:12
Speaker 1: Or he said, yeah, our job is appropriators is to
11:15
Speaker 1: exercise the power of the purse, which is not really
11:18
Speaker 1: that newsy because that is their job, all right. So
11:21
Speaker 1: it's basically a nonstatement. He doesn't really want to comment
11:23
Speaker 1: on it one way or another. Can we get a
11:25
Speaker 1: sense of history here with what past presidents have done
11:29
Speaker 1: when they've released their budgets or their proposed budgets. How
11:32
Speaker 1: much support do they generally get in advance from either
11:36
Speaker 1: congressmen of their same party or reach across the aisle.
11:40
Speaker 1: I mean, usually is their leg work that's done ahead
11:42
Speaker 1: of time or is this always the opening salvo? It's
11:46
Speaker 1: it's certainly an opening salvo. I mean, you know, there's
11:49
Speaker 1: the running joke, it's it's almost clichete even joke about it. Now,
11:53
Speaker 1: is that no matter what the party mixes of who
11:56
Speaker 1: holds the who holds the Congress, who holds the White House,
12:00
Speaker 1: that when the president sends up a budget, someone will
12:02
Speaker 1: always say, quote, it's dead on arrival, um. And that
12:04
Speaker 1: is the case with this one. The interesting thing here
12:07
Speaker 1: is that this is the first year budget that has
12:09
Speaker 1: taken this long to send it up UM, and it
12:13
Speaker 1: still is lacking the details of the tax reform proposal
12:16
Speaker 1: that they want to get to agreement on with the
12:18
Speaker 1: House and Senate Republicans. UM. And yet it's still is
12:22
Speaker 1: this's got this very The appropriators don't like the cuts
12:25
Speaker 1: to discretionary spending, The moderates don't like the cuts to
12:30
Speaker 1: some of the some of the entitlements, some of the
12:33
Speaker 1: some of the social net programs. UM. So it's kind
12:36
Speaker 1: of interesting that usually if you do have a budget
12:37
Speaker 1: that has some degree of momentum to it, it usually
12:41
Speaker 1: is the president's first year budget. And in that sense,
12:45
Speaker 1: what we're seeing here today, particularly even with Trump even
12:47
Speaker 1: out of out of the country, while this budget is
12:49
Speaker 1: being dropped, is not nearly I think historically what we
12:53
Speaker 1: usually see, um in terms of first year budget reaction.
12:57
Speaker 1: You know, it's funny that you mentioned that he's President
12:59
Speaker 1: Trump is at of the country, because that was my
13:01
Speaker 1: first comment to why is he doing it now while
13:03
Speaker 1: he's not here, to kind of do the rounds with
13:06
Speaker 1: it and give people an explanation of why he's so
13:09
Speaker 1: behind this particular plan, especially if people are coming out
13:12
Speaker 1: with pretty neutral expressions of you know, how they assess it.
13:17
Speaker 1: I mean, is that typical you're kind of implying, not
13:21
Speaker 1: so much. And if it's not typical, was this planned
13:24
Speaker 1: this way or did it just sort of happen this way? Well,
13:27
Speaker 1: he was They picked this budget release date maybe about
13:32
Speaker 1: two weeks ago or so. I think by then they
13:34
Speaker 1: probably already had I would suspect at least they already
13:36
Speaker 1: had the dates locked in for the international trip that
13:39
Speaker 1: he that he's on now. UM. I do not recall
13:43
Speaker 1: the last time a president was out of the country
13:45
Speaker 1: when his budget dropped. But I also haven't checked, so
13:47
Speaker 1: I wouldn't necessarily read too much in that. But you're right.
13:50
Speaker 1: Usually it is the day when the president says, you know,
13:53
Speaker 1: here's what we stand for fiscal fiscal policy wise. UM.
13:57
Speaker 1: And today that burden is being basically borne by mc mulvaney,
14:01
Speaker 1: who is you know, as a as a cabinet member,
14:03
Speaker 1: as an MB person, but is not, you know, not
14:06
Speaker 1: the president. UM. So so can you give me a sense, Jonathan,
14:10
Speaker 1: of what the next steps are sort of how this
14:12
Speaker 1: will move and be potentially implemented if at all. Uh.
14:17
Speaker 1: There's sort of a two two things to watch for. Basically,
14:20
Speaker 1: the House in Senate budget committees will take this under adversement,
14:26
Speaker 1: you know, and take a look at it. They will
14:28
Speaker 1: do their own budget resolutions, UM probably in June. UM
14:31
Speaker 1: they have to do a budget resolution. If Republicans hope
14:36
Speaker 1: to propiscate teen, if the Provolicans hope to do tax
14:38
Speaker 1: reform with Republican only votes as they plan, UM is
14:43
Speaker 1: so so what you look with for that is whether
14:45
Speaker 1: or not they set up some reconciliation structions for tax
14:49
Speaker 1: reform and for some of these spending cuts that that
14:53
Speaker 1: Trump is wanting. That's one measure of how much of
14:55
Speaker 1: this one get actually potentially enacted into law. The other
14:58
Speaker 1: aspect of the appropriations processes, well, the appropriators marked to
15:02
Speaker 1: the one point zero six five trillion of appropriated dollars
15:07
Speaker 1: that are set up in this in this budget UM,
15:10
Speaker 1: and that seems to be a little bit closer to
15:13
Speaker 1: to being UM to happening. I think there's still a
15:17
Speaker 1: question of how they do the defense non defense mix,
15:20
Speaker 1: which they probably will not do UM as much of
15:23
Speaker 1: a mix toward defense as Trump as proposed. UM. Jonathan,
15:27
Speaker 1: I'm looking at a headline on the Bloomberg. Trump's three
15:30
Speaker 1: point six trillion dollar budget cuts hit his own supporters hard.
15:35
Speaker 1: In other words, the people who are going to be
15:38
Speaker 1: the worst benefited to the least benefited from his current
15:42
Speaker 1: proposal are some of the people who supported him the most.
15:45
Speaker 1: Can you explain how that is? Oh, well, there's a
15:48
Speaker 1: there's a lot of political reporting about how much of
15:52
Speaker 1: his support UM was in sort of UM hard scrabble economically, UM,
15:59
Speaker 1: tough areas West Virginia, Kentucky, so on. Uh. And in
16:03
Speaker 1: those areas, many of those many that's probing one, but
16:07
Speaker 1: a certain proportion are on say, social Security disability, which
16:11
Speaker 1: is one of the things that is proposed to be
16:14
Speaker 1: cut on this. Another is UM uh snap what used
16:19
Speaker 1: to be called food stamps. UM. So this certainly looks
16:22
Speaker 1: at those at those areas UM and and and to
16:27
Speaker 1: the extent that those are concentrated among rural rural supporters
16:33
Speaker 1: of of Trump, UH, it would indeed be certain fighting
16:36
Speaker 1: fighting hand they want to bring in back. Jonathan Nicholson,
16:38
Speaker 1: senior reporter at Bloomberg b NA, to give us a
16:41
Speaker 1: little bit of perspective, Jonathan, what stood out to you
16:44
Speaker 1: as sort of the most important thing uh that mcmulhenney
16:47
Speaker 1: just said. There were two things that struck me. UM.
16:50
Speaker 1: One is he's kind of picked the three percent growth
16:53
Speaker 1: rate as his hill to die on UM, which I
16:56
Speaker 1: think is going to be a tough sell when he
16:58
Speaker 1: appears before the Budget Committee is uh tomorrow in the
17:01
Speaker 1: day after UM. A lot of mainstream economists think that
17:04
Speaker 1: that's just not credible UM and uh. And so that's
17:07
Speaker 1: the fact he stucked his guns on that seems that's
17:10
Speaker 1: gonna be an issue. The other thing was he changed
17:12
Speaker 1: his wording on on Social Security to say social Security retirement. UM. Now,
17:18
Speaker 1: in the past couple of days and the previous and
17:20
Speaker 1: so on, they've been talking about they haven't they don't
17:21
Speaker 1: touch social Security. UM. But I think when they talk
17:25
Speaker 1: when they're doing the disability insurance, which is part of
17:27
Speaker 1: the Social Security program and has included when you hear
17:30
Speaker 1: those dates about win social Security goes bankrupt and so on,
17:32
Speaker 1: it's a separate trust fund that they put the old
17:34
Speaker 1: dates Survivors Trust Fund and the Disability Insurance Trust Fund
17:37
Speaker 1: together called social Security and say it goes bankrupting X
17:40
Speaker 1: y Z year or so on. UM. I think it's
17:42
Speaker 1: interesting that he sort of walked that back to say
17:44
Speaker 1: social Security retirement UM as seemingly a tacit acknowledgement of
17:49
Speaker 1: that criticism that they were trying to be evasive there.
17:52
Speaker 1: You know. I thought it was also interesting that the
17:54
Speaker 1: way that the Trump administration is going to measure the
17:58
Speaker 1: success of programs in the passion of programs is not
18:01
Speaker 1: how many people they serve, but by how many people
18:04
Speaker 1: get off of some of the entitlement programs. So that
18:06
Speaker 1: stand out to you or what does that actually mean
18:09
Speaker 1: to you? That's a longstanding um rhetorical point that a
18:15
Speaker 1: lot of a lot of anti spending Republicans have, basically
18:20
Speaker 1: that you can't measure the success of programs by the
18:22
Speaker 1: amount of money spent um. Now, there's usually a path
18:25
Speaker 1: for this, given for defense, because defense, as his budget
18:30
Speaker 1: has been about doubled over the last seventeen years or so. Um.
18:33
Speaker 1: But now the other aspect of that is that he
18:35
Speaker 1: has a point in the sense that CBO does assume
18:38
Speaker 1: that if inflation is three percent, then for a program
18:41
Speaker 1: to do the same thing next year, is it needs
18:43
Speaker 1: at least a three percent increase. So in that sense
18:47
Speaker 1: there are sort of inflation expectations ratcheted into the CBO
18:53
Speaker 1: nonpartisan baseline. You know, I thought that it was also uh,
18:57
Speaker 1: you know, I want to go back to the wall
18:59
Speaker 1: comments pick as people have said that there really hasn't
19:02
Speaker 1: been uh much money put aside to finance this program
19:06
Speaker 1: to build a wall between the United States and Mexico.
19:10
Speaker 1: People question, perhaps President Trump doesn't really mean a physical wall,
19:13
Speaker 1: but something that's a little bit more I'm a mix
19:15
Speaker 1: between more surveillance and uh and some physical building. But
19:20
Speaker 1: but Mitmilviny said, we are dead serious about the border wall,
19:23
Speaker 1: and this is one of his top three priorities. What
19:25
Speaker 1: is that? What does that signifying? Where? Where? Where is
19:27
Speaker 1: the money going to come from? Well, in the in
19:30
Speaker 1: the budget, say they did one point six billion for
19:32
Speaker 1: for the wall, at least sort of start getting started.
19:36
Speaker 1: I think the significance of that is that when when
19:39
Speaker 1: it comes time in September, everyone here on the Hill
19:42
Speaker 1: seems resigned to the idea already that we're looking at
19:45
Speaker 1: a continuing resolution come September to keep the government open.
19:48
Speaker 1: And so that will mean that again there will need
19:50
Speaker 1: to be democratic support for doing so. And so that's
19:54
Speaker 1: where you set up this question whether we're going to
19:56
Speaker 1: have a shutdown showdown, whether Trump will follow through and
19:59
Speaker 1: what he said a couple weeks ago about you know,
20:01
Speaker 1: a good shutdown, things like that, UM, and so in
20:05
Speaker 1: that debate, should that happen in September as people seem
20:08
Speaker 1: to expect. Um this question of wall funding, which was
20:11
Speaker 1: sort of sort of worked through and sort of elited
20:16
Speaker 1: or sort of you know, kind of danced around in
20:19
Speaker 1: flashed omnibus. UM. If that it truly is one of
20:22
Speaker 1: the top three priorities for the administration, then that could
20:26
Speaker 1: be a very big sticking point come September. That would
20:29
Speaker 1: be that races of flag there seems to me, Um,
20:32
Speaker 1: And just going back to what you were saying about
20:34
Speaker 1: the three growth rate, you're you flagged and rightly so
20:37
Speaker 1: that a lot of economist say it that is not probable.
20:40
Speaker 1: In the New York term. You have people including Harvard
20:43
Speaker 1: professor Larry Summers, coming out and saying that just does
20:45
Speaker 1: not seem, uh in the cards, given the fact that
20:48
Speaker 1: you do have an aging population and just generally slower
20:50
Speaker 1: growth around the world. Do you expect there to be
20:54
Speaker 1: hearings where we have economists coming in and sort of
20:56
Speaker 1: throwing cold water on that three percent rate? Or is
20:59
Speaker 1: this is this it? I mean it is this going
21:01
Speaker 1: to be basically, uh, you either have to accept it
21:04
Speaker 1: or you aren't even going to debate on the same
21:05
Speaker 1: on the same playing field. With respect to this budget,
21:09
Speaker 1: I assume it'll be a little bit more of a
21:12
Speaker 1: he said. She said, I mean, I think the Republicans controls,
21:16
Speaker 1: you know, the both chambers, so that they can they
21:19
Speaker 1: can control what hearings are called. Um. I'm sure if
21:22
Speaker 1: Democrats control one of the chambers, they would love to
21:24
Speaker 1: have a hearing on what are realistic economic growth projections
21:28
Speaker 1: given the the aging and less productive workforce. Um. But
21:32
Speaker 1: that doesn't mean that the Democratic senators won't bring this
21:34
Speaker 1: up during the during the hearings tomorrow and the House
21:37
Speaker 1: Budget Committee, or the hearing tomorrow or the hearing Thursday
21:42
Speaker 1: at the Center Budget Committee. UM. This is uh, this
21:45
Speaker 1: has been something that people have been sort of zeroing
21:47
Speaker 1: in on for a couple of days now in terms
21:50
Speaker 1: of in terms of possible bones of contention with this budget,
21:55
Speaker 1: and it is such a such a uh. You know,
21:58
Speaker 1: there are some people the Committee for Responsive Subtle Budget
22:00
Speaker 1: by Person group the other week said they thought, you know,
22:03
Speaker 1: maybe you can get up to to two point one
22:05
Speaker 1: two point two if you did some reform, but it
22:08
Speaker 1: would be I think the phrase was quote pretty heroic
22:10
Speaker 1: to get to three from the current one point eight
22:13
Speaker 1: one point nine long term trend growth. Jonathan Nicholson, thank
22:17
Speaker 1: you so much for joining us and bringing down what
22:19
Speaker 1: we've just listened to. Jonathan Nicholson, as a senior reporter
22:22
Speaker 1: at Bloomberg, we want to take a moment to let
22:33
Speaker 1: you know about something new from Bloomberg. Starting right now,
22:36
Speaker 1: you can use our io s app or our new
22:38
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22:42
Speaker 1: instantly revealing relevant news and market data from Bloomberg and
22:45
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22:48
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22:50
Speaker 1: bring the power of Bloomberg's news and data with you.
22:53
Speaker 1: It's pretty amazing. Download our Io s app or search
22:56
Speaker 1: for the Bloomberg extension on the Chrome Store to try
22:58
Speaker 1: it out. Learn more at Blomberg dot com slash lens. Well,
23:11
Speaker 1: it is my honor to bring in Chris Hewlett, who
23:13
Speaker 1: is manager of US Drone Powered Solutions for Price Waterhouse Coopers,
23:17
Speaker 1: which is based in Washington, d C. Also a former
23:21
Speaker 1: Navy pilot for twenty one years, and he joins us
23:24
Speaker 1: now to talk about a very hot topic when it
23:26
Speaker 1: comes to all things delivery, which is drones and this
23:28
Speaker 1: sort of dream that a lot of people have. One
23:30
Speaker 1: day we will look up in the skies and we
23:32
Speaker 1: will just see an army of drones dropping packages at
23:35
Speaker 1: our footsteps and delivering everything on demand. So Chris, thanks
23:40
Speaker 1: so much for joining us. I'd love to get your
23:41
Speaker 1: take first as we talk about this transition or adaptation
23:46
Speaker 1: of mail in a digital era, how much do drones
23:49
Speaker 1: really play into that at this point? Right? Thanks Lisa
23:52
Speaker 1: for having me here today. And it's an interesting conversation
23:55
Speaker 1: because right now the drone addressable drone market, which we
23:58
Speaker 1: talked about a hundred and twenty seven billion dollars for
24:01
Speaker 1: drone applications, and what part of that is the delivery piece?
24:06
Speaker 1: And you take a look at last mile deliveries which
24:08
Speaker 1: a lot of people are doing experimentation with, and really
24:11
Speaker 1: it gets down to an addressable market. So before before
24:16
Speaker 1: you go on to UH drone application, could you give
24:19
Speaker 1: us a sense of what that means? Okay, so drone application, UM,
24:24
Speaker 1: it's famously quoted. UM. There are companies out there that
24:28
Speaker 1: state that their package deliveries of them weigh less than
24:32
Speaker 1: five pounds, So less than five pounds is easily addressable
24:36
Speaker 1: with a drone UM. And then there's other companies that
24:39
Speaker 1: are large retail chains that UH speak about the statistics
24:43
Speaker 1: that of Americans alone live within five miles of a
24:47
Speaker 1: large retail outlet. So now you're talking about an addressable market, right,
24:51
Speaker 1: So an application, so a five pound package being delivered
24:56
Speaker 1: from a large retail chain to a home within five aisles.
25:00
Speaker 1: That's an addressable market UM. But where those applications could
25:04
Speaker 1: be implemented. It really comes down to an implementation strategy,
25:09
Speaker 1: and I think what we have to do in this
25:12
Speaker 1: country specifically is addressed three key issues. Uh. Safety. First,
25:18
Speaker 1: obviously there has to be going in and take people
25:21
Speaker 1: correct if if it's not a safe application, then obviously
25:25
Speaker 1: there's gonna be some federal issues with that and people
25:27
Speaker 1: will take social safety. The second thing has to be
25:32
Speaker 1: consumer confidence, right because not not uncommon now. Think about
25:37
Speaker 1: the way things used to be back in the day
25:39
Speaker 1: when you could open up a catalog and you could
25:41
Speaker 1: order something that that risk was all on the can
25:45
Speaker 1: the delivery mechanism because it was all cash on delivery, right,
25:49
Speaker 1: So you order something out of a catalog on the
25:51
Speaker 1: phone and it showed up and you paid for it
25:54
Speaker 1: on the spot, and if you didn't have the cash
25:55
Speaker 1: to pay for it, it was brought back home. That's
25:58
Speaker 1: not the case now, so all of the UM risk
26:02
Speaker 1: is on the consumer now to pay for something online
26:07
Speaker 1: and have it delivered to your house. So that has
26:11
Speaker 1: to be an addressable issue. Because if we can't give
26:14
Speaker 1: the consumer confidence that the package in question that costs
26:18
Speaker 1: fifty hundred dollars a thousand dollars is going to arrive
26:23
Speaker 1: without any kind of damage or on time. Well, but
26:25
Speaker 1: you know, I've got to be honest, I'm actually surprised
26:27
Speaker 1: that we don't see any drones delivering anything. I mean, honestly,
26:30
Speaker 1: there's there. And not only do we not see any drones,
26:32
Speaker 1: but there has been such controversy over testing. There's you know,
26:35
Speaker 1: even having you know, potential test runs. So you know,
26:39
Speaker 1: how realistic is it that this will play any kind
26:41
Speaker 1: of meaningful part in the delivery of packages any time
26:45
Speaker 1: in the near future. Sure. The great news is that
26:47
Speaker 1: there are federal agencies that are working on what's called
26:50
Speaker 1: the Unmanned Aerial System Transportation Management System u t M
26:55
Speaker 1: UH and that's going through testing phases right now. And
26:57
Speaker 1: the the idea behind u t M is to provide
27:01
Speaker 1: oversight from air traffic control perspective on where commercial applications
27:05
Speaker 1: are being utilized of drones. I think the fact the
27:08
Speaker 1: fastest way forward for delivery mechanisms is actually in a
27:13
Speaker 1: rural area where it's less congested. Um. Ironically, this mirror
27:17
Speaker 1: is kind of what we're seeing on a global perspective
27:20
Speaker 1: from drone delivery mechanisms in third world countries which are
27:24
Speaker 1: finding the fastest proliferation of drone deliveries because of UM
27:28
Speaker 1: the need to get UM UH medicine, food, water, things
27:32
Speaker 1: to areas. So Tanzania UM it would be an example
27:38
Speaker 1: of utilization of drone strategies to get UM needed medicine
27:43
Speaker 1: to remote areas in a faster fashion. UH. And it's
27:46
Speaker 1: because there's no federal restrictions. So who's running those operations? Well,
27:52
Speaker 1: those are all being done in partnership with various different
27:55
Speaker 1: governments and foreign entities that are working on drone UH
28:00
Speaker 1: implementation strategies. And you also talk about a hundred twenty
28:02
Speaker 1: seven billion dollars of business that could be involving drones
28:06
Speaker 1: in some level by and I have to wonder that
28:09
Speaker 1: can't all be shipping us. What are sort of the
28:13
Speaker 1: majority of infrastructure monitoring so UM telecommunications and power distribution
28:20
Speaker 1: networks that need constant operations and maintenance have a heavy
28:24
Speaker 1: overhead with doing traditional rotor wing inspections UH. And there's
28:28
Speaker 1: a significant amount of danger associated with climbing up a
28:32
Speaker 1: cell tower to do an inspection. UH. And if you
28:34
Speaker 1: think about the thousands of assets that exists within just
28:38
Speaker 1: one small entity of a country, all of them need
28:41
Speaker 1: to be inspected on a regular basis for UM vegetation, encroachment,
28:46
Speaker 1: UM birds, nesting. These are all things that cause your
28:49
Speaker 1: broadband to go down on your system that you know,
28:53
Speaker 1: yeah right, and so as a consumer, you want that
28:56
Speaker 1: to be taken care of. So the companies have to
28:57
Speaker 1: do operations and maintenance. UH gain a tremendous boost in
29:01
Speaker 1: return on investment for using drone strategies. Chris, real quick.
29:04
Speaker 1: What companies stand up benefit the most as drones are
29:08
Speaker 1: adopted in a more accelerating manner. I think the power
29:12
Speaker 1: distribution oil and gas have the biggest benefit because you
29:17
Speaker 1: can use drones in a long haul environment where you're
29:19
Speaker 1: taking a look at distribution networks for areas like UH
29:25
Speaker 1: that have rolling blackouts that you could reduce blackouts. You're
29:28
Speaker 1: gonna get the biggest bank for the buck as far
29:29
Speaker 1: as customer satisfaction at that point. Chris Hewlett, thank you
29:32
Speaker 1: so much for joining us here at the National Postal
29:35
Speaker 1: Forum in Maryland. Chris Hewlett as manager of US Drone
29:38
Speaker 1: Powered Solutions at Price Waterhouse Cooper's in Washington, d C. Also,
29:42
Speaker 1: he was at twenty one year veteran of the Navy,
29:45
Speaker 1: flying around getting a lot of experience, so this does
29:47
Speaker 1: not mystify him unlike some of the rest of us.
30:00
Speaker 1: We are here in Baltimore at the National Postal Forum,
30:04
Speaker 1: which is a partner of the United States Postal Service,
30:06
Speaker 1: and we're talking about how to transform the concept of mail, physical,
30:12
Speaker 1: tangible on the ground mail in an era that's increasingly
30:15
Speaker 1: focused on your smartphone and on your tablet. And who
30:19
Speaker 1: better to do that for us to understand kind of
30:22
Speaker 1: this connection and this evolution is Prita Mara. She's vice
30:25
Speaker 1: president of Mail Entry and Payment Technology at USPS and
30:29
Speaker 1: she joins us here now in Baltimore at the conference.
30:32
Speaker 1: Thank you so much for joining us, Pritha. So, what
30:35
Speaker 1: is sort of the forefront right now the way that
30:38
Speaker 1: the United States Postal Services trying to make it more
30:40
Speaker 1: sort of amenable to the digital era. Where are the
30:43
Speaker 1: frontiers if you will, Well, imagine if you could carry
30:47
Speaker 1: your collection box with you everywhere you go, your mailbox.
30:52
Speaker 1: That's what we're doing. We're putting your mailbox into your phone,
30:56
Speaker 1: into your email, so that you can actually sign up.
31:00
Speaker 1: For those that haven't, I'm going to encourage you to
31:02
Speaker 1: sign up to our informed delivery platform. It's fantastic. So
31:06
Speaker 1: you see picture images of every mail piece that's coming
31:10
Speaker 1: to your mailbox. Boy, are we bringing that mail piece alive? Okay,
31:14
Speaker 1: hold on one second. So this means that you can
31:16
Speaker 1: see the actual uh items of mail that would be
31:19
Speaker 1: in your mailbox. Can you digitally open them? I mean,
31:22
Speaker 1: is it something where you basically are getting all of
31:24
Speaker 1: your mail digitally or you just can sort of take
31:26
Speaker 1: inventory of what you have and take stock and well,
31:29
Speaker 1: there's a lot going on with that. So you can
31:31
Speaker 1: see the picture of the of the mail piece, and
31:34
Speaker 1: then advertisers can and can attach a ride along coupon
31:39
Speaker 1: or an image they can attach U r L so
31:43
Speaker 1: that you know, when you see this image, you can
31:45
Speaker 1: click through and you could go into an entire entirely
31:48
Speaker 1: new experience. So it's essentially bringing mail alive. It's got
31:52
Speaker 1: a huge personality with every mail piece. You can click
31:56
Speaker 1: and you can be rendered into a whole new experience.
31:59
Speaker 1: So I'm trying to think because Paul Sweeney of Bloomberg
32:01
Speaker 1: Intelligence was on earlier and he was talking about how
32:04
Speaker 1: an increasing number of direct mailers are trying to use
32:09
Speaker 1: online information to then better target people with physical pieces
32:14
Speaker 1: of mail, and yet this seems to be a way
32:17
Speaker 1: that people could potentially bypass the physical sort of direct
32:21
Speaker 1: mailings and sort of attached coupons and other things. I'm
32:24
Speaker 1: just confused sort of how how to be the most
32:26
Speaker 1: effective for this absolutely not so, yeah, you got it
32:30
Speaker 1: all wrong. So let me tell you know what it is.
32:35
Speaker 1: This is what we're doing is we're creating multiple of impressions.
32:38
Speaker 1: So think about it. We've got a pretty we've got
32:41
Speaker 1: a boatload of social media clutter today, right, and so
32:45
Speaker 1: mail stands out. So what this does is you get
32:49
Speaker 1: this mail piece, you keep them, You keep the mail
32:52
Speaker 1: piece with you. You you then perhaps you've got an
32:55
Speaker 1: augmented reality going on on that mail piece. You can then,
32:59
Speaker 1: you know, shine your phone on it and you can
33:02
Speaker 1: be rendered another experience with informed delivery. You're getting an
33:07
Speaker 1: image of your mail piece, so you know, hey, there's
33:09
Speaker 1: something really important in my mailbox. I gotta go get it. Um.
33:13
Speaker 1: You can also then click into that image and think
33:16
Speaker 1: about the world of advertisers, and they can link that
33:19
Speaker 1: physical catalog with multiple experiences, So you're going to have
33:24
Speaker 1: multiple expressions, impressions, expressions, and multiple experiences. So how how
33:31
Speaker 1: soon is this being rolled out or is it already happening? Oh,
33:34
Speaker 1: it's it's all rolled out. And if you haven't signed up,
33:36
Speaker 1: you're missing the boat there. So I'm gonna tell you
33:40
Speaker 1: you are you're you're alright. You can sign up now.
33:44
Speaker 1: Advertisers can start using it, and we've got some huge
33:47
Speaker 1: success stories. Let me tell you about some open rates. Okay,
33:52
Speaker 1: email open rates are over seventy We're getting response rates
33:57
Speaker 1: in the high seven eight nine percent. Where's the biggest
34:00
Speaker 1: the adoption right now? It's retailers, It's it's it's no
34:04
Speaker 1: I mean like locations in the US, I mean, is
34:06
Speaker 1: it very specific geographically where people are sort of well
34:09
Speaker 1: when when we rolled it out, we started in the
34:11
Speaker 1: top metro area, so that of course, and so you know,
34:14
Speaker 1: and we are getting consumers of signing up at an
34:17
Speaker 1: alarming rate. We have over two million registered subscribers, so
34:22
Speaker 1: those eyeballs are increasing every day. You know, we talk
34:25
Speaker 1: a lot about how in the Amazon era, people are
34:28
Speaker 1: shipping a lot more, uh, in order just to sort
34:31
Speaker 1: of order things online. Bring it to their doorstep. But
34:34
Speaker 1: what about personal letters? Because I feel like emails kind
34:37
Speaker 1: of have overwhelmed that. Have you found that there is
34:40
Speaker 1: something specially you're saying that there is something different or
34:43
Speaker 1: you know, distinctive about getting a physical piece of mail. Uh,
34:46
Speaker 1: you know, have you seen sort of the drop in
34:48
Speaker 1: personal letters kind of stabilized and people going back to
34:51
Speaker 1: that at all? Or I think we are seeing that
34:54
Speaker 1: millennials believe it or not a loving mail, So people
34:58
Speaker 1: are going back because they really lies the power of
35:01
Speaker 1: that that mail piece. Because now that you've got all
35:04
Speaker 1: this different communications, mail is just a different experience. You
35:09
Speaker 1: go home, you access it when you want it. You're
35:12
Speaker 1: not reading it amongst seventy other emails or Facebook or
35:17
Speaker 1: this or that that you have to go through. You're
35:20
Speaker 1: actually interacting with it at your own pace. So you
35:23
Speaker 1: have a different relationship. You have a karma relationship. You
35:27
Speaker 1: have a more sustaining relationship with that mail piece than
35:30
Speaker 1: you do with all the social media. And I think
35:32
Speaker 1: people are realizing the power of that that relationship. Thank
35:37
Speaker 1: you so much for joining us. Sounds like an exciting
35:39
Speaker 1: time and for being here in Baltimore. Pretamera. She is
35:43
Speaker 1: the vice president of mail entry and payment technology for
35:46
Speaker 1: the United States Postal Service, talking about different payment systems
35:50
Speaker 1: that what she didn't get quite into that, but she
35:52
Speaker 1: was talking about the digitization of what your mailbox looks
35:56
Speaker 1: like and how you can check what's there, and the
35:59
Speaker 1: possible opportunity is for markets as well. Thank you so
36:01
Speaker 1: much for joining us, Thanks for listening to the Bloomberg
36:05
Speaker 1: P and L podcast. You can subscribe and listen to
36:07
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.
36:12
Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm
36:16
Speaker 1: on Twitter at Lisa abramoits one before the podcast. You
36:19
Speaker 1: can always catch us worldwide on Bloomberg Radio